John Fredriksen’s Flex LNG has completed a sale and leaseback deal with Hyundai Glovis for two LNG carriers.
Under the transaction, Hyundai Glovis paid $300m and provided a seller’s credit of $120m for 2018-built LNG carrier pair Flex Endeavour and Flex Enterprise. It will time charter the vessels back to Flex LNG for a period of ten years. Flex LNG has options to acquire the vessels during the charters, and the right to acquire the vessels at the end of the charter for a total of $150m, net of the $120m seller’s credit.
Additionally, Flex LNG has also closed and refinanced a loan connected to the two vessels and another LNG carrier Flex Ranger. The vessel has been refinanced with a new $100m bank loan divided into a $50m term loan and a $50m revolving facility. The tenor is 5 years and the age adjusted repayment profile is 19 years.
Flex Endeavour and Flex Enterprise were together with Flex Ranger, financed under a $315m term loan facility due 2023.
“We are very satisfied with the successful closing of the Glovis SCB according to plan, and highly appreciate the close and good working relationship with Hyundai Glovis throughout this process. In connection with the Glovis SCB we also decided to improve our capital structure by refinancing Flex Ranger at better terms and conditions. The $50m revolving facility under the new loan will also enable us to optimize the excess cash resulting from the Glovis SCB, which released in excess of $100m to us. The two transactions improve our financial flexibility to return earnings to our shareholders when market conditions improve,” said Øystein Kalleklev, CEO of Flex LNG Management.