Flex LNG Ltd has filed a registration form with the US Securities and Exchange Commission to have its shares listed on the NYSE. No new securities will be issued for the company, whose shares are currently traded on the Oslo stock exchange under the ticker symbol FLNG.
Flex LNG is part of John Fredriksen’s Seatankers group of companies. The filing comes as Flex LNG is set to more than treble its operating fleet of four LNG carriers by 2021. It has agreed to acquire from affiliates of Geveran Trading Co Limited – a holding company controlled by Mr Fredriksen – nine LNG newbuilding vessels under construction at South Korea’s Daewoo Shipbuilding and Marine Engineering (DSME) and Hyundai Samho Heavy Industries for a total purchase price of US$1.65Bn. The newbuilding LNG carriers are expected to be delivered to between Q2 2019 and Q2 2021.
Flex LNG has inked two financing deals to finance its growth. One agreement calls for a sale-charter back transaction with Hyundai Glovis Co for the vessels Flex Endeavour and Flex Enterprise, two LNG carriers built in 2018 with capacities of 173,400 m3.
Under the agreement, Flex LNG will sell the vessels to Hyundai Glovis for US$300M and a non-amortising and non-interest-bearing seller's credit of US$120M for a total consideration of US$420M.
Subsidiaries of Flex LNG will time charter back Flex Endeavour and Flex Enterprise for 10 years. During the time charters, Flex LNG will have options to acquire the vessels. At the end of the 10-year charter period, Flex LNG will have the right to acquire the vessels from Hyundai Glovis for a total consideration of US$150M, net of the US$120M seller's credit. The existing ship management agreements with Hyundai Glovis will be replaced with new ones, securing continuation of its ship management services.
Pending approval, the transaction with Hyundai Glovis is expected to close in Q3 2019. In connection with the transaction, the existing mortgage loans for the two vessels totalling approximately US$194M will be prepaid.
Under a second deal, Flex LNG has signed a US$250M bank facility agreement for Flex Constellation and Flex Courageous. The two 173,400 m3 LNG carriers are under construction at DSME, with deliveries set for June and August, respectively. Flex LNG chief executive Øystein M Kalleklev, said, "With the two financings we are very well capitalised to take delivery of our remaining newbuildings. Cash break-even levels of less than US$50,000 on average for these two financings demonstrate our ability to raise competitive and long-term financing from a diverse set of funding sources."
The newbuilds will either have two-stroke, high-pressure ME-GI engines from MAN Energy Solutions or low-pressure X-DF engines from WinGD, providing an estimated 30% lower fuel consumption than tri- or dual-fuel diesel-electric vessels. The X-DF newbuildings will be fitted with selective catalytic reduction technology to comply with IMO Tier III regulations both in gas and liquid mode, giving them high trading flexibility.