-----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, Pzhk5rBkqvt23D3Y6j3OtKl5SjXqD3l5VIqh2FQozmSC9jLGNED+8afc5u9yHnY5 Wegcddi/Fo1ncCn1FMbLiw== 0000919574-99-001232.txt : 19991103 0000919574-99-001232.hdr.sgml : 19991103 ACCESSION NUMBER: 0000919574-99-001232 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KNIGHTSBRIDGE TANKERS LTD CENTRAL INDEX KEY: 0001029145 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: SEC FILE NUMBER: 000-29106 FILM NUMBER: 99739636 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 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 September, 1999 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 INFORMATION CONTAINED IN THIS FORM 6-K REPORT Set forth herein is a copy of the report to shareholders for the quarter ended September 30, 1999 containing certain unaudited financial information and a Management's Discussion and Analysis of Financial Condition and Results. 2 KNIGHTSBRIDGE TANKERS LIMITED Stockholm, October 25, 1999 TO THE SHAREHOLDERS OF KNIGHTSBRIDGE TANKERS LIMITED: Enclosed is our third report for year 1999. 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 September 30, 1999. 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 the spot market related rate, after inclusion of the component for operating expenses, totaled $ 17,498 per day for the period July 1 through September 30, 1999. (The corresponding spot market related rate for the period July 1 through September 30, 1998, was determined to be $35,585.) Accordingly, on October 15, 1998, Shell International paid to the Company's vessel owning subsidiaries charter hire at the base rate in the aggregate amount of $ 10,151,740 for the period July 1 through September 30, 1999. (For the period July 1 through September 30, 1998, Shell International paid charter hire at the base rate in the aggregate amount of $ 10,151,740 and additional hire in the aggregate amount of $ 1,387,360.) On October 15, 1999, the Board of Directors of the Company declared a distribution to share-holders of record as of October 26, 1999, payable on or about November 10, 1999, in the amount of $ 0.45 per share for the period July 1 through September 30, 1999. (For the period July 1 through September 30, 1998, the distribution was $ 0.53 per share.) The Company has agreed to provide information to shareholders that are United States income tax payers by February 15, 2000, so 3 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 entire year ending December 31, 1999. We are pleased to answer any inquiries that shareholders may have. Our investor relations contact is: Karl Molander, the Company's Chief Financial Officer, 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, Ola Lorentzon Vice Chairman and Chief Executive Officer Knightsbridge Tankers Limited Knightsbridge Tankers Limited Investor Relations Registered Office P. O. Box 7007, S-103 86, Cedar House, 41 Cedar Avenue Stockholm, Sweden Hamilton HM 12, Bermuda Telephone: Int + 46-8-613 30 30 Telefax: Int + 46-8-613 99 09 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 - 9 MONTHS 1999 REVENUES The Company's revenues consist of charter hire of $ 30.1 million for the period commencing January 1, 1999 and ending September 30, 1999. (The charter hire for the same period last year was 34.9.) 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) 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 $ 83,459 was earned during the period. In addition the Company received interest income of $ 257,845 on the principal balance of the receivable note from Shell International. 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 $ 6,959,688 for the period. LIQUIDITY AND CAPITAL RESOURCES Total shareholders equity of the Company at September 30, 1999, was $ 278.5 million compared to $ 292.2 million at December 31, 1998. The decrease was due to net income for the period January 1 through September 30, 1999, in the amount of $ 9.4 million less distribution to shareholders for the fourth quarter of 1998 and for the first half 1999 in the aggregate amount of $ 23.1 million. The Company's long-term debt as of September 30, 1999, consists of the principal amounts borrowed under its credit facility in the aggregate amount of $ 128.8 million. Of this amount, $ 3.4 million represents the "Amortizing Loan" which is payable in two 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 Loan. 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. 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. CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in U.S. Dollars) ASSETS CURRENT ASSETS SEP 30, 1999 DEC 31, 1998 Cash 32,710 315,223 Current installments of notes receivable 3,363,077 6,726,152 Charter hire receivable 10,198,566 10,268,805 Prepaid expenses 49,000 14,000 ----------- ----------- TOTAL CURRENT ASSETS 13,643,353 17,324,180 Notes receivable - 1,681,538 Vessels under capital lease, less accumulated depreciation of $45,643,698 and $32,449,053 394,177,846 407,372,491 Capitalized financing fees and expenses, less accumulated amortization of $963,949 and $685,291 1,636,855 1,915,513 ----------- ----------- TOTAL ASSETS 409,458,054 428,293,722 =========== =========== LIABILITIES AND SHAREHOLDERS EQUITY CURRENT LIABILITIES Accrued expenses and other current liabilities 2,230,328 2,300,568 Current installments of credit facility 3,363,076 6,726,152 ----------- ---------- TOTAL CURRENT LIABILITIES 5,593,404 9,026,720 Credit facility 125,397,399 127,078,936 SHAREHOLDERS EQUITY Common shares, par value $0.01 per share: Authorized and outstanding 17,100,000 171,000 171,000 Contributed capital surplus account 278,296,251 292,017,066 ----------- ----------- TOTAL SHAREHOLDERS EQUITY 278,467,251 292,188,066 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 409,458,054 428,293,722 =========== =========== CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in U.S. Dollars) JAN 1, 1999 JAN 1, 1998 -SEP 30, 1999 -SEP 30, 1998 CHARTER HIRE REVENUE 30,124,185 34,887,645 OPERATING EXPENSES: Depreciation of vessels under capital leases -13,194,645 -13,194,645 Management fee -562,500 -562,500 Administration expenses -68,314 -68,320 ------------- ------------- OPERATING INCOME 16,298,726 21,062,180 Interest income 341,304 709,718 Interest expense -6,959,688 -7,306,532 Other financial costs -316,158 -316,158 ------------ ------------ NET INCOME 9,364,184 14,149,208 ============ ============ CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in U.S. Dollars) JAN 1, 1999 JAN 1, 1998 CASH FLOWS FROM OPERATING ACTIVITIES -SEP 30, 1999 -SEP 30, 1998 Net Income 9,364,184 14,149,208 ITEMS TO RECONCILE NET INCOME TO NET CASH provided by operating activities: Depreciation 13,194,645 13,194,645 Amortization of capitalized fees and expenses 278,658 278,658 CHANGES IN OPERATING ASSETS AND LIABILITIES: Receivables 5,079,854 8,779,634 Accrued expenses and other current liabilities -70,240 -32,587 ----------- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES 27,847,101 36,369,558 CASH FLOWS FROM FINANCING ACTIVITIES Repayments of loan -5,044,614 -5,044,614 Distribution to shareholders -23,085,000 -31,293,000 ----------- ----------- Net cash used in financing activities -28,129,614 -36,337,614 Net increase/decrease in cash and cash equivalents -282,513 31,944 Cash and cash equivalents at beginning of period 315,223 217,374 ---------- ----------- Cash and cash equivalents at end of period 32,710 249,318 ========== =========== CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY (UNAUDITED) (in U.S. Dollars) ADDITIONAL CONTRIBUTED SHARE PAID-IN CAPITAL RETAINED CAPITAL SURPLUS CAPITAL ACCOUNT EARNINGS TOTAL BALANCE AT Dec 31, 1997 171,000 314,987,247 - - 315,158,247 Reallocation Share Premium - -314,987,247 314,987,247 - - Net income - - - 17,385,820 17,385,820 Distribution to shareholders - - -22,970,180 -17,385,820 -40,356,000 BALANCE AT Dec 31, 1998 171,000 - 292,017,067 - 292,188,067 Net income - - -9,364,184 9,364,184 Distribution to shareholders - - -13,720,816 -9,364,184 -23,085,000 BALANCE AT Sep 30, 1999 171,000 - 278,296,251 - 278,467,251 ============================================================================== 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: November 2, 1999 By: /s/ Ola Loventzon ___________________ Ola Lorentzon Vice Chairman and Chief Executive Officer 12 01655002.ag9 -----END PRIVACY-ENHANCED MESSAGE-----