Flex LNG has entered into a sale-charterback transaction with Hyundai Glovis Co. Ltd. for the vessels Flex Endeavour and Flex Enterprise.
Under the agreement, Flex LNG will sell the vessels for a gross consideration of US$420 million, with a net consideration of US$300 million adjusted for a non-amortising and non-interest bearing seller’s credit of US$120 million in total.
Flex Endeavour and Flex Enterprise will be charted back on a time-charter basis to subsidiaries of Flex LNG for a period of ten years. The company will have options to acquire the vessels during the term of the time-charters. At the end of the ten-year charter period, Flex LNG will have the right to acquire the vessels and Hyundai Glovis will have the right to sell the vessels back to Flex LNG for a total consideration of US$150 million, net of the US$120 million seller’s credit. The existing ship management agreements will be novated to Hyundai Glovis, securing continuation of the ship management services.
The transaction with Hyundai Glovis remains subject to customary closing conditions and is expected to close in the third quarter of 2019. In connection with the transaction, the existing mortgage loans for the two vessels totalling approximately US$194 million will be prepaid and the transaction will thus significantly increase our liquidity.
Furthermore, Flex LNG is also pleased to inform that the US$250 million bank facility agreement for Flex Constellation and Flex Courageous has now been signed. The funds will be available for drawdown in connection with the scheduled deliveries in June and August, respectively.
Øystein M. Kalleklev, Chief Executive Officer, commented:"We are pleased to announce a partnership with Hyundai Glovis, a top-tier global logistics and distribution company. The transaction secures us long-term financing at attractive terms and will significantly boost our cash position by more than US$100 million. 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."
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/30042019/flex-lng-signs-financing-for-four-lng-carriers/