One other related item- the tie-in's between Fredriksen entities. They exist and since they don't show on a Balance Sheet, it is sometimes easy to overlook (or miss entirely if one doesn'tfollow a Fredriksen company closely). With FRO, the 2011 restructuring created two of them.FRO prepaid SFL $50M in profit-share. That cash went towards paying down SFL's debt on thetankers and OBO vessels. It is a nice offset that only gets breached when the vessels leasedfrom SFL cross over the cash-sweep hurdle. That's at a 25% rate too.There seems to be a second one. This one is between FRO and Frontline 2012 (FRNT). I'm stilltrying to figure its implications, but I interpret it as a positive for FRO. Their Q3 financialstatements included this item in the footnotes--As part of the Restructuring described in Note 3, Frontline 2012 agreed to fully reimburse and indemnify the Company for all payments made under any guarantees issued by the Company to the shipyard in connection with the newbuilding contracts acquired and to reimburse the Company for all costs incurred in connection with these guarantees. One way to interpret that paragraph is FRNT reimbursing FRO all the capital spent on the5 VLCCs, which would be around $200M. Since FRNT is currently private equity, that reimbursement might not have to be cash. It could just as well end up being a future equityallocation of FRNT. Either way, it seems to be an intangible for FRO.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar