Frontline Ltd.

Infobox_Company
company_name = Frontline Ltd.
company_
company_type = Public (ose|FRO, NYSE|FRO)
foundation = 1985
location = Hamilton, Bermuda
key_people = John Fredriksen (Chairman of the board and CEO)
industry = Oil tanker shipping
revenue = US $1.300 billion (2007)cite web |url=http://www.frontline.bm/reports/182/R/1216557/254227.pdf |title=Annual Report 2007 |publisher=Frontline |accessdate=2008-05-21]
net_income = profit US $570.4 million (2007)
num_employees = 51 (2007)
homepage = [http://www.frontline.bm/ www.frontline.bm]
intl = yes

Frontline Ltd. (ose|FRO, NYSE|FRO) is one of the world's largest oil tanker shipping companies, based in Hamilton, Bermuda and controlled by John Fredriksen. Its primary business is transporting crude oil. As of 2008 the company has one of the world's largest tanker fleets consisting of VLCC, Suezmax and Suezmax OBO carriers (82 tankers in total with 18 more on order). [ [http://hugin.info/182/R/1245195/268807.pdf Frontline Ltd. Q2 2008 presentation] ]

History

Frontline has its origin in Frontline AB, which was founded in 1985, and which was listed on the Stockholm Stock Exchange from 1989 to 1997. Hemen Holding (a company indirectly controlled by the largest shareholder and chairman of Frontline, John Fredriksen) became the largest shareholder of Frontline in 1996. In May 1997, a decision was made at the general meeting in Frontline AB to change its domicile from Sweden to Bermuda and to list its shares on the Oslo Stock Exchange. The change of domicile was executed through a share for share exchange offer from the then newly formed Frontline in Bermuda.

Under Fredriksen, the company absorbed several other companies: London Overseas Freighters (1997), ICB (1999), and Golden Ocean (2000). These takeovers made Frontline the world's largest tanker company, a position it has retained to the present day. [ [http://www.bloomberg.com/apps/news?pid=10000103&sid=aqMpd3s9seRo&refer=us Article in Bloomberg on takeover bid for Genmar] ] [http://www.kjendis.no/2008/02/28/528295.html Norwegian article on John Fredriksens daughters, and their connections to Frontline]

Today

As of 2008, Frontline's fleet consists of 66 tankers, totaling 16.4 million dead weight tons. The company's largest shareholder is Hemen Holding Ltd., a company indirectly controlled by the chairman of Frontline, billionaire John Fredriksen, Norway's highest net worth person.

The freight market is a very volatile market, with standard deviations of up to 70%. From an options perspective, this is a possibility for a very large up and downside - part of this downside can be hedged away via freight derivatives. AG-Japan clean and dirty are the most liquid routes traded in the derivatives market. Frontline has a very high dividend yield, both in cash and in Ship Finance (SFL) stocks; in late 2007 its annual dividend was running between 12 and 18%, depending on the fluctuating share price. SFL is an offshoot of Frontline; the offshoot is estimated to have generated 25% gains to shareholders due to the different risk in Frontline and SFL. Golden Ocean Group (GOGL), a dry bulk carrier firm, was also spun off of Frontline and listed on the Oslo Stock Exchange. GOGL is a volatile stock, and as with Frontline, dry freight derivatives are available. In 2006, Frontline has started a new Floating Production Storage and Offloading (FPSO) project, Sea Production.

In June 2007, Frontline sold its entire holding of 25,500,000 shares in Sea Production. The sale of the shares was in line with Frontline's strategy to remain a pure crude oil transportation company. Frontline and Sea Production will continue a strategic partnership with respect to conversion of crude oil tankers into oil storage and production units.

Directors and Executive Officers

*Chairman, CEO, President and Director: John Fredriksen
*Vice-President: Tor Olav Trøim
*Director, Kathrine Fredriksen
*Director, Kate Blankenship
*Director, Frixos Savvides
*CFO, Frontline Management: Inger M. Klemp

External links

* [http://www.frontline.bm Frontline Ltd. website]

References