Frontline plc completed a two‑part fleet renewal on January 8, 2026, selling eight of its oldest first‑generation ECO Very Large Crude Carriers (VLCCs) built between 2015 and 2016 for $831.5 million. After settling the vessels’ existing debt, the transaction is expected to generate net cash proceeds of roughly $486 million and a gain of $217.4 million to $226.7 million, depending on delivery timing.
In parallel, Frontline secured nine new‑building contracts for latest‑generation, scrubber‑fitted ECO VLCCs from an affiliate of its largest shareholder, Hemen Holding Limited. The aggregate purchase price is $1.224 billion. Six vessels are under construction at Hengli Shipyard and three at Dalian Shipyard, with seven slated for delivery in 2026 beginning in the third quarter and the remaining two arriving in early 2027.
The combined transactions leave Frontline with a fleet of 81 vessels—42 VLCCs, 21 Suezmaxes and 18 LR2/Aframax tankers—shifting the company toward a younger, more fuel‑efficient roster. The move strengthens Frontline’s spot‑market exposure, preserves its competitive edge in a supply‑constrained environment, and provides a clear path to maintain a low‑cost fleet without adding new supply to the market.
Financially, the sale delivers a substantial cash infusion that will be used to pay down long‑term debt and fund the newbuildings, slightly increasing leverage but keeping the debt‑to‑equity ratio within the company’s target range. The new vessels are expected to reduce operating costs through lower fuel consumption and maintenance expenses, translating into higher operating margins over the next five years.
CEO Lars H. Barstad highlighted that the transactions “enable Frontline to renew its fleet by replacing 10‑year‑old first‑generation ECO vessels with latest‑generation, scrubber‑fitted ECO vessels at very firm pricing.” Analysts noted that the sale price exceeded generic market quotes while the new‑building price aligned with asset valuations, explaining the positive market reaction observed on January 7, 2026, when the stock surged in anticipation of the announcement.
The fleet renewal aligns with broader industry trends toward environmental compliance and operational efficiency. Scrubber‑fitted VLCCs meet tightening IMO 2020 and forthcoming IMO 2030 regulations, while the newer hull designs improve fuel economy by up to 10 %. Headwinds include potential freight rate volatility and geopolitical risks that could affect charter demand, but the modern fleet positions Frontline to capture upside in a market that rewards low‑cost, high‑efficiency vessels.
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