$120-million loan re-structuring through the Chase Manhattan Bank N.A.

The company has arranged a secured syndicated term loan for that amount, fully underwritten by the bank.

LOF said yesterday that the loan will take out all existing debt and will finance instalments on the newbuilding of double-hull suezmax vessels due to be delivered in May and December 1995.

Repayment of two thirds of the principal will be made semiannually over eight years on a straight line basis. The remaining one third of the principal will be repayable at the end of eight years as a balloon payment.

The loan is to be secured by mortgages over the four existing vessels in the fleet and by the two newbuildings.

Interest will be payable at 1.00 percent or 1.125 percent above LIBOR, dependent upon the proportion of principal that is secured by projected cash flow from time charters. Initially, the margin will be 1.125 percent, based upon existing time charter coverage.

LOF at present, has in place two loans secured on the four existing vessels with remaining terms of approximately three and six years. Additionally, there is a loan facility in place secured by the two newbuildings with an eight-year term. Interest on these loans is payable at 1.00 percent to 1.375 percent above LIBOR.

The company said that the benefits of the new loan include extended debt maturities more closely matching the vessels' lives with consequent reduction in debt service requirements.

There is also a reduced interest rate margin with the potential for further reductions in margin upon securing additional time charters. And finally, the fleet is consolidated under one security package.

The principal activity of the group is shipping, operating in worldwide crude oil and oil products trades. The company owns three 61,000 dwt tankers, two built in 1982 and one in 1983, which operate in worldwide crude oil and oil products trades. There is also a 150,000 dwt tanker, built in Japan and delivered in 1993.

LOF, whose end of financial year was March 31, reported in February a third quarter net income to the end of December of $2,239,000 and a nine month profit of $5,990,000. Those figures represent improvements over the previous year's comparable periods of nearly 180 percent and almost 155 percent, respectively.

The firm reported at that time that they were looking forward in 1995 to increasing tanker demand combined with reduced supply and increased capacity utilisation.