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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 May, 1999
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 quarterly report of
Knightsbridge Tankers Limited (the "Company") for the period
ended March 31, 1999.
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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KNIGHTSBRIDGE TANKERS LIMITED
Stockholm, May 6, 1999
To the Shareholders of Knightsbridge Tankers Limited (the
"Company"):
Enclosed is our report for the first quarter of 1999. The report
contains selected unaudited financial information accompanied by
a Management's Discussion and Analysis of Financial Condition and
Results of Operations for the period ended March 31, 1999.
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,
the spot market related rate, after inclusion of the component
for operating expenses, totaled $31,003 per day for the period
January 1 through March 31, 1999. (The corresponding spot market
related rate for the period January 1 through March 31, 1998, was
determined to be $29,645.)
Accordingly, on April 15, 1998, Shell International paid to the
Company's vessel owning subsidiaries charter hire at the base
rate in the aggregate amount of $9,931,050 for the period
January 1 through March 31, 1999. (Same amount as in first
quarter last year.)
On April 15, 1999, the Board of Directors of the Company declared
a distribution to shareholders of record as of April 26, 1999,
payable on or about May 11, 1999, in the amount of $0.45 per
share for the period January 1 through March 31, 1999. (Same
distribution as in first quarter last year.)
The Company has agreed to provide information to shareholders
that are United States income tax payers by February 15, 2000, 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."
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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 entire year
ending December 31, 1999.
We are pleased to answer any inquiries that shareholders may
have. Our investor relations contact is: Karl Molander, the
Company's Chief Financial Officer, 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,
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 - THREE MONTHS ENDED MARCH 31, 1999
Revenues
The Company's revenues consist of charter hire of $9.9 million
for the period commencing January 1, 1999 and ending March 31,
1999. (Same charter hire as in first quarter last year.)
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) administration
expenses consisting of 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.
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Interest income and expense
Interest income of $28,208 was earned during the period. In
addition the Company received interest income of $112,264 on the
principal balance of the receivable note from Shell
International.
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 $2,321,662 for the period.
Liquidity and Capital Resources
Total shareholders equity of the Company at March 31, 1999, was
$287.5 million compared to $292.2 million at December 31, 1998.
The decrease was due to net income for the period January 1
through March 31, 1999, in the amount of $3,035,975 less
distribution to shareholders for the fourth quarter of 1998 in
the amount of $7,695,000.
The Company's long-term debt as of March 31, 1999, consists of
the principal amounts borrowed under its credit facility in the
aggregate amount of $132.1 million. Of this amount, $6.7 million
represents the "Amortizing Loan" which is payable in eight 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.
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
International, are not expected to be significantly affected by
movements in currency exchange rates.
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CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in U.S. Dollars)
ASSETS
CURRENT ASSETS MAR 31, 1999 DEC 31, 1998
------------ ------------
Cash 303,890 315,223
Current installments
of notes receivable 6,726,151 6,726,152
Charter hire receivable 10,022,302 10,268,805
Prepaid expenses 37,500 14,000
------------- ----------
Total current assets 17,089,843 17,324,180
Notes receivable - 1,681,538
Vessels under capital
lease, less accumulated
depreciation of
$36,847,268 and
$19,254,407 402,974,277 407,372,491
Capitalized financing
fees and expenses,
less accumulated
amortization of $778,177
and $406,634 1,822,627 1,915,513
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TOTAL ASSETS 421,886,747 428,293,722
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LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities
Accrued expenses and other
current liabilities 2,234,155 2,300,568
Current installments of
credit facility 6,726,151 6,726,152
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Total current liabilities 8,960,306 9,026,720
Credit facility 125,397,399 127,078,936
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Shareholders equity
Common shares, par value
$0.01 per share:
Authorized and
outstanding 17,100,000 171,000 171,000
Contributed capital
surplus account 287,358,042 292,017,066
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Total shareholders equity 287,529,042 292,188,066
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 421,886,747 428,293,722
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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in U.S. Dollars)
JAN 1, 1999 JAN 1, 1998
-MAR 31, 1999 -MAR 31, 1998
-------------- -------------
Charter hire revenue 9,931,050 9,931,050
Operating expenses:
Depreciation of
vessels under capital
leases -4,398,215 -4,398,215
Management fee -187,500 -187,500
Administration expenses -22,784 -22,758
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Operating income 5,322,551 5,322,577
Interest income 140,472 270,461
Interest expense -2,321,662 -2,427,614
Other financial costs -105,386 -105,386
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Net income 3,035,975 3,060,038
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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in U.S. Dollars)
CASH FLOWS FROM OPERATING JAN 1, 1999 JAN 1, 1998
ACTIVITIES -MAR 31, 1999 -MAR 31, 1998
------------- -------------
Net income 3,035,975 3,060,038
Items to reconcile net
income to net cash
provided by operating
activities:
Depreciation 4,398,215 4,398,215
Amortization of capitalized
fees and expenses 92,886 92,886
Changes in operating
assets and liabilities:
Receivables 1,904,542 6,950,086
Accrued expenses and
other current liabilities -66,413 -64,118
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Net cash provided by
operating activities 9,365,205 14,437,107
CASH FLOWS FROM FINANCING
ACTIVITIES
Repayments of loan -1,681,538 -1,681,538
Distribution to shareholders -7,695,000 -12,825,000
---------- ----------
Net cash used in financing
activities -9,376,538 -14,506,538
Net increase/decrease in
cash and cash equivalents -11,333 -69,431
Cash and cash equivalents
at beginning of period 315,223 217,374
--------- ----------
Cash and cash equivalents
at end of period 303,890 147,943
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CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY (UNAUDITED)
(in U.S. Dollars)
CONTRIBUTED
ADDITIONAL CAPITAL
SHARE PAID-IN SURPLUS RETAINED
CAPITAL CAPITAL ACCOUNT EARNINGS TOTAL
______________________________________________________________________________
Balance at
Dec 31, 1997 171,000 314,987,247 - - 315,158,247
Reallocation
Share Premium - -314,987,247 314,987,247 - -
Net income - - - 17,385,820 17,385,820
Distribution
to shareholders - - -22,970,180 -17,385,820 -40,356,000
______________________________________________________________________________
Balance at
Dec 31, 1998 171,000 - 292,017,067 - 292,188,067
Net income - - - 3,035,975 3,035,975
Distribution
to shareholders - - -4,659,025 -3,035,975 -7,695,000
______________________________________________________________________________
Balance at
Mar 31, 1999 171,000 - 287,358,042 - 287,529,042
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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: May 13, 1999 By: /s/ Ola Lorentzon
___________________________
Ola Lorentzon
Director, Deputy Chairman
and Treasurer
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01655002.AG6
