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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 AUGUST, 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 second quarterly
report of Knightsbridge Tankers Limited (the "Company"), dated
July 28, 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 June 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, July 28, 1997
TO THE SHAREHOLDERS OF KNIGHTSBRIDGE TANKERS LIMITED:
This is our second 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 June 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 July 2, 1997 the spot market related rate,
after inclusion of the component for operating expenses,
totaled $27,972 per day for the period April 1 through
June 30, 1997. (The corresponding spot market related rate for
the previous period, from delivery of the VLCC's on February
27 through March 31, 1997, was determined to be $28,750.)
Accordingly, on July 15, 1997, Shell International paid to the
Company's vessel owning subsidiaries charter hire at the Base
Rate in the aggregate amount of $10.041.390 for the period
April 1 through June 30, 1997. On July 15, 1997, the Board of
Directors of the Company declared a distribution to
shareholders of record as of July 25, 1997, payable on or
about August 11, 1997, in the amount of $0.45 per share for
the period April 1 through June 30, 1997. (For the previous
period, from the closing of the public offering on February 12
through March 31, 1997, the board declared a distribution of
$0.17 per share.) 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 $13.6 million for the period commencing February
27, 1997 and ending June 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)
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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
other expenses or contingent liabilities for which reserves
will be required.
LIQUIDITY AND CAPITAL RESOURCES
Total shareholders equity of the Company at June 30, 1997 was
approximately $319 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
$2.7 million, and (ii) net income of the Company for the
period from February 12 through June 30, 1997 in the amount of
$4,758,538 less (iii) a distribution to the shareholder for
the first quarter in the amount of $2,907,000.
The Company's long-term debt as of June 30 consists of the
principal amounts borrowed under its credit facility in the
aggregate amount of $143.9 million. Of this amount, $18.5
million represents the Amortizing Loans and is payable in 11
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
Loans. 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 EXPENSES
Interest income of $698,242 was earned during the period. In
addition the Company received interest income of $424,207 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 $3,596,000 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
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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
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- APRIL 1, 1997-
JUNE 30,1997 JUNE 30,1997
Charter hire revenue 13,617,260 10,041,390
OPERATING EXPENSES:
Depreciation of vessels under
capital leases -6,097,428 -4,435,878
Management fee -255,308 -187,500
Administration expenses -32,192 -23,677
__________ __________
OPERATING INCOME 7,232,332 5,394,335
Interest income 1,122,449 308,530
Interest expense and other financial costs -3,596,243 -2,601,952
__________ __________
NET INCOME 4,758,538 3,100,913
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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SEPTEMBER 18, 1996- APRIL 1, 1997
OPERATING ACTIVITIES JUNE 30, 1997 JUNE 30, 1997
Net income 4,758,538 3,100,913
Depreciation 6,097,428 4,435,878
Amortization of capitalised fees
and expenses 127,981 92,891
Changes in operating assets and liabilities:
Receivables -17,080,790 -6,629,683
Accrued expenses and other
current liabilities 9,199,261 -602,053
___________ __________
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,102,418 397,946
INVESTING ACTIVITIES
Notes receivable from Shell International -18,496,916 -
Purchase of vessels under capital lease -439,821,548
____________ _____
NET CASH USED IN INVESTING ACTIVITIES -458,318,464 -
FINANCING ACTIVITIES
Loan proceeds 141,293,511 -
Net proceeds from share offerings 317,224,950 -
Redemption of original share capital -12,000 -
Distribution to shareholders -2,907,000 -2,907,000
___________ __________
NET CASH PROVIDED BY FINANCING ACTIVITIES 455,599,461 -2,907,000
Net increase/decrease in cash and
cash equivalents 383,415 2,509,054
Cash and cash equivalents at beginning
of period 12,000 2,904,469
CASH AND CASH EQUIVALENT AT END OF PERIOD 395,415 395,415
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CONSOLIDATED BALANCE SHEET
ASSETS JUNE 30, 1997 SEPT. 18, 1996
(UNAUDITED)
CURRENT ASSETS
Cash 395,415 12,000
Current installments of note receivable 6,726,152 -
Charter hire receivable 10,295,638 -
Prepaid expenses 59,000 -
__________ ______
TOTAL CURRENT ASSETS 17,476,205 12,000
Notes receivable 11,770,764 -
Vessels under capital lease 433,724,116 -
Capitalized financing fees and expenses 2,472,828 -
___________ ______
TOTAL ASSETS 465,443,913 12,000
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LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Accrued expenses and other current
liabilities 2,473,110 -
Current installments of credit facility 6,726,151 -
_________ ________
TOTAL CURRENT LIABILITIES 9,199,261 -
Credit facility 137,168,164 -
SHAREHOLDER'S EQUITY
Common stock, par value 0.01 per share:
Authorized and outstanding 17,100,000 171,000 12,000
Paid in additional capital 317,053,950 -
Retained earnings 4,758,538 -
Distribution to shareholders -2,907,000 -
___________ ________
TOTAL SHAREHOLDER'S EQUITY 319,076,488 12,000
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TOTAL LIABILITIES AND
SHAREHOLDER'S EQUITY 465,443,913 12,000
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CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY
JUNE 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 - - 4,758,538 - 4,758,538
Distribution
to the
Shareholders - - - -2,907,000 -2,907,000
______________________________________________________________________________
Balance at
June 30, 1997 171,000 317,053,950 4,758,538 -2,907,000 319,076,488
(Unaudited)
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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: August 7, 1997 By: /s/ Ola Lorentzon
___________________________
Ola Lorentzon
Director, Deputy Chairman
and Treasurer
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01655001.FO4
