Frontline (FRO), the troubled oil tanker company that has fallen recently on reduced demand for tanker ships, announced today it will restructure. Shares jumped 25% on the news.
Frontline’s board approved a plan to shift some debt and assets to a new entity, allowing the core company to move forward without as much of a debt burden. Another company called Hemen Holding, which is indirectly controlled by trusts created by Frontline Chairman John Fredrickson, is integral to the deal, Dow Jones Newswires reported. That company is providing $505 million in guarantees.
The deal allowed Frontline to forgo raising new equity, which would dilute existing shareholders.
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