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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 September, 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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INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Set forth herein is a copy of the report to shareholders
for the quarter ended September 30, 1999 containing certain
unaudited financial information and a Management's Discussion and
Analysis of Financial Condition and Results.
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KNIGHTSBRIDGE TANKERS LIMITED
Stockholm, October 25, 1999
TO THE SHAREHOLDERS OF KNIGHTSBRIDGE TANKERS LIMITED:
Enclosed is our third report for year 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 September 30, 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 $ 17,498 per day for the period
July 1 through September 30, 1999. (The corresponding spot market
related rate for the period July 1 through September 30, 1998,
was determined to be $35,585.)
Accordingly, on October 15, 1998, Shell International paid to the
Company's vessel owning subsidiaries charter hire at the base
rate in the aggregate amount of $ 10,151,740 for the period July
1 through September 30, 1999. (For the period July 1 through
September 30, 1998, Shell International paid charter hire at the
base rate in the aggregate amount of $ 10,151,740 and additional
hire in the aggregate amount of $ 1,387,360.)
On October 15, 1999, the Board of Directors of the Company
declared a distribution to share-holders of record as of October
26, 1999, payable on or about November 10, 1999, in the amount of
$ 0.45 per share for the period July 1 through September 30,
1999. (For the period July 1 through September 30, 1998, the
distribution was $ 0.53 per share.)
The Company has agreed to provide information to shareholders
that are United States income tax payers by February 15, 2000, so
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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 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
Knightsbridge Tankers Limited Knightsbridge Tankers Limited
Investor Relations Registered Office
P. O. Box 7007, S-103 86, Cedar House, 41 Cedar Avenue
Stockholm, Sweden Hamilton HM 12, Bermuda
Telephone: Int + 46-8-613 30 30
Telefax: Int + 46-8-613 99 09
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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 - 9 MONTHS 1999
REVENUES
The Company's revenues consist of charter hire of $ 30.1 million
for the period commencing January 1, 1999 and ending September
30, 1999. (The charter hire for the same period last year was
34.9.)
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 $ 83,459 was earned during the period. In
addition the Company received interest income of $ 257,845 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 $ 6,959,688 for the period.
LIQUIDITY AND CAPITAL RESOURCES
Total shareholders equity of the Company at September 30, 1999,
was $ 278.5 million compared to $ 292.2 million at December 31,
1998. The decrease was due to net income for the period January 1
through September 30, 1999, in the amount of $ 9.4 million less
distribution to shareholders for the fourth quarter of 1998 and
for the first half 1999 in the aggregate amount of $ 23.1
million.
The Company's long-term debt as of September 30, 1999, consists
of the principal amounts borrowed under its credit facility in
the aggregate amount of $ 128.8 million. Of this amount,
$ 3.4 million represents the "Amortizing Loan" which is payable
in two 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 SEP 30, 1999 DEC 31, 1998
Cash 32,710 315,223
Current installments of notes receivable 3,363,077 6,726,152
Charter hire receivable 10,198,566 10,268,805
Prepaid expenses 49,000 14,000
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TOTAL CURRENT ASSETS 13,643,353 17,324,180
Notes receivable - 1,681,538
Vessels under capital lease, less
accumulated depreciation of
$45,643,698 and $32,449,053 394,177,846 407,372,491
Capitalized financing fees and
expenses, less accumulated
amortization of $963,949
and $685,291 1,636,855 1,915,513
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TOTAL ASSETS 409,458,054 428,293,722
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LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES
Accrued expenses and other current
liabilities 2,230,328 2,300,568
Current installments of credit facility 3,363,076 6,726,152
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TOTAL CURRENT LIABILITIES 5,593,404 9,026,720
Credit facility 125,397,399 127,078,936
SHAREHOLDERS EQUITY
Common shares, par value $0.01
per share:
Authorized and outstanding 17,100,000 171,000 171,000
Contributed capital surplus account 278,296,251 292,017,066
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TOTAL SHAREHOLDERS EQUITY 278,467,251 292,188,066
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 409,458,054 428,293,722
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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in U.S. Dollars)
JAN 1, 1999 JAN 1, 1998
-SEP 30, 1999 -SEP 30, 1998
CHARTER HIRE REVENUE 30,124,185 34,887,645
OPERATING EXPENSES:
Depreciation of vessels under
capital leases -13,194,645 -13,194,645
Management fee -562,500 -562,500
Administration expenses -68,314 -68,320
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OPERATING INCOME 16,298,726 21,062,180
Interest income 341,304 709,718
Interest expense -6,959,688 -7,306,532
Other financial costs -316,158 -316,158
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NET INCOME 9,364,184 14,149,208
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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in U.S. Dollars)
JAN 1, 1999 JAN 1, 1998
CASH FLOWS FROM OPERATING ACTIVITIES -SEP 30, 1999 -SEP 30, 1998
Net Income 9,364,184 14,149,208
ITEMS TO RECONCILE NET INCOME TO NET CASH
provided by operating activities:
Depreciation 13,194,645 13,194,645
Amortization of capitalized fees
and expenses 278,658 278,658
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Receivables 5,079,854 8,779,634
Accrued expenses and other current
liabilities -70,240 -32,587
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NET CASH PROVIDED BY OPERATING ACTIVITIES 27,847,101 36,369,558
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of loan -5,044,614 -5,044,614
Distribution to shareholders -23,085,000 -31,293,000
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Net cash used in financing activities -28,129,614 -36,337,614
Net increase/decrease in cash and
cash equivalents -282,513 31,944
Cash and cash equivalents at
beginning of period 315,223 217,374
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Cash and cash equivalents at end of period 32,710 249,318
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CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY (UNAUDITED)
(in U.S. Dollars)
ADDITIONAL CONTRIBUTED
SHARE PAID-IN CAPITAL RETAINED
CAPITAL SURPLUS 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 - - -9,364,184 9,364,184
Distribution
to shareholders - - -13,720,816 -9,364,184 -23,085,000
BALANCE AT
Sep 30, 1999 171,000 - 278,296,251 - 278,467,251
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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 2, 1999 By: /s/ Ola Loventzon
___________________
Ola Lorentzon
Vice Chairman and
Chief Executive Officer
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