UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of May, 2002
Knightsbridge Tankers Limited
---------------------------------------------------------------
(Translation of registrant's name into English)
Par-la-Ville Place, 14 Par-la-Ville Road,
Hamilton HM 08, 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
--- ---
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-_______
Item 1. INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached hereto is a copy of the quarterly report of
Knightsbridge Tankers Limited (the "Company") for the period ended March 31,
2002.
Item 2. ADDITIONAL INFORMATION
Royal Dutch Petroleum Company and The Shell Transport and Trading
Company, Public Limited Company file annual reports on Form 20-F (File Nos.
1-3788 and 1-4039) and periodic reports on Form 6-K with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended.
Such annual reports contain the financial statements of the Royal Dutch/Shell
[Logo Omitted]
KNIGHTSBRIDGE TANKERS LIMITED
FIRST QUARTER 2002
REPORT TO SHAREHOLDERS
Knightsbridge Tankers Limited
Registered Office
Par-la-Ville Place, 14 Par-la-Ville Road
Hamilton, Bermuda
Bermuda, May 10, 2002
TO THE SHAREHOLDERS OF KNIGHTSBRIDGE TANKERS LIMITED:
Enclosed is our report for the first quarter of 2002. 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 March 31, 2002.
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 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
$16,327 per day for the period January 1 through March 31, 2002. (The
corresponding spot market related rate for the period January 1 through March
31, 2001, was determined to be $68,506).
Accordingly, on April 15, 2002, Shell International paid to the Company's vessel
owning subsidiaries charter hire at the Base Rate in the aggregate amount of
$9,931,050 for the period January 1 through March 31, 2002. (For the period
January 1 through March 31, 2001, Shell International paid charter hire at the
Base Rate of $9,931,050 plus Additional Hire of $16,171,650).
On April 15, 2002, the Board of Directors of the Company declared a distribution
to shareholders of record as of April 25, 2002, payable on or about May 8, 2002,
in the amount of $0.45 per share for the period January 1 through March 31,
2002. (For the period January 1 through March 31, 2001, the distribution was
$1.39 per share.)
The Company has agreed to provide information to shareholders that are United
States income tax payers by February 15, 2003, so 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,
2002.
Please visit our website at www.knightsbridgetankers.com. We are pleased to
answer any inquiries that shareholders may have. Our investor relations contacts
are: Ola Lorentzon in Oslo, Norway (Tel: 47 23 11 40 00, Fax: 47 23 11 40 44)
and Kate Blankenship in Hamilton, Bermuda (Tel: 441-295-0182,
Fax: 441-295-3494). The NASDAQ National Market symbol for the Company's Common
Shares is "VLCCF".
Very truly yours,
Ola Lorentzon
Chairman and Chief Executive Officer
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.
RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2002
Revenues
The Company's revenues consisted of charter hire of $9.9 million for the quarter
ending March 31, 2002 compared with $26.1 million for the first quarter of 2001.
This decrease is principally due to the fact that no additional hire was paid in
the first quarter of 2002 while additional hire of $16.2 million was paid in the
first quarter of 2001.
Operating Expenses
The Company's operating expenses consist of (i) fees due to the Company's
manager, ICB Shipping (Bermuda) Ltd (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 $7,999 was earned during the three months ended March 31,
2002 compared with $103,138 in the comparable period of 2001, a decrease due to
the decreased cash balances arising from the decreased charter hire received in
the first half of 2002.
The Company's borrowings under its primary 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 primary credit facility has effectively been fixed at
7.14 %, which resulted in interest expenses of $2,189,915 for the three months
ended March 31, 2002.
On January 1, 2001 the Company adopted SFAS No. 133, "Accounting for Derivatives
and Hedging Activities". SFAS No. 133 requires that all derivative instruments
be recorded on the balance sheet at their fair value. Changes in the fair value
of each derivative is recorded each period in current earnings or other
comprehensive income, depending on whether the derivative is designated as part
of a hedge transaction and, if it is, the type of hedge transaction. Upon the
adoption of SFAS No. 133 the Company recorded the fair value of its interest
rate swap which is designated as a hedge against interest paid on the Company's
debt. The amount recorded as a liability was $3,496,905 and an equal charge was
made to other comprehensive income, which is a component of shareholders'
equity. At March 31, 2002 the interest rate swap had a negative value of
$8,035,673. A separate statement for consolidated comprehensive income is
included in the enclosed financial statements.
Liquidity and Capital Resources
Total shareholders' equity of the Company at March 31, 2002 was $225.8 million
compared to $229.1 million at December 31, 2001. The decrease was due to net
income of $3.1 million for the period January 1 through March 31, 2001 less
distribution to shareholders for the first three months of 2002 in the aggregate
amount of $7.9 million and the recording of the fair value of the swap in other
comprehensive income/loss.
The Company's long-term debt as of March 31, 2002 and 2001, consists of $125.4
million borrowed under its credit facility. 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.
KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED BALANCE SHEETS
(in U.S. Dollars)
ASSETS
CURRENT ASSETS MARCH 31, 2002 DECEMBER 31, 2001
- -------------- -------------- -----------------
(Unaudited)
Cash 387,465 278,268
Charter hire receivable 9,931,050 10,515,600
Prepaid expenses 95,493 15,342
----------- -----------
Total current assets 10,414,008 10,809,210
Vessels under capital lease, net 350,195,697 354,593,912
Capitalized financing fees and expenses, net 707,996 800,882
----------- -----------
TOTAL ASSETS 361,317,701 366,204,004
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses and other current liabilities 2,111,451 2,176,885
----------- -----------
Total current liabilities 2,111,451 2,176,885
Credit facility 125,397,399 125,397,399
Interest rate swap agreement at fair value 8,035,673 9,552,504
SHAREHOLDERS' EQUITY
Common shares, par value $0.01 per share:
Authorized and outstanding 17,100,000 171,000 171,000
Contributed capital surplus account 233,637,851 238,458,720
Retained earnings - -
Accumulated other comprehensive income (8,035,673) (9,552,504)
----------- -----------
Total shareholders' equity 225,773,178 229,077,216
----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 361,317,701 366,204,004
=========== ===========
KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in U.S. Dollars)
Jan 1, 2002 Jan 1, 2001
to Mar 31, 2002 to Mar 31, 2001
---------------- ---------------
Charter hire revenue 9,931,050 26,102,700
Operating expenses:
Depreciation of vessels under capital leases 4,398,215 4,398,215
Management fee 187,500 187,500
Administration expenses 13,209 12,711
---------- ----------
4,598,924 4,598,426
Net operating income 5,332,126 21,504,274
Interest income 7,998 103,138
Interest expense (2,189,915) (2,232,453)
Other financial costs (105,078) (105,330)
---------- ----------
(2,286,995) (2,234,645)
Net income 3,045,131 19,269,629
========== ==========
KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED COMPREHENSIVE INCOME (UNAUDITED)
(in U.S. Dollars)
Jan 1, 2002
-Mar 31, 2002
-------------
Net income 3,045,131
Other comprehensive loss
Loss on derivative cash flow hedging instrument (8,035,673)
-----------
Comprehensive income (4,990,542)
===========
KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in U.S. Dollars)
Jan 1, 2002 Jan 1, 2001
to Mar 31, 2002 to Mar 31, 2001
--------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income 3,045,131 19,269,629
Items to reconcile net income to net cash
provided by operating activities:
Depreciation 4,398,215 4,398,215
Amortization of capitalized fees and expenses 92,886 92,886
Changes in operating assets and liabilities:
Charter hire receivable and prepaid expenses 504,399 4,984,244
Accrued expenses and other current liabilities (65,434) (8,439)
---------- ----------
Net cash provided by operating activities 7,975,197 28,736,535
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of loan - -
Distribution to shareholders (7,866,000) (28,728,000)
--------- ----------
Net cash used in financing activities (7,866,000) (28,728,000)
Net increase (decrease) in cash and cash equivalents 109,197 8,535
Cash and cash equivalents at beginning of period 278,268 247,370
--------- ----------
Cash and cash equivalents at end of period 387,465 255,905
========= ==========
KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
(in U.S. Dollars)
Contributed Accumulated
Capital Other
Share Surplus Retained Comprehensive
Capital Account earnings Income Total
Balance at
December 31, 2000 171,000 273,809,543 3,237,745 - 277,218,288
Net income - - 33,915,432 - 33,915,432
Other comprehensive - - - (9,552,504) (9,552,504)
Loss
Distribution
to shareholders - (35,350,823) (37,153,177) - (72,504,000)
- --------------------------------------------------------------------------------
Balance at
December 31, 2001 171,000 238,458,720 - (9,552,504) 229,077,216
Net income - - 3,045,131 - 3,045,131
Other comprehensive
Income 1,516,831 1,516,831
Distribution
to shareholders - (4,820,869) (3,045,131) - (7,866,000)
- --------------------------------------------------------------------------------
Balance at
Mar 31, 2002 171,000 233,637,851 - (8,035,673) 225,773,178
================================================================================
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 authorised.
Knightsbridge Tankers Limited
-------------------------------
(Registrant)
Date May 22, 2002 By /s/ Kate Blankenship
---------------- -------------------------------
Kate Blankenship
Secretary
01655.0002 #325808