Business Context and Reporting Period
This Form 6-K filing by Ship Finance International Limited (SFL) covers the month of March 2009. The report primarily discloses the termination of an acquisition agreement announced in a press release dated February 11, 2009. SFL is a major ship owning company listed on the NYSE with a fleet of 68 vessels, including crude oil tankers, container vessels, and drilling units, most of which are employed on long-term charters.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures for the reporting period. The only financial data disclosed relates to the terminated transaction:
- Original Planned Investment: Approximately $160 million total ($80 million per vessel).
- Committed Financing: $130 million.
- Estimated Equity Investment: Approximately $30 million.
- Cash Impact: No capital was paid by SFL as the investment was payable upon delivery, which did not occur.
Material Changes
The material change reported is the termination of an agreement to acquire two newbuilding Capesize dry-bulk vessels from Golden Ocean Group Limited. The agreement, originally announced in February 2007, was terminated due to delayed delivery and anticipated non-compliance with the deal's terms and conditions. Consequently, the planned expansion of the dry-bulk fleet segment via this specific transaction will not proceed.
Guidance, Outlook, and Risks
The filing includes a cautionary statement regarding forward-looking statements, noting that actual results may differ due to significant uncertainties. Key risks and contingencies identified include:
- Strength of world economies and currencies.
- Fluctuations in charter hire rates and vessel values.
- Changes in demand in the tanker market driven by OPEC production levels and global oil consumption.
- Operating expense volatility, including bunker prices, dry-docking, and insurance costs.
- Regulatory changes and potential liability from litigation.
- Political conditions and potential disruption of shipping routes.
Management commentary is limited to the explanation of the deal termination and the confirmation that no funds were disbursed.
Investor Verification Checklist
- Verify the current status of the Company's fleet expansion plans following the termination of the Golden Ocean deal.
- Confirm that no financial penalties or costs were incurred related to the termination of the $160 million agreement.
- Review subsequent filings for updates on the Company's liquidity and debt levels, as this filing does not contain current balance sheet data.
- Monitor market conditions for dry-bulk vessels to assess the strategic impact of not acquiring the two Capesize vessels.