Flex LNG reaps $100 million for LNG newbuilds acquisition

Flex LNG, the shipping company controlled by billionaire John Fredriksen, raked in US$100 million, through a private offering, securing funds for the acquisition of Geveran MEGI LNG newbuilds.

According to the company’s statement, its initial placement of 78 million new shares was oversubscribed receiving strong interest from large institutional investors and bringing in NOK 833 million (Approx: $100 million).

Flex LNG also said it will carry out a subsequent offering of 7.2 million new shares valued at an additional NOK 83 million (Approx: $10 million).

The net proceeds will be used as a partial consideration for the acquisition of shipbuilding contracts from its largest shareholder, Geveran Trading, for two MEGI LNG newbuilds being constructed at Daewoo Shipbuilding and Marine Engineering (DSME) with scheduled delivery in the first quarter of 2018.

In a statement unveiling Flex LNG’s plans to purchase the two LNG carriers, the company said it will assume responsibility for the remaining LNG newbuilding installments payable to South Korea’s DSME amounting to about $20.4 million.

The transaction would consolidate all Geveran’s LNG assets and activities in Flex, which would be positioned to capitalize on the expected tightening in the LNG shipping market, and on the expected strong growth in the markets for LNG shipping and FSRUs.

The acquisition of the two shipbuilding contracts would give Flex LNG a uniform fleet of four M-type, Electronically Controlled, Gas Injection (MEGI)-powered vessels.

 

LNG World News Staff

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