Flex LNG to buy two X-DF newbuildings for $368m

Oslo-listed Flex LNG, the shipping company controlled by billionaire John Fredriksen, said it entered a deal on Monday to buy two 174,000-cbm X-DF LNG carrier newbuildings under construction at South Korea’s Hyundai Heavy Industries.

Flexh LNG said it in its first-quarter report it would buy the vessels from an affiliate of Geveran for an “attractive” price of $184 million for each carrier which includes building supervision.

“Payment terms are favorable with 20 percent of amount due following signing of such agreement while remaining 80 percent is due at delivery,” it said.

Hence seller is funding part of pre-delivery capex which illustrate commitment and support of the largest shareholder, the shipping company added.

The newbuildings equipped with two stroke slow speed machinery with low pressure gas injection are scheduled to be delivered from Hyundai Heavy mid-2020.

New CEO as loss grows

Flex LNG reported a quarterly loss of $ 1.8 million compared to a net loss in the first quarter of 2017 of $ 1 million.

The company said this was due to the weak utilization of its newbuild LNG carrier Flex Enterprise.

To remind, Flex LNG took delivery of its first LNG newbuildings, the Flex Endeavour and the Flex Enterprise, in January.

Flex Endeavour started it’s time charter to German’s Uniper while Flex Enterprise was operating in the spot market.

During the first quarter, Flex LNG generated revenues of $15.1 million compared to $1.3 million in the year before.

Additionally, Jonathan Cook, Chief Executive Officer of Flex LNG, decided on May 28 to resign from his position to pursue other interests, the company said.

Flex LNG’s board has decided to appoint member Marius Hermansen as interim chief executive and will “actively pursue recruitment process of a permanent CEO”, it said.

The company has also hired Marius Foss as head of commercial. He comes from a  similar role at Golar LNG.

Sale-leaseback of Flex Rainbow

Flex LNG said it received credit approval on Monday for a sale leaseback of the company’s LNG carrier newbuilding Flex Rainbow with an Asian Lessor based on term sheet signed by the parties in March.

The sale price under the lease is about 75 percent of the relevant ship building price for Flex Rainbow and where the remaining 25 percent represent the advance hire for the ten year lease period, the company said.

“This lease enables the company to grow organically based on its existing paid-in equity by the acquisition of two additional high specification LNGC newbuildings at very attractive terms and conditions,” Øystein M Kalleklev, Flex LNG’s finace head said.

“The market for LNG transportation is cyclically recovering from lows experienced beginning of first quarter and we remain very confident about the long-term structural prospects for this market and are thus positioning for this up-turn with this accretive fleet expansion,” he added.

LNG World News Staff