From the FRO presentation:
In February 2006 Ship Finance entered into a total return bond swap line with Fortis
Bank. The total return swap is for a term of twelve months and will facilitate the
buyback of its 8.5% senior notes in the amount of $50 million. As of today the bank
has acquired bonds under this facility for $48.6 million with par value $51.5 million
The contracts don't matter. They are signed by the same people for FRO who also work and sign at SFL. Therefore, the contracts are meaningless and easily changed. You saw the problem at the prior earnings presentation. When the execs spoke for FRO, they had much to talk about regarding the HeavyLift conversion. When the changed their clothes, and spoke at the SFL meeting, they spoke gibberish.
Funny, but SFL owns the ships and is the lessor. SFL should have been speaking the details and how they maximized shareholder values. Instead, it was FRO. In other words, SFL is the personal bank of FRO. Those contracts are meaningless as shown by the HeavyLift presentations.
Wall Street understands this and is not rewarding SFL for its asset and lease values because they see that SFL is here to serve JF, not SFL shareholders.
<<< Also, according to my interpretation of the contracts, FRO is on the hook for payments every month, even while this conversion is being done, am I wrong here?? >>>
Whoa!!! You have access to the contracts??? Can you direct me to the document, site, or location of these contracts? I would very much like to review the provisions of same.
I have reviewed all of SFL's public documents and presentations and I haven't seen them. Nor have I ever read anything regarding the specific provisions of the contracts.
What specific language did you read in the contracts that provides that FRO will cover the SH conversion costs as well as continue to make lease payments to SFL while the SHs are being converted?
1. enlarge fleet
2. enlarge customer base
3. enlarge asset base
This takes time.
As for demanding that FRO appoint different people to sit in the SFL chairs from those in the FRO chairs in order to achieve real independence, isn't that what is done in all those independent BODs that supposedly supervise the managements of most corporations independently .... ????? .... Oh wait aminute ... are we talking rality ??? or theory ????
I'm sorry rffirefly, I don't agree. I have owned this stock as long, or longer, than you. When FRO spun out SFL, it should have installed independent management. Ownership, and its influence, is another story. This is an ethically wrong structure. Your presentation is also awful weak. The bulk of this company is spun out. Why do I stay with SFL? It is only recently that I have become concerned that SFL management is not maximizing its value. You and others should be likewise concerned. It is only recently that my concern is that FRO is focused on sucking SFL value onto its financial sheets. I'd like to see all this changed and SFL permitted to blossom. Don't you?
canucanoe1, hopefully I don't incite the wrath of the board, but I just have a question for you. You state: <What is sad is that the SFL owners can't tell us the details because they also work for FRO.> Well, maybe, but most of us who have owned the stock for awhile realized that there would probably not be clear division until a complete spin off. Buying SFL (or not selling it after receiving it from FRO on the spin off) would indicate a recognition and acceptance of that fact. You always have the option not to buy. Sooo, I chose to purchase (and keep) because I looked at the numbers, read the propoganda (:-)) and have knowledge of the contracts between SFL and FRO (which have been dissected in detail here on the board, with some who had knowledge of some of financial workings of the shipping industry). I believe in mgmt, so I stick with them (although much more heavily weighed to SFL than FRO these days). I have read many of your posts. I am trying to understand why you stay with SFL? You don't seem to be very happy with them. Even if you got the first spin off at over 20, the div payout should have you in the black by this qtr. So what really gives?
Heinz- you have been posting so long on this board you are starting to think like JF! An SFL buyback is a stroke of genius, especially if he can juice it with GMR plunder, then spin it out in a weak quarter with some retained earnings in the midst of a hurricane.
A Nordic Epic if I ever heard one! My hats off to you,
No depth on your part! lol!
hmmmm.... risk management.
You mean like most all of SFL's leases are with one customer?
This customer tells SFL when to change the lease and how?
You just fling words, see what sticks!!!
Then run after being asked to explain.
I thought adults grew out of this when they stopped squeezing pimples!!!!!