SFL - Adjusted agreement with Frontline Ltd. - Seite 2

When issued, the shares will represent approximately 27.7% of the total shares in Frontline on a diluted basis. Following customary filing requirements, the shares received may be distributed to our shareholders as a special dividend or sold at a later stage. In addition, Ship Finance owns approximately $117 million of senior unsecured amortizing notes in Frontline, which will remain unchanged and serviced by Frontline like before.

The release of the charter guarantee relating to our charters is seen as an important feature to facilitate strategic transactions in Frontline, including potential mergers and/or acquisitions going forward.

CEO of Ship Finance Management AS, Ole B. Hjertaker said in a comment: "We are currently enjoying a very strong tanker market, and the new and higher profit share arrangement is likely to generate higher net cash flows from the vessels in the near term. Lower base rates will also ensure a more sustainable long term structure, with a cash buffer to mitigate potential fluctuations in the charter market.

Since the establishment of Ship Finance in 2004, we have received more than $600 million in cash sweep and profit sharing from Frontline. It has enabled the Company to grow and diversify the asset base much faster than originally anticipated with corresponding higher dividend capacity. Changing the calculation of the profit split to quarterly basis and starting from a lower level adds interesting optionality for us going forward, with the potential for increased long term quarterly distribution capacity."

May 29, 2015

The Board of Directors

Ship Finance International Limited

Hamilton, Bermuda

 

Questions can be directed to Ship Finance Management AS:

Harald Gurvin, Chief Financial Officer: [phone]

Andre Reppen, Senior Vice President: [phone]

Media Contact:

Ole B. Hjertaker, Chief Executive Officer: [phone]

 

About Ship Finance

Ship Finance is a major ship owning company listed on the New York Stock Exchange (NYSE: SFL). Including recent acquisitions, the Company will have a fleet of 72 vessels, including 19 crude oil tankers (VLCC and Suezmax), two chemical tankers, 22 dry bulk carriers (including 8 acquisitions), 17 container vessels, two car carriers, six offshore supply vessels, two jack-up drilling rigs and two ultra-deepwater semi-submersible drilling rigs. The fleet is one of the largest in the world and most of the vessels are employed on long-term charters.