Fleet Modernization: Frontline Phases Out Five Senior VLCCs

John Fredriksen's maritime enterprise, Frontline, has officially announced the sale of its five most senior Very Large Crude Carriers (VLCCs).

Listed in both New York and Oslo, the renowned tanker behemoth is set to transfer these vessels, constructed in 2009 and 2010, to a yet-to-be-disclosed purchaser in the initial segment of 2024.

This transaction, valued at $290 million, is anticipated to yield net cash inflows of approximately $207 million. It's projected to result in a profit ranging from $68 million to $76 million in the first quarter, contingent upon the exact timing of the deliveries.

Market insiders, who had initially estimated the transaction's value at about $300 million, suggest that Sinokor, a South Korean entity, might be acquiring the 2009-launched Front Endurance, Front Kathrine, Front Queen, and the 2010-inaugurated Front Signe and Front Cecilie.

Lars Barstad, the CEO of Frontline, expressed satisfaction with the deal, stating, “We are very pleased with this transaction, capturing firm pricing for 14-15 year-old vessels.” He further noted, “Frontline has increased its position significantly in the VLCC segment during 2023 and this divestment of our remaining non-eco VLCCs is in line with our strategy of running the most modern, fuel-efficient fleet in the market.”

Post the completion of this sale and the acquisition of 24 ships from Euranav, Frontline's fleet will encompass 84 tankers, boasting an average age of just below six years.