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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of AUGUST , 2000
Knightsbridge Tankers Limited
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(Translation of registrant's name into English)
Cedar House, 41 Cedar Avenue, Hamilton HM 12, Bermuda
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(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
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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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If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 12g3-2(b): 82-_____.
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Item 1. INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached as Exhibit 1 is a copy of the report to shareholders for
the six months ended June 30, 2000 containing certain unaudited
financial information and a Management's Discussion and Analysis
of Financial Condition and Results
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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Bermuda, July 31, 2000
To the Shareholders of Knightsbridge Tankers Limited:
Enclosed is our report for the second 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 June 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 $38,684 per day for the period
April 1 through June 30, 2000. (The corresponding spot market
related rate for the period April 1 through June 30, 1999, was
determined to be $18,330).
Accordingly, on July 17, 2000, Shell International paid to the
Company's vessel owning subsidiaries charter hire in the
aggregate amount of $12,823,720 for the period April 1 through
June 30, 2000. (For the period April 1 through June 30, 1999,
Shell International paid charter hire at the base rate in the
aggregate amount of $10,041,395).
On July 14, 2000, the Board of Directors of the Company declared
a distribution to shareholders of record as of July 24, 2000,
payable on or about August 7, 2000, in the amount of $0.61 per
share for the period April 1 through June 30, 2000. (For the
period April 1 through June 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
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
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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 - Six Months Ended June 30, 2000
Revenues
The Company's revenues consisted of charter hire of $22.9 million
for the six months ending June 30, 2000. (Revenues for the
corresponding period in 1999 were $20.0 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.
Interest income and expense
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Interest income of $58,788 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 $4,436,810 for the first six
months of 2000. This has decreased from $4,641,758 incurred in
the first half of 1999 due to the repayment of the final
installment of the Amortizing Loan as discussed below.
Liquidity and Capital Resources
Total shareholders' equity of the Company at June 30, 2000 was
$268.0 million compared to $274.0 million at December 31, 1999.
The decrease was due to net income of $9.0 million for the period
January 1 through June 30, 2000 less distributions of $15.0
million to shareholders for the first half of 2000.
The Company's long-term debt as of June 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)
June 30, 2000 December 31, 1999
ASSETS
Current assets
Cash 241,430 70,695
Current installments of notes
receivable - 1,681,538
Charter hire receivable 12,823,720 10,175,142
Prepaid expenses 66,866 14,525
Total current assets 13,132,016 11,941,900
Vessels under capital lease, less
accumulated depreciation of
$58,838,343 and $50,041,913 380,983,202 389,779,632
Capitalized financing fees and
expenses, less accumulated
amortization of $1,242,607
and $1,056,835 1,358,198 1,543,969
TOTAL ASSETS 395,473,416 403,265,501
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LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities
Accrued expenses and other current
liabilities 2,107,123 2,206,021
Current installments of credit facility - 1,681,538
Total current liabilities 2,107,123 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 267,797,894 273,809,543
Total shareholders equity 267,968,894 273,980,543
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 395,473,416 403,265,501
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KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in U.S. Dollars)
January 1, 2000 January 1, 1999
to June 30, 2000 to June 30, 1999
Charter hire revenue 22,865,115 19,972,445
Operating expenses:
Depreciation of vessels under
capital leases 8,796,430 8,796,430
Management fee 375,000 375,000
Administration expenses 31,701 45,615
9,203,131 9,217,045
Net operating income 13,661,984 10,755,400
Interest income 63,889 253,068
Interest expense (4,436,810) (4,641,758)
Other financial costs (252,712) (210,772)
(4,625,63) (4,599,462)
Net income 9,036,351 6,155,938
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KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in U.S. Dollars)
January 1, 2000 January 1, 1999
to June 30, 2000 to June 30, 1999
Cash flows from operating activities
Net income 9,036,351 6,155,938
Items to reconcile net income
to net cash provided by operating
activities:
Depreciation 8,796,430 8,796,430
Amortization of capitalized fees and
expenses 185,772 185,772
Changes in operating assets and
liabilities:
Receivables (1,019,381) 3,451,148
Accrued expenses and other current
liabilities (98,899) (72,276)
Net cash provided by operating
activities 16,900,273 18,517,012
Cash flows from financing activities
Repayments of loan (1,681,538) (3,363,076)
Distribution to shareholders (15,048,000) (15,390,000)
Net cash used in financing
activities (16,729,538) (18,753,076)
Net increase (decrease) in cash
and cash equivalents 170,735 (236,064)
Cash and cash equivalents at
beginning of period 70,695 315,223
Cash and cash equivalents at end
of period 241,430 79,159
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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 - - 9,036,351 9,036,351
Distribution
to shareholders - (6,011,649) (9,036,351) (15,048,000)
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Balance at
June 30, 2000 171,000 267,797,894 - 267,968,894
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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 authorised.
Knightsbridge Tankers Limited
(Registrant)
Date August 1, 2000 By /s/ Ola Lorentzon
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Ola Lorentzon
Chairman
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