-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L6+OATPj+5rR3R3fIfELHBLVkLH99uRX+t0WX1oED0CZujty/iyqPkq7MevgjrAz OHZNKKKWsF0561hMm4VXcg== 0000919574-97-000670.txt : 19970808 0000919574-97-000670.hdr.sgml : 19970808 ACCESSION NUMBER: 0000919574-97-000670 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970807 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: KNIGHTSBRIDGE TANKERS LTD CENTRAL INDEX KEY: 0001029145 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-29106 FILM NUMBER: 97652935 BUSINESS ADDRESS: STREET 1: 41 CEDAR HOUSE STREET 2: HAMILTON HM 12 CITY: HAMILTON HM 12 BERMU STATE: D0 BUSINESS PHONE: 4412952244 MAIL ADDRESS: STREET 1: 41 CEDAR HOUSE STREET 2: HAMILTON HM 12 STATE: D0 6-K 1 COMMISSION FILE NO. 0-29106 FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE MONTH OF AUGUST, 1997 KNIGHTSBRIDGE TANKERS LIMITED (Translation of registrant's name into English) Cedar House 41 Cedar Avenue Hamilton HM 12 Bermuda (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F X Form 40-F Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes No X Item 1. INFORMATION CONTAINED IN THIS FORM 6-K REPORT Attached hereto is a copy of the second quarterly report of Knightsbridge Tankers Limited (the "Company"), dated July 28, 1997. Such report contains certain unaudited financial information accompanied by a Management's Discussion and Analysis of Financial Condition and Results of Operations for the period ended June 30, 1997. Item 2. ADDITIONAL INFORMATION Royal Dutch Petroleum Company and The Shell Transport and Trading Company, Public Limited Company file annual reports on Form 20-F (File Nos. 1-3788 and 1-4039) and periodic reports on Form 6-K with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Such annual reports contain the financial statements of the Royal Dutch/Shell Group of Companies. 2 Stockholm, July 28, 1997 TO THE SHAREHOLDERS OF KNIGHTSBRIDGE TANKERS LIMITED: This is our second quarterly report since our initial public offering, which closed on February 12, 1997. Enclosed is selected unaudited financial information accompanied by a Management's Discussion and Analysis of Financial Condition and Results of Operations for the period ended June 30, 1997. On February 27, 1997, the Company's ship owning subsidiaries purchased five very large crude carriers ("VLCC's") from their previous owners and delivered them to Shell International Petroleum Company Limited ("Shell International"), as charterer, under separate "hell and high water" bareboat charters. Under those charters, the Company's ship owning subsidiaries receive the greater of a Base Rate of hire in the amount of $22,069 per day per VLCC or a spot market related rate. After inclusion of a component for operating expenses of $10,500 per day, the spot market related rate must exceed $32,569 per day for the Company's subsidiaries to receive any additional charter hire over the Base Rate. Based upon the determination by the London Tanker Brokers Panel received July 2, 1997 the spot market related rate, after inclusion of the component for operating expenses, totaled $27,972 per day for the period April 1 through June 30, 1997. (The corresponding spot market related rate for the previous period, from delivery of the VLCC's on February 27 through March 31, 1997, was determined to be $28,750.) Accordingly, on July 15, 1997, Shell International paid to the Company's vessel owning subsidiaries charter hire at the Base Rate in the aggregate amount of $10.041.390 for the period April 1 through June 30, 1997. On July 15, 1997, the Board of Directors of the Company declared a distribution to shareholders of record as of July 25, 1997, payable on or about August 11, 1997, in the amount of $0.45 per share for the period April 1 through June 30, 1997. (For the previous period, from the closing of the public offering on February 12 through March 31, 1997, the board declared a distribution of $0.17 per share.) The interim distribution to shareholders, which consists of dividend and return of capital, will be allocated among retained earnings and paid in additional capital by the end of the fiscal year. 3 The Company has agreed to provide information to shareholders that are United States income tax payers by February 15, 1998, so that they may make the appropriate tax reporting and elections with the United States tax authorities with respect to the Company's status as a "Passive Foreign Investment Company". Under present United States tax rules, the amount of income reported by a shareholder is based on the Company's income on an annual basis. Therefore, the Company will provide information enabling shareholders to determine the tax consequences of their investment in the Company, including the treatment of distributions received from the Company, for the year ending December 31, 1997, and not for any shorter period. We are pleased to answer any inquiries that shareholders may have. Our investor relations contact is: Karl Molander, Tel: Int + 46-8-613 30 30, fax: Int + 46-8-613 99 09. The Nasdaq National Market symbol for the Company's Common Shares is "VLCCF". Very truly yours, /s/ Ola Lorentzon Ola Lorentzon Vice Chairman and Chief Executive Officer 4 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Knightsbridge Tankers Limited (the "Company") was incorporated in Bermuda on September 18, 1996. In February, 1997, the Company offered and sold to the public 16,100,000 common shares at an initial offering price of $20 per share. Simultaneously, the Company sold 1,000,000 common shares at a price of $20 per share to ICB International Limited, an indirect wholly-owned subsidiary of ICB Shipping Aktiebolag (publ) ("ICB"), a Swedish publicly traded ship owning and operating company. The Company used the proceeds of these offerings, together with advances under a $145.6 million credit facility from an international syndicate of lenders, primarily to fund the purchase by the Company's subsidiaries of five recently constructed very large crude carrier oil tankers ("VLCC's"). Upon their purchase from their previous owners, the VLCC's were delivered on February 27, 1997, to Shell International Petroleum Company Limited ("Shell International"), a company of the Royal Dutch/Shell Group of Companies, under separate "Hell and high water" bareboat charters. The term of these charters is a minimum of seven years, with an option for Shell International to extend the period for each VLCC for an additional seven-year term, to a maximum of 14 years per VLCC. Under the charters, Shell pays the greater of a Base Rate of hire of $22,069 per day or a spot market related rate, determined quarterly by the London Tankers Brokers Panel. After taking into account a component for operating costs of $10,500 per day, Shell International pays the higher rate if the award exceeds $32,569 per day. In addition, for the first three years of the charters, Shell International pays "Supplemental Hire" as described below. RESULTS OF OPERATIONS - FIRST HALF 1997 REVENUES The Company's revenues consist of charter hire of approximately $13.6 million for the period commencing February 27, 1997 and ending June 30, 1997. OPERATING EXPENSES The Company's operating expenses consist of (i) fees due to the Company's manager, ICB Shipping (Bermuda) Ltd, an indirect wholly-owned subsidiary of ICB (the "Manager"), (ii) 5 depreciation of the vessels and (iii) payments of insurance premiums for directors and officers liability insurance. There can be no assurance, however, that the Company will not have other expenses or contingent liabilities for which reserves will be required. LIQUIDITY AND CAPITAL RESOURCES Total shareholders equity of the Company at June 30, 1997 was approximately $319 million compared to $12,000 at September 18, 1996. The increase was due to (i) proceeds from the issuance of the Company's common shares in its offerings to the public and to ICB International Limited after deduction of underwriting discounts and commission of $18.9 million and payment of a commencement fee to the Manager in the amount of $2.7 million, and (ii) net income of the Company for the period from February 12 through June 30, 1997 in the amount of $4,758,538 less (iii) a distribution to the shareholder for the first quarter in the amount of $2,907,000. The Company's long-term debt as of June 30 consists of the principal amounts borrowed under its credit facility in the aggregate amount of $143.9 million. Of this amount, $18.5 million represents the Amortizing Loans and is payable in 11 equal quarterly installments ending on January 15, 2000. Supplemental Hire payable by Shell International is equal to amounts payable by the Company on account of the Amortizing Loans. The balance of the credit facility matures seven years and six months from February 27, 1997. Interest on this balance is payable quarterly in arrears. INTEREST INCOME AND EXPENSES Interest income of $698,242 was earned during the period. In addition the Company received interest income of $424,207 on the principal balance of the receivable note from Shell Inter- national. The Company's borrowings under its credit facility have been effectively converted to a fixed rate pursuant to a swap arrangement to which the Company is a party. Interest on the credit facility has effectively been fixed at 7.05 %, which resulted in interest expenses of $3,596,000 for the period. CURRENCY EXCHANGE RATES The international shipping industry's functional currency is the United States Dollar and virtually all of the Company's 6 operating revenues and expenses are expected to be denominated in United States Dollar. Accordingly, the company's operating results, following expiration or termination of the charters with Shell International, are not expected to be significantly affected by movements in currency exchange rates. 7 CONSOLIDATED INCOME STATEMENT INFORMATION (UNAUDITED) SEPTEMBER 18, 1996- APRIL 1, 1997- JUNE 30,1997 JUNE 30,1997 Charter hire revenue 13,617,260 10,041,390 OPERATING EXPENSES: Depreciation of vessels under capital leases -6,097,428 -4,435,878 Management fee -255,308 -187,500 Administration expenses -32,192 -23,677 __________ __________ OPERATING INCOME 7,232,332 5,394,335 Interest income 1,122,449 308,530 Interest expense and other financial costs -3,596,243 -2,601,952 __________ __________ NET INCOME 4,758,538 3,100,913 8 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) SEPTEMBER 18, 1996- APRIL 1, 1997 OPERATING ACTIVITIES JUNE 30, 1997 JUNE 30, 1997 Net income 4,758,538 3,100,913 Depreciation 6,097,428 4,435,878 Amortization of capitalised fees and expenses 127,981 92,891 Changes in operating assets and liabilities: Receivables -17,080,790 -6,629,683 Accrued expenses and other current liabilities 9,199,261 -602,053 ___________ __________ NET CASH PROVIDED BY OPERATING ACTIVITIES 3,102,418 397,946 INVESTING ACTIVITIES Notes receivable from Shell International -18,496,916 - Purchase of vessels under capital lease -439,821,548 ____________ _____ NET CASH USED IN INVESTING ACTIVITIES -458,318,464 - FINANCING ACTIVITIES Loan proceeds 141,293,511 - Net proceeds from share offerings 317,224,950 - Redemption of original share capital -12,000 - Distribution to shareholders -2,907,000 -2,907,000 ___________ __________ NET CASH PROVIDED BY FINANCING ACTIVITIES 455,599,461 -2,907,000 Net increase/decrease in cash and cash equivalents 383,415 2,509,054 Cash and cash equivalents at beginning of period 12,000 2,904,469 CASH AND CASH EQUIVALENT AT END OF PERIOD 395,415 395,415 9 CONSOLIDATED BALANCE SHEET ASSETS JUNE 30, 1997 SEPT. 18, 1996 (UNAUDITED) CURRENT ASSETS Cash 395,415 12,000 Current installments of note receivable 6,726,152 - Charter hire receivable 10,295,638 - Prepaid expenses 59,000 - __________ ______ TOTAL CURRENT ASSETS 17,476,205 12,000 Notes receivable 11,770,764 - Vessels under capital lease 433,724,116 - Capitalized financing fees and expenses 2,472,828 - ___________ ______ TOTAL ASSETS 465,443,913 12,000 ------------- ----------- ------------- ----------- LIABILITIES AND SHAREHOLDER'S EQUITY CURRENT LIABILITIES Accrued expenses and other current liabilities 2,473,110 - Current installments of credit facility 6,726,151 - _________ ________ TOTAL CURRENT LIABILITIES 9,199,261 - Credit facility 137,168,164 - SHAREHOLDER'S EQUITY Common stock, par value 0.01 per share: Authorized and outstanding 17,100,000 171,000 12,000 Paid in additional capital 317,053,950 - Retained earnings 4,758,538 - Distribution to shareholders -2,907,000 - ___________ ________ TOTAL SHAREHOLDER'S EQUITY 319,076,488 12,000 ----------- -------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY 465,443,913 12,000 ----------- ---------- 10 ----------- ---------- 11 CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY JUNE 30, 1997 (UNAUDITED) - ---------------------------------------------- ADDITIONAL DISTRIBUTION Share PAID IN RETAINED TO CAPITAL CAPITAL EARNINGS SHAREHOLDERS TOTAL Original issue Sept 18, 1997 12,000 - - - 12,000 Net proceeds from share issuance 171,000 317,053,950 - - 317,224,950 Original share redemption -12,000 - - - -12,000 Net income - - 4,758,538 - 4,758,538 Distribution to the Shareholders - - - -2,907,000 -2,907,000 ______________________________________________________________________________ Balance at June 30, 1997 171,000 317,053,950 4,758,538 -2,907,000 319,076,488 (Unaudited) 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. KNIGHTSBRIDGE TANKERS LIMITED (registrant) Dated: August 7, 1997 By: /s/ Ola Lorentzon ___________________________ Ola Lorentzon Director, Deputy Chairman and Treasurer 13 01655001.FO4 -----END PRIVACY-ENHANCED MESSAGE-----