Flex LNG looking to buy two Geveran MEGI LNG newbuilds

For illustration only (Image: Flex LNG)

Flex LNG, the shipping company controlled by billionaire John Fredriksen, plans to purchase two liquefied natural gas (LNG) carriers from its largest shareholder, Geveran Trading.

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, the company said in a statement on Thursday.

Furthermore, 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, it said.

The two LNG carriers are to be built at South Korea’s Daewoo Shipbuilding and Marine Engineering. The vessels are expected to be delivered in the first quarter 0f 2018.

Flex LNG plans to partly fund the purchase by issuing 78 million new shares in the company to Geveran. The remaining part of the consideration will be settled by a seller’s credit structured as a revolving credit facility.

The company will also assume responsibility for the remaining LNG newbuilding instalments payable to South Korea’s DSME amounting to about $20.4 million.

In addition, Flex LNG is contemplating a $100 million offering of new shares against cash payment. If completed, the offering implies an issue of about 147–150 million new shares in total.

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