Frontline’s controlling shareholder John Fredriksen has now been repaid all of the money he loaned the company to finance its $2.35bn purchase of 24 VLCCs from Euronav.
In its third-quarter report, the US and Oslo-listed shipowner said it had settled the outstanding amounts from a shareholder loan and a revolving credit facility.
The company also announced the completion of a $521m sale-and-leaseback transaction involving 10 suezmaxes with CMB Financial Leasing in China.
The refinancing should generate net cash proceeds of $101m in the fourth quarter.
This was partly used to repay the remaining $75m drawn under the $275m revolving credit facility with an affiliate of Fredriksen’s private Hemen Holding.
The revolver remains in place and is now undrawn.
The shareholder loan was worth $539.9m over five years, again with Hemen Holding.
Interest was at the secured overnight financing rate plus an undisclosed margin equal to Frontline’s $1.4bn bank financing put in place for the Euronav deal in 2023.
Frontline said repayments to Fredriksen totalled $470m in the second, third and fourth quarters of 2024.
The company had earlier said it had repaid an aggregate $395m under both the shareholder loan and the revolver in the second and third periods.
Capital structure optimised
Chief financial officer Inger Klemp added: “In 2024 we have optimised the capital structure of the company by refinancing debt of 36 vessels, which has extended maturities and improved margins.”
She added that eight older tankers have been sold during the year.
“We continue to focus on maintaining our competitive cost structure, breakeven levels and solid balance sheet to ensure that we are well positioned to generate significant cash flow and create value for our shareholders,” Klemp said.
In June, Frontline drew down $306.5m under a $606.7m loan with China Exim Bank and DNB that refinanced eight suezmaxes and eight LR2 tankers in May.
The rest was drawn down in August.
The refinancing generated net cash proceeds of about $275m.
