Frontline plans restructuring

Frontline, the largest independent global oil tanker operator, has unveiled a restructuring plan that should spare its investors a lot of pain and force Ship Finance International to take a big hit.

Industry bellwether Frontline will split in two, with the listed entity relieved of much debt and handed new charter rates, in an attempt to secure its future in an industry hit by weak demand and overcapacity. The last-minute deal spares existing shareholders dilution, and should mean lower costs. Frontline’s split will create an unlisted company, Frontline 2012, which will raise $250m in equity and take over commitments for newly built ships and related debt, and buy 10 tankers from Frontline at market value.