Oslo-listed Frontline has received approval from Norwegian financial authorities to issue new shares as consideration for its planned merger with affiliate company Frontline 2012, with just over two weeks to go before shareholders vote to approve the consolidation.
The Norwegian Financial Supervisory Authority has approved the prospectus for the listing of the 55m new Frontline shares earmarked for fellow Fredriksen-led vehicle Ship Finance International (SFI) . Each share in the tranche has a par value of $1.00.
On June 5, SFI agreed to reduce base rates for the 17 tankers it has on long-term charters to Frontline in exchange for a 27.7% stake or 55m shares in the company.
The financial authority has also approved the issuance of up to 583,562,102 new shares in Frontline, each with a par value of $1.00. The shares form part of the consideration for the merger and will be traded on the Oslo Stock Exchange from December 1, a filing said.
When the merger is completed, shareholders will receive 2.55 shares in Frontline for every one share they hold in they hold in Frontline 2012 as the merger consideration.
The merger, announced in July, remains subject to shareholder approval, which will be decided at special general meetings of Frontline and Frontline 2012 shareholders on November 30. Over 75% of voting Frontline 2012 shareholders and over 50% of voting Frontline shareholders must vote in favour of the consolidation.
Subject the the approval, the last day of trading in Frontline 2012 share, inclusive of the right to receive
the merger shares, will be November 30. This will also be the last day of Frontline 2012’s listing on the Norwegian over-the-counter list.
After close of trading in Oslo, the completion of the merger is expected to be registered Registrar of Companies in Bermuda, subject to shareholders’ approval.
Hemen Holding Limited, a company indirectly controlled by trusts on behalf of John Fredriksen’s family, has already indicated it will vote in favour of the merger. Heman owns around 13% of the ordinary shares in Frontline, 59% of the shares in Frontline 2012 and Ship Finance International Limited, plus a 28% stake in Frontline.
Once the merger is completed, Hemen will own approximately 52% of Frontline; Ship Finance will own a 7% stake.