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Frontline snaps up VLCC newbuildings under construction at HHI

Frontline snaps up VLCC newbuildings under construction at HHI
Frontline has purchased two VLCC resale newbuildings under construction at Hyundai Heavy Industries (HHI) at a price of $84m each, or $168m in total.

Frontline has also secured options for two additional sister vessels at a marginally higher purchase price of $85m each.

The confirmed pair of VLCC newbuildings are scheduled for deliveries in January and March 2017, respectively. The two additional optional newbuild ships are due to deliveries in September and November 2016, respectively.

Robert Hvide Macleod, ceo of Frontline Management, commented: “We have been consistently looking for ways to increase Frontline's exposure to the tanker market as current resale prices do not accurately reflect the earnings power of vessels on the water.

“This acquisition will be accretive in the near term given historically low pricing and the low cash breakeven rates on these vessels and across our fleet. It is also a reflection of our long term market outlook and our focus on generating significant cash flow to provide long term value to our shareholders.”