Tanker owner and operator Frontline has secured a commitment for a senior secured term loan facility worth up to USD 328.4 million with China Exim Bank that will be used to finance eight newbuildings.

Specifically, the facility will be secured by four Suezmax tankers and four LR2 tankers, it matures in 2029 and has an amortization profile of 18 years.

This is in addition to a senior unsecured facility of up to USD 275 million from a company affiliated with Frontline’s largest shareholder, Hemen Holding Ltd, totaling in commitments for up to USD 603.4 million of new financing. The loan will be used to part finance the company’s current newbuilding program and potential acquisitions, Frontline said.

The ship owner added that it has also received a term sheet and is in the process of obtaining a commitment for a second facility with China Exim Bank in an amount of up to USD 324.6 million. It matures in 2033 and has an amortization profile of 15 years. This facility is insured by SinoSure, will be used to finance eight of the company’s newbuildings and will be secured by four Suezmax tankers and four LR2 tankers.

“The company has thus far obtained commitments for up to USD 394.4 million of bank debt financing for six LR2

tankers and four Suezmax tankers and is in the process of obtaining further commitments for up to USD 324.6 million for four LR2 tankers and four Suezmax tankers. Assuming we receive commitment for a further USD 324.6 million of bank debt financing, the remaining unfinanced instalments for our newbuildings will be USD 573.9 million,” Frontline said.

Based on committed and assumed bank debt of up to USD 1,05 billion, Frontline needs further USD 237 million to secure delivery of its current newbuilding program.

The company has ordered four VLCC newbuildings at STX Offshore & Shipbuilding Co (STX) shipyardwhich applied for court receivership last week, scheduled for delivery in 2017.

“Frontline has refund guarantees in place from first class banks and the remaining commitments total USD 319 million. The company is following the situation carefully and has commenced discussions with STX,” the company pointed out.

Frontline achieved net income of USD 78.9 million, for the first quarter of 2016.

“We are very pleased to report yet another strong quarter with net income attributable to the company of USD 78.9 million or USD 0.50 per share. Significantly, this was Frontline’s first full quarter following its merger with Frontline 2012 Ltd. Our performance, particularly in the VLCC segment was strong, despite some market weakness in February and March,” Robert Hvide Macleod, Chief Executive Officer of Frontline Management AS commented.

Total operating expenses of USD 124.3 million in the first quarter were higher than the previous quarter due to the significant increase in the fleet size as a result of the merger, which impacted the entire first quarter compared with only one month of impact in the previous quarter.

Frontline took delivery of four LR2 tanker newbuildings in the first quarter and one LR2 tanker newbuilding in May 2016.

An additional six newbuilding deliveries are expected in 2016, and the final 17 newbuilding vessels are expected to be delivered in 2017.

“These vessels have the capability to transport both crude and refined products, and while our primary focus has always been on the transportation of crude oil, our increasingly diversified fleet also provides us leverage to create value in refined product trades and helps to maximize our chartering strategy,” he added.

As of March 31, 2016, the company’s fleet consisted of 83 vessels, including newbuildings, with an aggregate capacity of approximately 15 million DWT.

In terms of outlook, Frontline believes that it is in a “unique position to take advantage of a strong tanker market.”

“Due to the size and diversity of our fleet, as well as our very low cash breakeven rates, we believe we will continue to generate solid high returns for our shareholders. We have a long track record of doing so, and we seek to carry on that tradition as we increase our leadership role in the market,” the company said.