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Commission File No. 0-29106
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of November, 1997
KNIGHTSBRIDGE TANKERS LIMITED
(Translation of registrant's name into English)
Cedar House
41 Cedar Avenue
Hamilton HM 12
Bermuda
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark whether the registrant by furnishing
the information contained in this Form is also thereby furnishing
the information to the commission pursuant to Rule 12g3-2(b)
under the Securities Exchange Act of 1934.
Yes No X
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Item 1. INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached hereto is a copy of the third quarterly report
of Knightsbridge Tankers Limited (the "Company"), dated
October 27, 1997. Such report contains certain unaudited
financial information accompanied by a Management's Discussion
and Analysis of Financial Condition and Results of Operations for
the period ended September 30, 1997.
Item 2. ADDITIONAL INFORMATION
Royal Dutch Petroleum Company and The Shell Transport
and Trading Company, Public Limited Company file annual reports
on Form 20-F (File Nos. 1-3788 and 1-4039) and periodic reports
on Form 6-K with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934, as amended. Such annual
reports contain the financial statements of the Royal Dutch/Shell
Group of Companies.
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Stockholm, October 27, 1997
To the Shareholders of Knightsbridge Tankers Limited:
This is our third quarterly report since our initial public
offering, which closed on February 12, 1997. Enclosed is selected
unaudited financial information accompanied by a Management's
Discussion and Analysis of Financial Condition and Results of
Operations for the period ended September 30, 1997.
On February 27, 1997, the Company's ship owning subsidiaries
purchased five very large crude carriers ("VLCC's") from their
previous owners and delivered them to Shell International
Petroleum Company Limited ("Shell International"), as charterer,
under separate "hell and high water" bareboat charters. Under
those charters, the Company's ship owning subsidiaries receive
the greater of a Base Rate of hire in the amount of $22,069 per
day per VLCC or a spot market related rate. After inclusion of a
component for operating expenses of $10,500 per day, the spot
market related rate must exceed $32,569 per day for the Company's
subsidiaries to receive any additional charter hire over the Base
Rate.
Based upon the determination by the London Tanker Brokers Panel
received October 2, 1997, the spot market related rate, after
inclusion of the component for operating expenses, totaled
$39,374 per day for the period July 1 through September 30, 1997.
(The corresponding spot market related rate for the previous
period, from April 1 through June 30, 1997, was determined to be
$27,972.)
Accordingly, on October 15, 1997, Shell International paid to the
Company's vessel owning subsidiaries charter hire at the Base
Rate in the aggregate amount of $10,151,740 and additional hire
in the aggregate amount of $3,130,300 for the period July 1
through September 30, 1997.
On October 15, 1997, the Board of Directors of the Company
declared a distribution to shareholders of record as of
October 27, 1997, payable on or about November 13, 1997, in the
amount of $0.64 per share for the period July 1 through September
30, 1997. (For the previous periods, February 12 through March
31, 1997 and April 1 through June 30, 1997, the board declared a
distribution of $0.17 and of $0.45 per share, respectively.) The
interim distribution to shareholders, which consists of dividend
and return of capital, will be allocated among retained earnings
and paid in additional capital by the end of the fiscal year.
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The Company has agreed to provide information to shareholders
that are United States income tax payers by February 15, 1998, so
that they may make the appropriate tax reporting and elections
with the United States tax authorities with respect to the
Company's status as a "Passive Foreign Investment Company". Under
present United States tax rules, the amount of income reported by
a shareholder is based on the Company's income on an annual
basis.
Therefore, the Company will provide information enabling
shareholders to determine the tax consequences of their
investment in the Company, including the treatment of
distributions received from the Company, for the year ending
December 31, 1997, and not for any shorter period.
We are pleased to answer any inquiries that shareholders may
have. Our investor relations contact is: Karl Molander,
Tel: Int + 46-8-613 30 30, fax: Int + 46-8-613 99 09. The Nasdaq
National Market symbol for the Company's Common Shares is
"VLCCF".
Very truly yours,
/s/ Ola Lorentzon
_______________________
Ola Lorentzon
Vice Chairman and
Chief Executive Officer
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Management's Discussion and Analysis of
Financial Condition and Results of Operations
Knightsbridge Tankers Limited (the "Company") was incorporated in
Bermuda on September 18, 1996. In February, 1997, the Company
offered and sold to the public 16,100,000 common shares at an
initial offering price of $20 per share. Simultaneously, the
Company sold 1,000,000 common shares at a price of $20 per share
to ICB International Limited, an indirect wholly-owned subsidiary
of ICB Shipping Aktiebolag (publ) ("ICB"), a Swedish publicly
traded ship owning and operating company. The Company used the
proceeds of these offerings, together with advances under a
$145.6 million credit facility from an international syndicate of
lenders, primarily to fund the purchase by the Company's
subsidiaries of five recently constructed very large crude
carrier oil tankers ("VLCC's"). Upon their purchase from their
previous owners, the VLCC's were delivered on February 27, 1997,
to Shell International Petroleum Company Limited ("Shell
International"), a company of the Royal Dutch/Shell Group of
Companies, under separate "Hell and high water" bareboat
charters. The term of these charters is a minimum of seven years,
with an option for Shell International to extend the period for
each VLCC for an additional seven-year term, to a maximum of 14
years per VLCC. Under the charters, Shell pays the greater of a
Base Rate of hire of $22,069 per day or a spot market related
rate, determined quarterly by the London Tankers Brokers Panel.
After taking into account a component for operating costs of
$10,500 per day, Shell International pays the higher rate if the
award exceeds $32,569 per day. In addition, for the first three
years of the charters, Shell International pays "Supplemental
Hire" as described below.
Results of Operations - First Half 1997
Revenues
The Company's revenues consist of charter hire of approximately
$26.9 million for the period commencing February 27, 1997 and
ending September 30, 1997.
Operating Expenses
The Company's operating expenses consist of (i) fees due to the
Company's manager, ICB Shipping (Bermuda) Ltd, an indirect
wholly-owned subsidiary of ICB (the "Manager"), (ii)
depreciation of the vessels and (iii) payments of insurance
premiums for directors' and officers' liability insurance. There
can be no assurance, however, that the Company will not have
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other expenses or contingent liabilities for which reserves will
be required.
Liquidity and Capital Resources
Total shareholders equity of the Company at September 30, 1997
was approximately $318 million compared to $12,000 at September
18, 1996. The increase was due to (i) proceeds from the issuance
of the Company's common shares in its offerings to the public and
to ICB International Limited after deduction of underwriting
discounts and commission of $18.9 million and payment of a
commencement fee to the Manager in the amount of $3.15 million,
and (ii) net income of the Company for the period from February
12 through Septembere 30, 1997 in the amount of $11,074,078 less
(iii) distributions to the shareholder for the first two quarters
in the aggregate amount of $10,602,000.
The Company's long-term debt as of September 30 consists of the
principal amounts borrowed under its credit facility in the
aggregate amount of $142.2 million. Of this amount, $16.8 million
represents the Amortizing Loan and is payable in 10 equal
quarterly installments ending on January 15, 2000. Supplemental
Hire payable by Shell International is equal to amounts payable
by the Company on account of the Amortizing Loan. The balance of
the credit facility matures seven years and six months from
February 27, 1997. Interest on this balance is payable quarterly
in arrears.
Interest income and expense
Interest income of $729,376 was earned during the period. In
addition the Company received interest income of $704,566 on the
principal balance of the receivable note from Shell Inter-
national.
The Company's borrowings under its credit facility have been
effectively converted to a fixed rate pursuant to a swap
arrangement to which the Company is a party. Interest on the
credit facility has effectively been fixed at 7.05%, which
resulted in interest expenses of $6,227,985 for the period.
Currency Exchange Rates
The international shipping industry's functional currency is the
United States Dollar and virtually all of the Company's operating
revenues and expenses are expected to be denominated in United
States Dollar.
Accordingly, the company's operating results, following
expiration or termination of the charters with Shell
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International, are not expected to be significantly affected by
movements in currency exchange rates.
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CONSOLIDATED INCOME STATEMENT INFORMATION (UNAUDITED)
September 18, 1996- July 1, 1997-
September 30, 1997 September 30, 1997
Charter hire revenue 26,899,301 13,282,041
Operating expenses:
Depreciation of vessels under
capital leases -10,533,311 -4,435,883
Management fee -442,808 -187,500
Administration expenses -55,061 -22,869
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Operating income 15,868,121 8,635,789
Interest income 1,433,942 311,493
Interest expense and other financial costs -6,227,985 -2,631,742
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Net income 11,074,078 6,315,540
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CONSOLIDATED BALANCE SHEET
ASSETS September 30, 1997 September 18, 1996
(Unaudited)
Current assets
Cash 398,817 12,000
Current installments of note receivable 6,726,150 -
Charter hire receivable 13,516,173 -
Prepaid expenses 36,500 -
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Total current assets 20,677,640 12,000
Notes receivable 10,089,227 -
Vessels under capital lease 429,288,234 -
Capitalized financing fees and expenses 2,379,942 -
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TOTAL ASSETS 462,435,043 12,000
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LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Accrued expenses and other current
liabilities 2,525,238 -
Current installments of credit facility 6,726,151 -
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Total current liabilities 9,251,389 -
Credit facility 135,486,626 -
Shareholders' equity
Common stock, par value 0.01 per share:
Authorised and outstanding 17,100,000 171,000 12,000
Paid in additional capital 317,053,950 -
Retained earnings 11,074,078 -
Distribution to shareholders -10,602,000 -
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Total shareholder's equity 317,697,028 12,000
TOTAL LIABILITIES AND
SHAREHOLDER'S EQUITY 462,435,043 12,000
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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
September 18, 1996- July 1, 1997-
Operating activities September 30, 1997 September 30, 1997
Net income 11,074,078 6,315,540
Depreciation 10,533,311 4,435,883
Amortisation of capitalised fees
and expenses 220,864 92,884
Changes in operating assets and liabilities:
Receivables -20,278,823 -3,198,033
Accrued expenses and other
current liabilities 9,251,389 -52,128
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Net cash provided by operating activities 10,800,819 7,698,402
Investing activities
Notes receivable from Shell International -16,815,377 -
Purchase of vessels under capital lease -439,821,548
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Net cash used in investing activities -456,636,925 -
Financing activities
Loan proceeds 139,611,973 -
Net proceeds from share offerings 317,224,950 -
Redemption of original share capital -12,000 -
Distribution to shareholders -10,602,000 -7,695,000
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Net cash provided by financing activities 446,222,923 -7,695,000
Net increase/decrease in cash and
cash equivalents 386,817 3,402
Cash and cash equivalents at beginning
of period 12,000 395,415
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Cash and cash equivalents at end of period 398,817 398,817
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CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
SEPTEMBER 30, 1997 (UNAUDITED)
Additional Distribution
Share paid in Retained to
Capital Capital earnings Shareholders Total
Original
issue
Sept 18, 1997 12,000 - - - 12,000
Net proceeds
from share
issuance 171,000 317,053,950 - - 317,224,950
Original
share
redemption -12,000 - - - -12,000
Net income - - 11,074,078 - 11,074,078
Distribution
to the
Shareholders - - - -10,602,000 -10,602,000
______________________________________________________________________________
Balance at
September 30,
1997 171,000 317,053,950 11,074,078 -10,602,000 317,697,028
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SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned,
thereunto duly authorized.
KNIGHTSBRIDGE TANKERS LIMITED
(registrant)
Dated: November 4, 1997 By: /s/ Ola Lorentzon
______________________________
Ola Lorentzon
Director, Deputy Chairman
and Treasurer
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01655001.FT7
