Purchase and sale

Norway’s Frontline is buying a VLCC from its shipowning spin-off Ship Finance International (SFI) and selling it on in Indonesia in a 10-year payment deal.

The company said the 300,000-dwt VLCC Front Vista (built 1998) will cost $58.5m from SFI.

An Indonesian buyer will then acquire the ship and charter it to state oil group Pertamina, paying Frontline an unspecified price in instalments over 10 years. The deal has been structured this way to get around domestic rules, TradeWinds understands.

Pertamina will charter the vessel for 10 years at $43,500 per day, or nearly $155m over the whole term.

SFI said it would receive net proceeds of $22.1m after paying off dent, giving it a book gain of $1.8m.

In September last year, Pertamina was believed to have tied up a deal for the vessel over 10 years at $50,000 per day.

But sources close to Pertamina said the deal failed on subjects, as it did not want to pay the high rate.

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