• Company Facts
  • Strategy
  • History
  • Operations

• Management
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    Officers
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History

Ship Finance International Limited (.Ship Finance.) was formed in 2003 as a wholly owned subsidiary of Frontline, which is one of the largest owners and operators of large crude oil tankers in the world. On May 28 2004 Frontline announced the distribution of 25% of our common shares to its ordinary shareholders in a partial spin off, and our common shares commenced trading on the New York Stock Exchange under the ticker symbol .SFL. on June 17 2004. Frontline subsequently made six further dividends of our shares to its shareholders, including the final distribution in March 2007. Frontline.s ownership in our Company is now less than one per cent.

Pursuant to an agreement entered into in December 2003, we purchased from Frontline, effective January 2004, a fleet of 47 vessels, comprising 23 Very Large Crude Carriers (.VLCCs.), including an option to acquire one VLCC, 16 Suezmax tankers and eight OBOs.

Since January 1 2005 we have diversified our asset base from the initial two asset types - crude oil tankers and OBOs - to eight asset types, now including container vessels, drybulk carriers, chemical tankers, jack-up drilling rigs, seismic vessels and offshore supply vessels.

During 2006 and 2007 we have reduced our non-double hull tanker fleet from 18 vessels to nine vessels including the VLCCs Front Vanadis and Front Sabang, which we have sold on hire-purchase terms scheduled to expire in November 2010 and October 2011, respectively.

Most of our oil tankers and OBOs are chartered to the Frontline Charterers under longer term time charters that have remaining terms that range from five to 19 years. The Frontline Charterers, in turn, charter our vessels to third parties. The daily base charter rates payable to us under the charters have been fixed in advance and will decrease as our vessels age, and the Frontline Charterers have the right to terminate the charter for non-double hull vessels from 2010.

We have entered into charter ancillary agreements with the Frontline Charterers, our vessel-owning subsidiaries and Frontline, which remain in effect until the last long term charter with the relevant Frontline Charterer terminates in accordance with its terms. Frontline has guaranteed the Frontline Charterers. obligations under the charter ancillary agreements. Under the terms of the charter ancillary agreements, beginning with the final 11 month period in 2004 and for each calendar year after that, the Frontline Charterers have agreed to pay us a profit sharing payment equal to 20% of the charter revenues they realize above specified threshold levels, paid annually and calculated on an average daily TCE basis. After 2010, all of our non-double hull vessels will be excluded from the annual profit sharing payment calculation.

We have also entered into agreements with Frontline Management to provide fixed rate operation and maintenance services for the vessels on time charter to the Frontline Charterers and for administrative support services. These agreements enhance the predictability and stability of our cash flows, by substantially fixing all of the operating expenses of our crude oil tankers and OBOs.

There are also profit sharing agreements relating to the charters of the jack-up drilling rigs West Ceres and West Prospero, where we will receive profit shares calculated as a percentage of the annual earnings above specified thresholds relating to milestones set under the relevant charters. These profit sharing agreements become effective in 2009.

The charters for drillship, two jack-up drilling rigs, three dry bulk carriers, five container vessels, three seismic vessels, six offshore supply vessels, two chemical tankers and the two VLCCs Front Vanadis and Front Sabang are all on bareboat terms, under which the respective charterer will bear all operating and maintenance expenses.

Transaction history

• May 2008, acquired the ultra deep-water drillship newbuilding from Seadrill. The vessel is expected to be delivered in June 2008
• March 2008, acquired two newbuilding chemical tankers from Bryggen Shipping and Trading AS. The first vessels was delivered in April 2008 and the second vessel is expected to be delivered in 3Q 2008.
• March 2008, re-chartered the single-hull VLCC Front Sabang to an unrelated third party. The new charter is in the form of a hire-purchase agreement, where the vessel is chartered to the buyer for a 3.5 year period, with a purchase obligation at the end of the charter.
• December 2007, sold Sea Trout a platform supply vessel to Deep Sea Supply Plc (.Deep Sea.). The vessel was delivered in January 2008.
• December 2007, sold two non-double hull Suezmax tankers. The vessels were delivered in December 2007 and January 2008.
• November 2007, acquired two offshore support vessels from Deep Sea
• August 2007, acquired five offshore support vessels from Deep Sea
• July 2007, acquired the 1,700 TEU container vessel Montemar Europa. The vessel, built in 2003, was delivered to us in August 2007.
• June 2007, acquired five newbuilding container vessels with scheduled delivery in 2010.
• June 2007, acquired 10% of the equity of Seachange Maritime LLC, a Miami based company that owns and charters containerships.
• May 2007, re-chartered the single-hull VLCC Front Vanadis to an unrelated third party. The new charter is in the form of a hire-purchase agreement, where the vessel is chartered to the buyer for a 3.5 year period, with a purchase obligation at the end of the charter.
• March 2007, acquired three newbuilding seismic vessels, including complete seismic equipment, from SCAN Geophysical. The vessels are scheduled to be delivered in 2008.
• February 2007, aquired two newbuilding Capesize vessels contracts from Golden Ocean. Delivery from the shipyard is scheduled in the fourth quarter of 2008 and first quarter of 2009.
• January 2007, acquired a newbuilding jack-up drilling rig currently under construction from SeaDrill Invest II Ltd, a wholly owned subsidiary of Seadrill. The rig was delivered in June 2007.
• January 2007, sold the single-hull Suezmax tanker Front Transporter. The vessel was delivered to its new owner in March 2007.
• January 2007, sold a total of five single-hull Suezmax tankers to Frontline. The vessels were delivered to Frontline in March 2007.
• December 2006, sold the VLCC Front Tobago to an unrelated third party.
• November 2006, acquired two newbuilding Suezmax contracts from Frontline with delivery expected in the first quarter of 2009 and third quarter of 2009.
• July 2006, acquired the Panamax dry bulk carrier Golden Shadow from Golden Ocean. The vessel was delivered to us in September 2006.
• June 2006, acquired, the jack-up drilling rig West Ceres from SeaDrill Invest I Ltd, a wholly owned subsidiary of Seadrill.
• April 2006, acquired five 2,824 TEU container vessels built at Hyundai Mipo yard in Korea from Horizon Lines. Under this agreement the Horizon Hunter was delivered in November 2006, the Horizon Hawk in March 2007, Horizon Eagle and Horizon Falcon in April 2007 and the final vessel, Horizon Tiger in May 2007.
• January 2006, acquired the VLCC Front Tobago from Frontline.
• November 2005, the bareboat charterer of the VLCC Navix Astral exercised an option to purchase the vessel. The vessel was delivered to its new owner in January 2006.
• August 2005, sold a Suezmax tanker, the Front Hunter to an unrelated third party.
• June 2005, acquired two vessel owning companies, each owning one 2004 built VLCC from parties affiliated with Hemen.
• May 2005, acquired two vessel owning companies, each owning one 2005 built containership, Sea Alfa and Sea Beta, from parties affiliated with Hemen.
• May 2005, acquired three Suezmax tankers from Frontline, the Front Traveller, Front Transporter, and Front Target.
• May 2005, sold the three Suezmax tankers, Front Lillo, Front Emperor and Front Spirit. These vessels were delivered to their new owners in June 2005.
• January 2005, sold a Suezmax tanker, the Front Fighter, to an unrelated third party. The vessel was delivered to its new owner in March 2005.
• January 2005, we exercised the option to acquire the VLCC Oscilla
• January to March 2005, acquired three additional double hull VLCCs from Frontline.
• January 2004, purchased the initial 46 vessel owning subsidiaries from Frontline. Additionally Ship Finance purchased Frontline's option to acquire an additional VLCC.