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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, 2000
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, 2000 containing certain
unaudited financial information and a Management's Discussion and
Analysis of Financial Condition and Results.
[LOGO] KNIGHTSBRIDGE
TANKERS LIMITED
KNIGHTSBRIDGE TANKERS LIMITED
THIRD QUARTER 2000
REPORT TO SHAREHOLDERS
Knightsbridge Tankers Limited
Registered Office
Cedar House, 41 Cedar Avenue
Hamilton HM 12 Bermuda
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KNIGHTSBRIDGE
TANKERS LIMITED
Bermuda, October 26, 2000
To the Shareholders of Knightsbridge Tankers Limited:
Enclosed is our report for the third quarter of 2000. 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, 2000.
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 $59,096 per day for the period
July 1 through September 30, 2000. (The corresponding spot market
related rate for the period July 1 through September 30, 1999,
was determined to be $17,498).
Accordingly, on October 16, 2000, Shell International paid to the
Company's vessel owning subsidiaries charter hire in the
aggregate amount of $22,354,160 for the period July 1 through
September 30, 2000. (For the period July 1 through September 30,
1999, Shell International paid charter hire at the base rate in
the aggregate amount of $10,151,740).
On October 16, 2000, the Board of Directors of the Company
declared a distribution to shareholders of record as of October
26, 2000, payable on or about November 8, 2000, in the amount of
$1.17 per share for the period July 1 through September 30, 2000.
(For the period July 1 through September 30, 1999, the
distribution was $0.45 per share.)
The Company has agreed to provide information to shareholders
that are United States income tax payers by February 15, 2001, so
that they may make the appropriate tax reporting and elections
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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, 2000.
We are pleased to answer any inquiries that shareholders may
have. Our investor relations contacts are: Ola Lorentzon in Oslo,
Norway (Tel: 47 23 11 40 00, Fax: 47 23 11 40 44) and Kate
Blankenship in Hamilton, Bermuda (Tel: 441 295-6935, Fax: 441
295-3494). The NASDAQ National Market symbol for the Company's
Common Shares is "VLCCF".
Very truly yours,
Ola Lorentzon
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 paid "Supplemental
Hire" as described below.
Results of Operations - Nine Months Ended September 30, 2000
Revenues
The Company's revenues consisted of charter hire of $45.2 million
for the nine months ending September 30, 2000. (Revenues for the
corresponding period in 1999 were $30.1 million).
Operating Expenses
The Company's operating expenses consist of (i) fees due to the
Company's manager, ICB Shipping (Bermuda) Ltd (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 $100,896 was earned during the period. In
addition, the Company received interest income of $5,101 on the
principal balance of the receivable note from Shell
International. This note was repaid in full on January 18, 2000.
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 $6,687,604 for the first nine
months of 2000. This has decreased from $6,959,688 incurred in
the first nine months of 1999 due to the repayment of the final
installment of the Amortizing Loan as discussed below.
Liquidity and Capital Resources
Total shareholders' equity at September 30, 2000 was $273.0
million compared to $274.0 million at December 31, 1999. The
decrease was due to net income of $24.5 million for the period
January 1 through September 30, 2000 less distributions of $25.5
million to shareholders in the same period. These distributions
are for earnings in the fourth quarter of 1999 and the first half
of 2000.
The Company's long-term debt as of September 30, 2000, consists
of $125.4 million borrowed under its credit facility. At December
31, 1999, the Company's long-term debt included an amount of $1.7
million that represented the "Amortizing Loan" which was payable
in eight equal quarterly installments ending on January 15, 2000.
Supplemental Hire payable by Shell International was 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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KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in U.S. Dollars)
September 30, 2000 December 31, 1999
ASSETS
Current assets
Cash 260,367 70,695
Current installments of notes
receivable - 1,681,538
Charter hire receivable 22,354,160 10,175,142
Prepaid expenses 41,710 14,525
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Total current assets 22,656,237 11,941,900
Vessels under capital lease, less
accumulated depreciation of
$63,236,558 and $50,041,913 376,584,987 389,779,632
Capitalized financing fees
and expenses,less accumulated
amortization of $1,335,493
and $1,056,835 1,265,312 1,543,969
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TOTAL ASSETS 400,506,536 403,265,501
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LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities
Accrued expenses and other current
liabilities 2,129,726 2,206,021
Current installments of credit facility - 1,681,538
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Total current liabilities 2,129,726 3,887,559
Credit facility 125,397,399 125,397,399
Shareholders equity
Common shares, par value $0.01 per share:
Authorized and outstanding 17,100,000 171,000 171,000
Contributed capital surplus account 272,808,411 273,809,543
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Total shareholders equity 272,979,411 273,980,543
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 400,506,536 403,265,501
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KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in U.S. Dollars)
January 1, 2000 January 1, 1999
to September 30, 2000 to September 30, 1999
Charter hire revenue 45,219,275 30,124,185
Operating expenses:
Depreciation of vessels under
capital leases 13,194,645 13,194,645
Management fee 562,500 562,500
Administration expenses 44,458 68,314
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Net operating income 31,417,672 16,298,726
Interest income 105,997 341,304
Interest expense (6,687,604) (6,959,688)
Other financial costs (358,166) (316,158)
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Net income 24,477,900 9,364,184
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KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in U.S. Dollars)
January 1, 2000 January 1, 1999
to September 30, 2000 to September 30, 1999
Cash flows from operating activities
Net income 24,477,900 9,364,184
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 278,657 278,658
Changes in operating assets
and liabilities:
Receivables (10,524,665) 5,079,854
Accrued expenses and other
current liabilities (76,295) (70,240)
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Net cash provided by operating
activities 27,350,242 27,847,101
Cash flows from financing activities
Repayments of loan (1,681,538) (5,044,614)
Distribution to shareholders (25,479,032) (23,085,000)
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Net cash used in financing
activities (27,160,570) (28,129,614)
Net increase (decrease) in
cash and cash equivalents 189,672 (282,513)
Cash and cash equivalents at
beginning of period 70,695 315,223
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Cash and cash equivalents at
end of period 260,367 32,710
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KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
(in U.S. Dollars)
Contributed
Share capital surplus Retained
capital account earnings Total
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Balance at
December 31, 1998 171,000 292,017,066 - 292,188,066
Net income - - 12,572,476 12,572,476
Distribution
to shareholders - (18,207,523) (12,572,476) (30,779,999)
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Balance at
December 31, 1999 171,000 273,809,543 - 273,980,543
Net income - - 24,477,900 24,477,900
Distribution
to shareholders - (1,001,132) (24,477,900) (25,479,032)
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Balance at
September 30, 2000 171,100 272,808,411 - 272,979,411
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02089009.AC2
