Frontline CFO: Company able to finance new building without using cash from operations

By Jennifer Lanning Drey

Portland, Ore., Aug. 27 - Frontline Ltd.'s recently secured financings and convertible bond offering show that the company will be able to finance its new building program with sources other than cash from operations, Inger M. Klemp, Frontline's chief financial officer, said Friday during its earnings conference call for the second quarter.

The company has a total of $355.3 million in remaining installments due under its new building program between June 30, 2010 and the end of 2013.

Frontline has not yet secured financing for new buildings to be delivered between 2011 and 2013.

However, established and assumed obtainable financing for the program totals $314 million, Klemp said.

The remaining $41 million is fully covered through Frontline's recently completed $225 million convertible bond offering, she said.

The company had cash and cash equivalents of $168.6 million and restricted cash of $305.1 million at June 30, according to its second-quarter earnings release.

Frontline reported net income attributable to the company of $81.3 million for the second quarter, compared with net income attributable to Frontline of $79.7 million in the previous quarter.

Net operating income in the second quarter was $118.0 million, compared with net operating income of $112.0 million in the prior quarter.

Oslo-based Frontline is an oil tanker shipping business.

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