Fredriksen Sets Up $2 Billion LNG Powerhouse

EXMAR’s Caribbean FLNG, the world’s first floating LNG liquefaction and storage (FLNG) facility. Photo: EXMAR

By Mikael Holter

(Bloomberg) — Billionaire John Fredriksen and Exmar NV are transferring liquefied natural gas assets to Flex LNG Ltd. to create a company operating 13 vessels with an enterprise value of $2.3 billion.

Antwerp-based Exmar will transfer its assets to Fredriksen- controlled Flex LNG in return for 323.7 million new shares in the company, giving it a 64.6 percent stake, London-based Flex LNG said in a statement Wednesday. Fredriksen’s Geveran Trading Co. Ltd., currently the biggest owner of Flex with 81.5 percent of the shares, will hold 30.7 percent in the re-named Exmar LNG Ltd. combination.

“I’m very enthusiastic about this partnership,” Fredriksen said in the statement. “Together I believe we are uniquely positioned to grow and develop this company to the benefit of all shareholders.”

Flex rose as much as 40 percent in Oslo, the most since Sept. 2, 2013, trading 34 percent higher at 13 kroner a share as of 10:17 a.m. Exmar rose as much as 13 percent in Brussels, the most in more than 5 years, trading 10 percent higher at 9.8 euros.

Fredriksen acquired Flex LNG last year after dumping more than 80 percent of his shares in shipper Golar LNG Ltd. After the transaction with Exmar, the Norwegian-born shipping billionaire’s new venture in the LNG industry will consist of six LNG carriers, five floating storage and re-gasification units and two floating liquefaction units, several of which are still under construction.

Share Issue

The transaction is expected to close during the third quarter. Exmar LNG, which will have an equity value of about $823 million, making it “one of the largest independent floating LNG infrastructure players,” intends to remain listed on the Oslo Axess exchange, Flex LNG said.

Exmar LNG plans to issue new shares within 12 months to fund the company’s growth, Exmar’s chief financial officer Miguel de Potter said in an interview with news agency TDN Finans. The size of the sale will depend, among other factors, on whether Exmar and Fredriksen wish to invest more, he said.

“The ambition is to pursue further growth within the LNG value chain,” Flex LNG said in the statement. “The intention is to finance such growth with cash generated from existing projects, private and public debt and potentially new equity.”

The combined company expects Nicolas Saverys, Exmar’s chief executive officer, to serve as chairman of the board, with Bart Lavent, Exmar’s managing director for LNG Upstream & Downstream, serving as CEO.

SEE ALSO (opens as pdf): EXMAR LNG Presentation