LNG carrier owner Flex LNG has entered into a sale-charterback transaction with South Korean logistics company Hyundai Glovis for two large LNG carriers.
The vessels in question are the 2018-built Flex Endeavour and Flex Enterprise. Both units were built by South Korea’s Daewoo Shipbuilding and Marine Engineering.
Under the agreement, Flex LNG will sell the vessels for a gross consideration of USD 420 million, with a net consideration of USD 300 million adjusted for a non-amortizing and non-interest bearing seller’s credit of USD 120 million in total.
The transaction with Hyundai Glovis remains subject to customary closing conditions and is expected to close in the third quarter of 2019.
The 173,400 cbm Flex Endeavour and Flex Enterprise will be chartered 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. Additionally, Flex LNG will have the right to acquire the vessels at the end of the ten-year charter period.
The company also disclosed that the USD 250 million bank facility agreement for newbuilding duo Flex Constellation and Flex Courageous was officially signed.
“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 USD 100 million,” Øystein M. Kalleklev, Chief Executive Officer, commented.
“With the two financings we are very well capitalized to take delivery of our remaining newbuildings. Cash break-even levels of less than USD 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.”