Knightsbridge Tankers Limited (NASDAQ:VLCCF): The Leading US listed Capesize Company In Making

Steve Hackney - April 24, 2014

Boston, MA 04/24/2014 (wallstreetpr) – Knightsbridge Tankers Limited (NASDAQ:VLCCF) and Frontline 2012 Ltd. are coming together to form a leading US listed Capesize company. The new company will have a fleet of 39 modern vessels. VLCCF will combine the 25 fuel efficient vessels of Frontline with its own fleet. The 25 fuel vessels will be coming in between September 2014 and September2016. The first five vessels will be coming in 2014; the next 14 vessels in year 2015 and the last six vessels will be delivered in year 2016.  Knightsbridge have also acquired one vessel from Hemen Holding Ltd. The company bought five new buildings from Frontline 2012.

The agreement

As per the agreement, the companies will use the NAV to decide about the exchange ration for the acquisition. Accordingly the decision on share issuance will be taken. The broker values as on March 31, 2014 will act as a base of calculation. The exchange ratio of Knightsbridge and Frontline 2012 stands at 44%:56%. Therefore, Knightsbridge will issue 62 million shares to Frontline 2012.

The 62 million shares will be given in two equal stages. The first part of 31 billion shares will be executed around September 15, 2014 and second equal part will be executed around March 15, 2015. It will leave the Knightsbridge with an outstanding shares amount of 111 million.  After the issuance of shares, Frontline will now own 70% shares. 275 will be hold by other existing Knightsbridge Tankers Limited (NASDAQ:VLCCF) shareholders and remaining 3% with Hemen.

The transaction will be passed after the necessary formalities are completed and regulatory approvals are met. It also needs the approval from the Knightsbridge’s shareholders to increase its authorized share capital which will allow the company to issue the new shares to Frontline 2012.  Knightsbridge Tankers Limited (NASDAQ:VLCCF) is positive on the transaction and calls it as transformative step making the company leading US listed Capesize owner.

Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

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