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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 OCTOBER , 1999
FRONTLINE LTD.
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(Translation of registrant's name into English)
MERCURY HOUSE, 101 FRONT STREET, 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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FRO: CAPITAL ADJUSTMENTS - INCREASE IN SHARE CAPITAL
The Board of Frontline today approved three transactions which
will substantially increase Frontline's financial flexibility in
the coming years. Frontline has entered into an agreement with
its banks to allow flexibility in its debt repayment schedule,
which, if utilized, will increase working capital by USD 32
million. The Company has issued approximately USD 20 million in
equity through a private placement with five financial
institutions. In addition, USD 35 million of the USD 89 million
Metrogas convertible subordinated loan has been converted to
equity. In connection with this conversion, Metrogas will offer
USD 15 million of the resulting ordinary shares to existing
Frontline shareholders and warrant holders.
FRONTLINE COMPLETES FINANCING PACKAGE
The Board of Frontline today approved three combined transactions
which will substantially increase Frontline's financial
flexibility in the coming years.
1. Frontline has entered into an agreement with the company's
banks, which gives Frontline increased flexibility with
respect to the repayment schedule of the company's debt. If
Frontline decides to utilize this opportunity in year 2000,
the company will reduce debt repayment and thereby increase
the working capital by approximately USD 32 million.
2. Frontline has issued approximately USD 20 million in equity
through a private placement. Issue price was NOK 33.00. The
total number of shares issued, 4,715,000 was placed with a
group of five investors. The transaction was successfully
placed by Fearnley Fonds ASA and Carnegie.
3. Metrogas Ltd., a company controlled by Frontline's major
shareholder Hemen Holding Ltd., has converted USD 35 million
of a USD 89 million subordinated loan given to Frontline into
equity. At an issue price of NOK 33.00 a total of 8,230,000
shares were issued. Hemen has agreed with Frontline that all
of Frontline's existing shareholders on record date September
30, 1999, excluding Hemen and the new shareholders arising
from the private placement referred to above, will be given a
pre-emptive right to buy approximately 3,500,000 of these
shares. Such a solution secures that all shareholders in
Frontline will have a right to obtain their pro rata part of
this issue. In accordance with Frontline's warrant
agreements, an equal right will be given to the warrant
holders. The subscription period for this transaction is
estimated to take place in mid October.
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The execution of transactions 2. and 3. is carried out within the
Board's existing authority to issue new shares.
The total number of shares outstanding in Frontline after
completion of this transaction will be 59,051,860.
The combined transaction will increase Frontline's equity by USD
55 million, and will improve the working capital by up to USD 52
million. The proceeds from the transactions will be used for the
following purposes.
1. To strengthen the company's liquidity / working capital and
thereby improve the company's financial overall resistance.
2. To finance the full take-over of ICB Shipping AB.
Frontline's Chairman John Fredriksen says in a comment : " We see
the support from our bankers, and the quality of the investors
who have participated in the private placement as a great sign
of confidence in Frontline and our strategy. During the last
three weeks a total of 5 VLCCs have been reported sold to scrap.
This shows that time is starting to run out for owners of old
tonnage. With the largest and most modern fleet in the world, and
with a substantially improved balance sheet, Frontline is
positioned to be one of the main beneficiaries of this
development. With the steep reduction we today see in oil
storage, it is only a matter of time before OPEC again will have
to increase production. We expect such a decision to have
significant positive influence on the freight market."
After implementation of the transaction, Frontline's current cash
breakeven TCE rates for 2000 have been reduced to approximately
USD 21,000 for the VLCCs ( including 2 lease vessels) and USD
15,000 for the Suezmaxes and OBOs. The Board feels confident with
these levels.
It is the Board's view that the current transaction fulfils
Frontline's existing need for balance sheet improvements, and
that a full consolidation of ICB can be completed within the
framework of the existing capital structure. The Board therefore
has no current plans to ask for a conversion of the remaining
part of Metrogas' subordinated loan (USD 54 million) or for any
other new equity.
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Bermuda
September 30, 1999
Contact person: Tor Olav Troim
Tel : 47 - 23 11 40 00
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.
Frontline Ltd.
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(Registrant)
Date October 4, 1999 By /s/ Kate Blankenship
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Kate Blankenship
Secretary
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02089006.AB7
