FRO – Fully funded acquisition of 24 modern VLCCs from Euronav NV

Frontline plc ("Frontline”) (NYSE and OSE: FRO), today announced that as an integrated solution to the strategic and structural deadlock in Euronav NV ("Euronav”), Frontline has entered into agreements with Euronav to acquire a high-quality ECO fleet of 24 VLCCs with an average age of 5.3 years, for an aggregate purchase price of USD 2,350 million (the "Acquisition”). The Acquisition is fully funded through the sale of Frontline’s shares in Euronav to CMB NV ("CMB”) and an attractive debt package as described below.

In connection with the Acquisition, Frontline and Famatown Finance Limited ("Famatown”) have agreed to sell all their shares in Euronav (representing 26.12% of Euronav’s issued shares) to CMB at a price of USD 18.43 per share. Following the acquisition of Euronav shares from Frontline and Famatown, CMB will own 49.05% of Euronav’s issued shares (representing 53% of the voting rights in Euronav). The sale of the Euronav shares and the Acquisition set forth above are inter-conditional, and such inter-conditionality has to be approved by the Euronav shareholders meeting through a 50% +1 vote majority. The Acquisition is further conditional upon customary anti-trust approvals and expected to close in Q4 2023.

This transaction fortifies Frontline’s position as one of the leading tanker companies in the public domain and is expected to be highly accretive on earnings and free cash flow per share. The key highlights of the Acquisition are:

• Attractive fleet of 24 ECO VLCCs, of which 22 are Korean built and nine are scrubber fitted. All vessels are on the water, in an environment of long lead times for new capacity to be obtained. Please see Appendix 1 for the vessel list.
• Increasing the total fleet size from 65 to 89 vessels, making Frontline the largest pure play tanker owner in the public domain measured by dwt.
• Increasing operational leverage towards the VLCC segment with the lowest orderbook-to-fleet ratio, currently at about 2%.
• Significantly increasing free cash flows and earnings per share potential, boosting Frontline’s dividend capacity.

Mr. John Fredriksen, Director of Frontline, commented:

"I firmly believe in building best in class companies through consolidation. This transaction will solidify Frontline’s position as the leading publicly listed tanker company, and significantly expand our exposure towards modern efficient VLCCs at an opportune time in the cycle.”

Mr. Lars H. Barstad, Chief Executive Officer of Frontline Management AS, commented:

"This transaction reflects our platform’s ability to act decisively on large scale fleet transactions with the support of our largest shareholder and key relationship banks. The structure of the transaction will significantly increase Frontline’s operating leverage as we enter a period of historical low deliveries of new capacity in the tanker market.”

The Acquisition is fully funded by the sale of Frontline’s 13.7 million shares in Euronav to CMB, generating proceeds of $252 million, cash on hand, drawdown under the existing $275 million senior unsecured revolving credit facility provided by an entity related to Hemen Holding Ltd., Frontline’s largest shareholder (the credit facility has been extended by 20 months to January 4, 2026, at an interest rate of 10.0% and otherwise on existing terms), and a new 5-year senior secured term loan facility in an amount of $1,410 million provided by a selection of leading lending banks. Lastly, Hemen, has offered Frontline a subordinated unsecured shareholder loan of up to $540 million on similar terms as the bank loan. This may not be fully drawn as the Company is exploring other alternatives to free up capital including re-leveraging part of the existing Frontline fleet on attractive terms and/or sale of non-core assets.

As part of the overall agreement, the arbitration action filed by Euronav in January 2023 following Frontline’s withdrawal from their combination agreement will be terminated. No cash consideration is included in the settlement of the action which, if allowed to continue, would have posed a significant obstacle to the resolution of the structural deadlock between Euronav’s main shareholders.

Advisors:

DNB Markets, a part of DNB Bank ASA is serving as financial advisor to Frontline. Advokatfirmaet Schjødt AS, Advokatfirmaet Wiersholm AS and Allen & Overy LLP are serving as legal counsel to Frontline in connection with the Acquisition.

October 9, 2023

The Board of Directors
Frontline plc
Limassol, Cyprus

Questions should be directed to:

Lars H. Barstad: Chief Executive Officer, Frontline Management AS
+47 23 11 40 00

Inger M. Klemp: Chief Financial Officer, Frontline Management AS
+47 23 11 40 00

Appendix 1: Acquisition fleet

List of vessels to be acquired by Frontline from the Euronav fleet

Frontline considers that the information included in this announcement constitutes inside information pursuant to article 7 of the Market Abuse Regulation and this information is publicly disclosed in accordance with article 17 of the Market Abuse Regulation and section 5-12 of the Norwegian Securities Trading Act. The announcement was published by the contact persons at 08:00 CET on October 9, 2023.

Forward-Looking Statements

Matters discussed in this announcement may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements, which include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

Frontline and its subsidiaries, desire to take advantage of the safe harbour provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbour legislation. This announcement and any other written or oral statements made by Frontline or its behalf may include forward-looking statements, which reflect its current views with respect to future events and financial performance and are not intended to give any assurance as to future results. When used in this document, the words "believe,” "anticipate,” "intend,” "estimate,” "forecast,” "project,” "plan,” "potential,” "will,” "may,” "should,” "expect” and similar expressions, terms or phrases may identify forward-looking statements.

The forward-looking statements in this announcement are based upon various assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and data available from third parties. Although Frontline believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond Frontline's control, it cannot assure you that Frontline will achieve or accomplish these expectations, beliefs or projections. Frontline undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. In addition to these important factors and matters discussed elsewhere herein, important factors that, in Frontline's view, could cause actual results to differ materially from those discussed in the forward-looking statements include the parties’ ability to obtain the necessary regulatory approvals and to meet other closing conditions to complete the transactions referenced herein, as well as important factors described from time to time in the reports and other documents, including filings with the U.S. Securities and Exchange Commission.