Oil tanker owner Frontline said it is carrying out a series of VLCC sales and purchases, selling eight built in 2015 and 2016 and agreeing to buy nine newbuildings in China.

The company said the total sale price for its eight-generation eco VLCCs was $813.5 million and the delivery timeline is expected to be in the first quarter. After debt repayment, it is expected to a cash receipt of about $486 million, and it expects a gain of between $217 million and $226 million in the first quarter based on the dates.

Frontline said the vessels it has agreed to buy are latest-generation eco VLCCs, six of which are under construction at Hengli and three at Dalian. The sale and purchase agreements were made with counterparties related to Hemen Holdings Ltd., the investment company owned by Frontline's largest shareholder, John Fredriks.

Seven vessels are expected to be delivered this year starting in the third quarter, and the remaining two are expected to be delivered in the first and second quarters of 027.

Frontline said the vessels will be financed by a combination of cash and long-term debt, and the agreements are subject to customary closing conditions.

"The two transactions allow Frontline to replace its 10-year-old, first-generation eco vessels with latest generation, scrubber-fitted eco vessels at very attractive, thus achieving a renewal of its fleet," said Lars H. Barstad, CEO of Frontline Management. "This is in line with our strategy of operating one of the modern, cost-effective and fuel-efficient fleets in the market."

The orderbook for VLCCs remains relatively high in relation to the fleet, but still below the delivery rate required to replace an aging fleet, suggesting a tight supply and demand situation in the next few years due to scarce yard slots.

"The acquisition also supports increased presence in the VLCC market without increasing the total vessel supply. The delivery timeline is very attractive and comes at a time when newbuilding orders are usually considered impossible to secure. this transaction, Frontline has achieved tangible progress in improving fuel efficiency and reducing carbon emissions," the company said.

The company said that, following the transactions, Frontlines fleet will consist of 81 vessels, including 42 VLCCs, 21 Suezmax tankers and 18 LR2/Aframa tankers.