The Norwegian tanker owner is set to recover US$2.3M in repair costs and will gain US$3.7M for lost earnings from hire cover insurance
Frontline’s filings with the US Securities and Exchange Commission (SEC) put the total cost of repairs and related services from the incident at US$2.3M which excludes amounts paid directly by insurers. The company said it expects the full amount to be recovered under their insurance policies.
The LR2 tanker Front Altair suffered an explosion when traversing the Strait of Hormuz in the Middle East Gulf in 2019 during a protracted series of tit-for-tat measures involving tanker seizures and a diplomatic standoff between the US, UK, Iran, Russia and other states that affected commercial shipping in the region.
There was no ensuing oil spill and the 23 crew members on board were unharmed and later rescued by a cargo vessel. Front Altair remained afloat and repairs were completed in November 2019.
In addition, Frontline said it has recovered US$3.7M under its loss of hire insurance adding that the incident has had a material impact on the company’s cash flow. A further US$0.6M gain was recognised in relation to the company settling miscellaneous claims.
Frontline, controlled by John Fredriksen, operates a fleet of 24 VLCCs, 28 Suezmax tankers and 20 Aframaxes. In September 2019, it opted to acquire up to 14 Suezmax tankers from commodity trader Trafigura in exchange for 8.5% of Frontline shares.
This week, another of Mr Fredriksen’s companies, Geveran Trading Co Limited has raised its stake in LNG shipowner Flex LNG to control 45.61% of the shares.