Tanker Operators Encounter Rough Fiscal Seas
Bermuda-based Frontline was cited in a “Wall Street Journal” report yesterday [Apr. 14] on the turbulent financial seas the world’s largest tanker operators are now operating in.
Headlined “Oil-Tanker Operators Struggle to Stay Afloat”, the “Wall Street Journal” said after several years of losses, some oil-tanker operators are now struggling to survive.
“Encouraged by high charter rates, ship owners ordered tankers before the onset of the financial crisis,” said the leading financial newspaper. “But now demand is drying up because of the weaker global economy and fewer shipments to the US.”
Frontline, based in Hamilton, Bermuda, said on February 22 there’s a risk it won’t be able to repay $225 million of convertible bonds due April 2015 if the tanker market doesn’t recover before that year and the company can’t raise additional equity or sell assets.
The operator of 33 Very Large Crude Carriers [VLCCs], Frontline lost 38 percent of its market value in February.
