This excerpt taken from the FRO 20-F filed Apr 30, 2009.
33. SUBSEQUENT EVENTS
In December 2008, Frontline entered into an agreement with Teekay Corporation to commercially combine their Suezmax tankers within the Gemini Pool. Operation of the pool began in January 2009.
On January 2, 2009 the lease agreement between Buckingham Shipping Plc, a subsidiary of ITCL, and Dresdner Kleinwort Leasing was terminated and the outstanding lease obligation was settled in full using restricted cash. At December 31, 2008 the total obligation was $69.3 million. The vessel was sold to another subsidiary of ITCL which means that Frontline legally owns the vessel as of January 2, 2009 subsequent to the termination. The termination was cash neutral for the Company since the net consideration paid for the vessel by the ITCL subsidiaries was nil.
On January 8, 2009, the Front Kathrine was delivered to the Company, being the first newbuilding contract VLCC from Waigaoqiao Shipbuilding Company Ltd.
In January 2009, the Ship Finance entered into a purchase option contract granting a third party the option to purchase the Mindanao.
In February 2009, the Company's Board of Directors declared a cash dividend of $0.25 per share which was paid on March 27, 2009.
On February 20, 2009, the Company advanced Ship Finance a further $25.0 million on its profit share, which was due in March 2009. The advance bore interest at a fixed rate.
In March 2009, Frontline Shipping III Limited ("FSL III"), a wholly owned subsidiary of the Company, and Ship Finance amended their charter ancillary agreement whereby the charter service reserve totaling $26.5 million relating to vessels on charter from Ship Finance may be in the form of a loan to Ship Finance. In March 2009, a loan in the amount of $26.5 million was drawn down by Ship Finance. The loan bears interest at LIBOR plus a margin and is due for repayment within 364 days of the loan being provided, or earlier in accordance with the agreement.
In March 2009, upon the lenders' request, the Company paid $3.8 million into a restricted bank account in order to comply with a minimum value clause, as of December 31, 2008, related to the $180.0 million term loan facility.
The first three Suezmax newbuildings due for delivery have not met their contractual delivery dates. The Company is currently discussing the delays with the shipyard and considering any remedies that may be available to the Company.