Frontline ends Q3 with debt of $1.2 billion, completes exchange

By Lisa Kerner

Charlotte, N.C., Nov. 27 - Frontline Ltd. ended the third quarter with cash and cash equivalents of $79.3 million and restricted cash of $59.2 million.

Cash decreased by $16.6 million from the prior quarter, said chief financial officer Inger Klemp during the company's third-quarter earnings conference call on Wednesday.

As of Sept. 30, Frontline had total debt and lease obligations, excluding non-recourse debt in ITCL, of about $1.2 billion comprised of $841 million in lease obligations to Ship Finance, $66 million in lease obligations to German KGs and $215 million in a convertible bond loan.

Full repayment of this debt is primarily dependant on a sustained improvement in tanker rates in the years to come, according to a company news release.

Frontline's board is "actively monitoring the situation" and seeking opportunities to restructure the balance sheet and improve the company's financial position, the news release stated.

In October, the company entered into a private agreement to exchange $25 million of its 4.5% convertible bond for about 6.5 million shares and a cash payment of $2.25 million.

The board did not declare a third-quarter dividend.

During the third quarter, Frontline recorded a vessel impairment loss of $22.4 million and issued 329,532 of new ordinary shares.

Frontline reported a third-quarter net loss of $36.4 million, or a loss per share of $0.46.

This compares to a net loss of $120.3 million, or a net loss per share of $1.54, in the second quarter.

Hamilton, Bermuda-based Frontline is an oil tanker shipping business.

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