-----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, OeKk3w0oqHwIFXDHrjh8rF9mARnMZUGZ45esRnQVnR9WuC4WflhGnH7YJTm2grGC NwvtY2sHAtTWTo5r7w9QjQ== 0000919574-03-001751.txt : 20030909 0000919574-03-001751.hdr.sgml : 20030909 20030909161626 ACCESSION NUMBER: 0000919574-03-001751 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030909 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KNIGHTSBRIDGE TANKERS LTD CENTRAL INDEX KEY: 0001029145 STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [4400] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-29106 FILM NUMBER: 03888220 BUSINESS ADDRESS: STREET 1: 41 CEDAR HOUSE STREET 2: HAMILTON HM 12 CITY: HAMILTON HM 12 BERMU STATE: D0 ZIP: 10004 BUSINESS PHONE: 4412952244 MAIL ADDRESS: STREET 1: 41 CEDAR HOUSE STREET 2: HAMILTON HM 12 CITY: NEW YORK STATE: D0 ZIP: 10004 6-K 1 d427325_6-k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of September , 2003 --------------------------------------------------------- Knightsbridge Tankers Limited - -------------------------------------------------------------------------------- (Translation of registrant's name into English) Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM 08, 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 ---------- ---------- If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ---------- Item 1. INFORMATION CONTAINED IN THIS FORM 6-K REPORT Attached as Exhibit 1, is a copy of the Second Quarter 2003 Report to Shareholders of Knightsbridge Tankers Ltd. (the "Company") dated August 22, 2003. KNIGHTSBRIDGE TANKERS LIMITED SECOND QUARTER 2003 REPORT TO SHAREHOLDERS KNIGHTSBRIDGE TANKERS LIMITED Bermuda, August 22, 2003 To the Shareholders of Knightsbridge Tankers Limited: Enclosed is our report for the second quarter of 2003. The report contains 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, 2003. 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 Hire over the Base Rate. Based upon the determination by the London Tanker Brokers Panel, the spot market related rate totaled $53,186 per day for the period April 1 through June 30, 2003. (The corresponding spot market related rate for the period April 1 through June 30, 2002 was determined to be $13,057). Accordingly, on July 15, 2003, Shell International paid to the Company's vessel owning subsidiaries charter hire at the Base Rate of $10,041,395 plus Additional Hire of $9,380,735 for the period April 1 through June 30, 2003. (For the period April 1 through June 30, 2002, Shell International paid charter hire at the Base Rate of $10,041,395). On July 15, 2003, the Board of Directors of the Company declared a distribution to shareholders of record as of July 25, 2003, payable on or about August 8, 2003, in the amount of $0.65 per share for the period April 1 through June 30, 2003. (For the period April 1 through June 30, 2002, the distribution was $0.45 per share.) The Company has agreed to provide information to shareholders that are United States income tax payers by February 15, 2004, 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, by February 15, 2004, 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 entire year ending December 31, 2003. Please visit our website at www.knightsbridgetankers.com. We are pleased to answer any inquiries that shareholders may have. Our investor relations contacts are: Ola Lorentzon in Oslo, Norway (Tel: 47 23 11 40 00, Fax: 47 23 11 40 44) and Kate Blankenship in Hamilton, Bermuda (Tel: 441 295-0182, Fax: 441 295-3494). The NASDAQ National Market symbol for the Company's Common Shares is "VLCCF". Very truly yours, Ola Lorentzon Chairman 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. The initial term expires in February 2004. The Company has received notice that Shell International has chosen not to renew the charters for the vessels for an additional seven year term. Accordingly, the charters will expire by their terms on or about February 27, 2004, subject to the right of Shell International to extend the charters by up to 90 days by notice no later than November 27, 2003. Under the current 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. Results of Operations - Six Months Ended June 30, 2003 - ------------------------------------------------------ Revenues The Company's revenues consisted of charter hire of $42.5 million for the six months ending June 30, 2003 compared with $20.0 million for the first six months of 2002. This increase is due to the fact that additional hire in the amount of $22.5 million was paid in the first six months of 2003 while no additional was paid in the first six months of 2002. Operating Expenses The Company's operating expenses consist of (i) fees due to the Company's manager, ICB Shipping (Bermuda) Ltd (the "Manager"), (ii) depreciation of the vessels and (iii) administration expenses consisting of 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. Interest income and expense Interest income of $19,555 was earned during the first six months of 2003 compared with $16,745 in the comparable period of 2003, an increase due to increased cash balances during the first six months of 2003. The Company's borrowings under its primary 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 primary credit facility has effectively been fixed at approximately 7.14 %, which resulted in interest expenses of $4.4 million for the first six months of 2003. On January 1, 2001 the Company adopted SFAS No. 133, "Accounting for Derivatives and Hedging Activities", which requires that all derivative instruments be recorded on the balance sheet at their fair value. As the interest rate swap is designated as part of a hedge transaction, changes in the fair value are recorded each period in other comprehensive income. At June 30, 2003 the interest rate swap had a negative value of $9.4 million. A separate statement for consolidated comprehensive income is included in the enclosed financial statements. Liquidity and Capital Resources Total shareholders' equity of the Company at June 30, 2003 was $211.4 million compared to $208.6 million at December 31, 2002. The increase was due to net income of $28.6 million for the period January 1 through June, 2003 less distributions to shareholders during the first half of 2003 of $28.0 million and the recording of the $2.2 million movement in the fair value of the swap in other comprehensive income/loss. The Company's long-term debt as of June 30, 2003 and 2002, consists of $125.4 million borrowed under its credit facility. The balance of the credit facility matures in August 2004. Interest on this balance is payable quarterly in arrears. Currency Exchange Rates The international shipping industry's functional currency is the United States Dollar and virtually all of the Company's 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. KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED BALANCE SHEETS (in U.S. Dollars) ASSETS Current assets June 30, 2003 Dec 31, 2002 - -------------- ------------- ------------ (Unaudited) Cash 391,307 226,215 Charter hire receivable 19,422,130 10,151,740 Prepaid expenses 114,377 16,384 ------------ ------------ Total current assets 19,927,814 10,394,339 Vessels under capital lease, net 328,204,622 337,001,052 Capitalized financing fees and expenses, net 243,566 429,338 ------------ ------------ TOTAL ASSETS 348,376,002 347,824,729 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities - ------------------- Accrued expenses and other current liabilities 2,187,572 2,197,824 ------------ ------------ Total current liabilities 2,187,572 2,197,824 Credit facility 125,397,399 125,397,399 Interest rate swap agreement at fair value 9,392,379 11,590,392 Shareholders' equity - -------------------- Common shares, par value $0.01 per share: Authorized and outstanding 17,100,000 171,000 171,000 Contributed capital surplus account 220,058,506 220,058,506 Retained earnings 561,525 - Accumulated other comprehensive income (9,392,379) (11,590,392) ------------ ------------ Total shareholders' equity 211,398,652 208,639,114 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 348,376,002 347,824,729 ============ ============ KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in U.S. Dollars) Jan 1, 2003 Jan 1, 2002 to June 30, 2003 to June 30, 2002 ---------------- ---------------- Charter hire revenue 42,467,980 19,972,445 Operating expenses: Depreciation of vessels under capital leases 8,796,430 8,796,430 Management fee 375,000 375,000 Administration expenses 51,272 27,220 ------------ ------------ 9,222,702 9,198,650 Net operating income 33,245,278 10,773,795 Interest income 19,555 16,745 Interest expense (4,448,742) (4,409,977) Other financial costs (210,566) (210,430) ------------ ------------ (4,639,753) (4,603,662) Net income 28,605,525 6,170,133 ============ ============ KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED COMPREHENSIVE INCOME (UNAUDITED) (in U.S. Dollars) Jan 1, 2003 Jan 1, 2002 to June 30, 2003 to June 30, 2002 ---------------- ---------------- Net income 28,605,525 6,170,133 Other comprehensive loss Gain/(loss) on derivative cash flow hedging instrument 2,198,013 (556,014) ------------ ------------ Comprehensive income 30,803,538 5,614,119 ============ ============ KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in U.S. Dollars) Jan 1, 2003 Jan 1, 2002 to June 30, 2003 to June 30, 2002 ---------------- ---------------- Cash flows from operating activities - ------------------------------------ Net income 28,605,525 6,170,133 Items to reconcile net income to net cash provided by operating activities: Depreciation 8,796,430 8,796,430 Amortization of capitalized fees and expenses 185,772 185,772 Changes in operating assets and liabilities: Charter hire receivable and prepaid expenses (9,368,383) 420,232 Accrued expenses and other current liabilities (10,252) (19,894) ------------ ------------ Net cash provided by operating activities 28,209,092 15,552,673 Cash flows from financing activities - ------------------------------------ Distribution to shareholders (28,044,000) (15,561,000) ------------ ------------ Net cash used in financing activities (28,044,000) (15,561,000) Net increase (decrease) in cash and cash equivalents 165,092 (8,327) Cash and cash equivalents at beginning of period 226,215 278,268 ------------ ------------ Cash and cash equivalents at end of period 391,307 269,941 ============ ============ KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED) (in U.S. Dollars)
Accumulated Contributed Other Share capital surplus Retained Comprehensive Capital Account Earnings Income Total Balance at December 31, 2001 171,000 238,458,720 - (9,552,504) 229,077,216 Net income - - 12,550,786 - 12,550,786 Other comprehensive loss (2,037,888) (2,037,888) Distribution to shareholders - (18,400,214) (12,550,786) - (30,951,000) - ------------------------------------------------------------------------------------------------- Balance at December 31, 2002 171,000 220,058,506 - (11,590,392) 208,639,114 Net income - - 28,605,525 - 28,605,525 Other comprehensive gain 2,198,013 2,198,013 Distribution to shareholders - - (28,044,000) - (28,044,000) - ------------------------------------------------------------------------------------------------- Balance at June 30, 2003 171,000 220,058,506 561,525 (9,392,379) 211,398,652 ==================================================================================================
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 authorised. Knightsbridge Tankers Limited --------------------------------------------------- (Registrant) Date September 9, 2003 By /s/ Kate Blankenship -------------------- --------------------------------------------------- Kate Blankenship Secretary 01655.0002 #427325 -----END PRIVACY-ENHANCED MESSAGE-----