FBR Downgrades World’s Largest Tanker Owner, Chapter 11 Possible

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November 24, 2011

(Dow Jones) FBR slashes its price target on Frontline (FRO) to $1.50 from $5.50 as it downgrades the oil-tanker operator to underperform in the wake of the company’s 3Q report, which included a dividend suspension and “management’s concession that a restructuring and additional capital will be necessary in 1H absent a material recovery in the market.” FBR isn’t “ruling out the risk of a restructuring via Chapter 11, as we saw with General Maritime (GMRRQ) last week.” FRO is down another 14% today to $2.64 after Tuesday’s 41% tumble, putting the week’s loss at 54% and the year’s at 90%.

– by Kevin Kingsbury, Dow Jones Newswires

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