Flex LNG - Finalize $175 million lease financing for Flex Courageous

Rhea-AI Summary

Flex LNG has successfully completed a $175 million JOLCO lease financing for its vessel Flex Courageous, generating $42 million in net proceeds and extending debt maturity to 2035. The refinancing, which reduces debt cost by approximately 1.5% annually, is part of the company's Balance Sheet Optimization Program 3.0. This marks the first of three planned vessel refinancings, with Flex Resolute and Flex Constellation scheduled for the second half of 2025. The combined refinancing efforts are expected to generate $120 million in net proceeds. Flex LNG reported a strong cash position of $410 million at the end of Q1-2025, and the company's fleet consists of thirteen LNG carriers equipped with modern two-stroke propulsion technology.

Positive

• Generated $42 million in net proceeds from the Flex Courageous refinancing
• Debt maturity extended to 2035, providing long-term financial stability
• Cost of debt reduced by approximately 1.5% per year
• Strong liquidity position with $410 million cash balance at Q1-2025
• Secured up to 37 years of combined contract backlog across three vessels
• Expected additional $120 million in net proceeds from upcoming refinancings

Negative

• None.

Insights

Maritime Finance Specialist

Flex LNG's $175M refinancing cuts debt costs 1.5%, extends maturity to 2035, and generates $42M in proceeds, strengthening financial position.

The completion of the $175 million JOLCO lease financing for Flex Courageous represents a significant financial win for Flex LNG. This transaction's $42 million in net proceeds immediately strengthens the company's already robust liquidity position of $410 million reported at Q1-2025. But the benefits extend well beyond the immediate cash infusion.

The ~1.5% annual reduction in debt cost is substantial in the capital-intensive shipping industry and will drive meaningful improvement in cash flow and profitability over the loan term. For perspective, on a $175 million facility, this represents approximately $2.6 million in annual interest savings - a direct boost to the bottom line.

The maturity extension to 2035 significantly reduces refinancing risk and aligns debt obligations with the vessel's newly secured charter backlog. This strategic sequencing - first securing long-term employment for the vessel, then refinancing against that contracted revenue stream - demonstrates management's disciplined approach to capital structure optimization.

As the first of three planned vessel refinancings under the Balance Sheet Optimization Program 3.0, this transaction sets a positive precedent for the upcoming Flex Resolute and Flex Constellation refinancings. With all three refinancings expected to generate $120 million in total net proceeds, Flex LNG is executing a comprehensive strategy to enhance financial flexibility while reducing interest burden and extending debt maturities.

The successful financing amid the backdrop of 37 years of combined new contract backlog across three vessels reflects strong lender confidence in Flex LNG's business model and highlights the competitive advantage of its modern, efficient fleet in securing long-term customer commitments.

HAMILTON, Bermuda, June 2, 2025 /PRNewswire/ -- Flex LNG Ltd. ("Flex LNG" or the "Company") (NYSE: FLNG) (OSE: FLNG) is pleased to announce the signing and successful completion of the $175 million JOLCO lease financing for the vessel Flex Courageous. The refinancing generated net proceeds of approximately $42 million, extends debt maturity to 2035 and will significantly reduce the cost of debt by ~1.5% p.a.

The refinancing of Flex Courageous follows the announcement of up to 10 years of additional backlog for the vessel. This JOLCO lease marks the first of three planned vessel refinancings under the Balance Sheet Optimization Program 3.0, introduced in the Q1-2025 presentation after securing up to 37 years of combined contract backlog across the three vessels.

The Company remains on track to complete the refinancing of Flex Resolute and Flex Constellation in the second half of 2025. The combined refinancing efforts are expected to release $120 million in net proceeds, while also extending debt maturities and reducing the overall cost of debt.

At the end of Q1-2025, Flex LNG held a cash balance of $410 million. The proceeds from this transaction further support the Company's strong liquidity position, financial flexibility at highly attractive terms and supported by the substantial charter backlog.

Knut Traaholt, CFO of Flex LNG Management AS, commented:

"We are pleased to have completed our first refinancing of 2025 at very attractive terms. We sincerely appreciate the continued trust and support from our banking partners and lease providers. With this transaction completed, we now turn our attention to the planned refinancings of Flex Resolute and Flex Constellation, continuing our efforts to further strengthen Flex LNG's financial platform."

For further information, please contact:

Mr. Knut Traaholt, Chief Financial Officer of Flex LNG Management AS
Telephone: +47 23 11 40 00
Email: ir@flexlng.com 

About FLEX LNG

Flex LNG is a shipping company focused on the growing market for Liquefied Natural Gas (LNG). Our fleet consists of thirteen LNG carriers on the water and all of our vessels are state-of-the-art ships with the latest generation two-stroke propulsion (MEGI and X-DF). These modern ships offer significant improvements in fuel efficiency and thus also carbon footprint compared to the older steam and four-stroke propelled ships. Flex LNG is listed on the New York Stock Exchange as well as Oslo Stock Exchange under the ticker FLNG. For more information, go to: www.flexlng.com 

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View original content:https://www.prnewswire.com/news-releases/flex-lng---finalize-175-million-lease-financing-for-flex-courageous-302470364.html

SOURCE Flex LNG

FAQ

What is the value of FLNG's new lease financing for Flex Courageous?

Flex LNG secured a $175 million JOLCO lease financing for the Flex Courageous vessel

How much net proceeds did FLNG generate from the Flex Courageous refinancing?

The refinancing generated approximately $42 million in net proceeds

What is the debt maturity extension for FLNG's Flex Courageous refinancing?

The refinancing extends the debt maturity to 2035

How many vessels does Flex LNG plan to refinance in 2025?

Flex LNG plans to refinance three vessels: Flex Courageous (completed), Flex Resolute, and Flex Constellation

What was Flex LNG's cash balance at the end of Q1 2025?

Flex LNG held a cash balance of $410 million at the end of Q1-2025

How much will the cost of debt be reduced through the Flex Courageous refinancing?

The refinancing will reduce the cost of debt by approximately 1.5% per year