NEW YORK (AP) — Frontline Ltd. has taken a major step toward splitting off part of its fleet to reduce debts.
The Bermuda tanker owner said Friday that $285 million was raised from investors to help pay for a restructuring plan that will allow it to shed expensive contracts for new tankers. The money was raised by another company, Frontline 2012, that was recently created with the help of Frontline Ltd. Board Chairman John Fredriksen.
Under the restructuring plan, Frontline 2012 will pay Frontline Ltd. $1.121 billion for new oil tankers and other assets. Frontline 2012 also will take on Frontline Ltd.'s $666 million in bank debt and another $325.5 million in payments for new tankers.
Since announcing the plan earlier this month, Frontline 2012 has raised $285 million in a private sale of company shares — $35 million more than expected. Frontline Ltd. bought a 8.8 percent stake in the new company.
The sale is expected to close on Dec. 29, and the companies expect to complete the restructuring plan by the end of the year.
Shares fell by 9 cents, or 2.6 percent, to $3.40 in premarket trading.