offer by Geveran - Fearnley Securities AS

OFFER DOCUMENT
MANDATORY OFFER TO ACQUIRE ALL ISSUED AND OUTSTANDING SHARES IN
FLEX LNG Ltd.
MADE BY
GEVERAN TRADING CO LTD
OFFER PRICE:
NOK 8.00 PER SHARE WITH SETTLEMENT IN CASH
OFFER PERIOD:
FROM AND INCLUDING 20 NOVEMBER 2014
TO AND INCLUDING 18 DECEMBER 2014 AT 16:30 (CET)
(SUBJECT TO EXTENSION)
THE OFFER IS NOT BEING MADE AND DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION IN ANY JURISDICTION OR TO ANY PERSON WHERE THE MAKING OR
ACCEPTANCE OF THE OFFER OR SOLICITATION WOULD BE SUBJECT TO RESTRICTIONS
OR IN VIOLATION OF THE LAWS OR REGULATIONS OF SUCH JURISDICTION. OTHER
RESTRICTIONS APPLY. PLEASE SEE THE IMPORTANT NOTICES UNDER “IMPORTANT
INFORMATION” ON PAGE 1 AND UNDER “OFFER RESTRICTIONS” ON PAGE 2 FOR MORE
INFORMATION ON THESE RESTRICTIONS.
RECEIVING AGENT:
Fearnley Securities AS
19 NOVEMBER 2014
Important information
Please refer to page 6 for definitions, which also applies to preceding pages.
This Offer Document has been prepared in accordance with section 6-13 of the Securities Trading
Act in connection with the Mandatory Offer submitted by Geveran to acquire all issued and
outstanding Shares in Flex LNG not already owned by Geveran or Persons acting in concert as of
the date of this Offer Document.
The Offer and this Offer Document has been reviewed and approved by Oslo Børs in its capacity as
the Norwegian take-over supervisory authority, in accordance with section 6-14 of the Securities
Trading Act.
Shareholders must rely upon their own examination of the Offer and should study this Offer
Document carefully and, if necessary, seek independent advice concerning the Offer and this Offer
Document in order to be able to make an informed and balanced assessment of the Offer and the
information set out in this Offer Document. Shareholders should not construe the contents of this
Offer Document as legal, tax or accounting advice, nor as information necessarily applicable to
each Shareholder. Each Shareholder is urged to seek independent advice from its own financial,
tax, accounting and legal advisors prior to making a decision to accept the Offer.
The information regarding the Company is based on the Company’s public accounts and other
material in the public domain. The Offeror disclaims any responsibility and liability for the accuracy
or completeness of the Offer Document in terms of the information on the Company. The
distribution of this Offer Document does not and shall not imply in any way that the information
included herein continues to be accurate and complete at any date subsequent to the date of this
Offer Document. The Offeror does not undertake any obligation to update the Offer Document for
any facts or circumstances occurring after the date of this Offer Document unless required by
applicable law.
With the exception of the Offeror, no person is entitled or authorised to provide any information or
make any representations in connection with the Offer. If such information or representation is
provided or made by any other person than the Offeror, such information or representation, as the
case may be, should not be relied upon as having been provided or made by or on behalf of the
Offeror.
The Offer is directed at all Shareholders who may legally receive this Offer Document and accept
the Offer. In this respect further reference is made to the restrictions for the Offer set out under
the section "Offer Restrictions" below. Copies of this Offer Document will be distributed to the
Shareholders registered in the shareholders register in VPS as at the date of this Offer Document,
except for Shareholders in jurisdictions where this Offer Document may not be lawfully distributed.
Further, copies of the Offer Document are also available free of charge by contacting the Receiving
Agent at:
http://fearnleysecurities.com/Capital-Markets/
or:
Fearnley Securities AS
Grev Wedels Plass 9
P.O. Box 1158, Sentrum
0107 Oslo, Norway
Telephone: + 47 22 93 60 00
Telefax: + 47 22 93 63 60
Fearnley Securities AS acts as receiving agent only for the Offer. Fearnley Securities AS does not
accept responsibility for the Offer Document, for the risk of any acceptance forms not being
properly received, or for the settlement of the offer. Fearnley Securities AS does not provide any
advice or recommendation in respect of the actions to be taken by any recipient in respect of the
Offer.
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Offer restrictions
General
The Offer and this Offer Document are not to be regarded as an offer, whether directly or
indirectly, in jurisdictions where such offer pursuant to legislation and regulations in such relevant
jurisdictions would be prohibited by applicable law. Shareholders not resident in Norway wanting to
accept the Offer must make inquiries on relevant and applicable legislation, including but not
limited to whether public consent is required. The Offer is not made, neither directly nor indirectly,
and acceptance of this Offer will not be binding upon the tendering shareholders from, or on behalf
of, shareholders in any jurisdiction where presenting the Offer or acceptance thereof would be in
conflict with the laws of such jurisdictions (the “Restricted Jurisdictions”), including, but not
limited to, shareholders present in, with registered or mailing addresses in, or who are citizens of
Canada and Australia.
This Offer Document, the Acceptance Form and other documents or information relating to this
Offer Document or to the Offer are not being and must not be mailed, communicated, or otherwise
distributed in or into the Restricted Jurisdictions by any Shareholder, any broker-dealer, bank or
other intermediaries holding the Shares on behalf of any beneficial shareholder, or any other
person in any manner whatsoever. Persons receiving such documents or information (including,
without limitation, custodians, nominees and trustees) should not distribute or send them in or into
a Restricted Jurisdiction or use mails or any means, instrumentality or facility of a Restricted
Jurisdiction in responding to the Offer or otherwise in connection with the Offer.
Any failure to comply with these restrictions may constitute a violation of applicable securities laws.
It is the responsibility of all persons obtaining the Offer Document, the Acceptance Form or other
documents relating to this Offer Document or to the Offer or into whose possession such
documents otherwise come, to inform themselves of and observe all such restrictions. Any recipient
of this Offer Document who is in any doubt in relation to these restrictions should consult his or her
professional advisors in the relevant jurisdiction. Neither the Offeror nor the Receiving Agent
accept or assume any responsibility or liability for any violation by any person whomsoever of any
such restriction.
This Offer Document does not represent an offer to acquire or obtain securities other than the
shares in the Company that are subject to the Offer.
Canada
Neither this Offer Document nor any copy of it may be taken or transmitted into Canada or
distributed or redistributed in Canada or to any individual outside Canada who is a resident of
Canada, except in compliance with applicable rules.
Australia
The Offer is not being made directly or indirectly in or into and may not be accepted in or from
Australia. Accordingly, if any copies of this Offer Document (and any accompanying documents)
are mailed or otherwise distributed or sent in or into Australia, that action does not constitute an
offer and any purported acceptance by or on behalf of an Australian resident will be invalid.
No document in connection with the Offer has been lodged with the Australian Securities &
Investments Commission (“ASIC”) and ASIC has not approved the Offer in Australia.
Notice for US Shareholders
The Offer will be made in the United States pursuant to an exemption from certain requirements of
the United States federal tender offer rules as provided by Rule 14d-1(c) under the United States
Securities Exchange Act of 1934, as amended (the “Exchange Act”) and is subject only to certain
provisions of Section 14(e) and Regulation 14E thereunder and certain other applicable laws. The
Offer will be made for the securities of a BVI registered company whose shares are listed on Oslo
Axess and is subject to Norwegian disclosure requirements, which are different from those of the
United States. The Offer will be made in the United States pursuant to applicable United States
federal tender offer rules and otherwise in accordance with the requirements of Norwegian law and
the applicable rules and regulations of Oslo Børs and Oslo Axess. Accordingly, the Offer will be
subject to disclosure and other procedural requirements, including with respect to withdrawal
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rights, offer timetable, settlement procedures and timing of payments that may be different from
those applicable under United States domestic tender offer procedures and law.
The receipt of cash pursuant to the Offer by a US holder of the Company’s Shares may be a taxable
transaction for US federal income tax purposes and under applicable US state and local, as well as
foreign and other tax laws. Each holder of Shares is urged to consult his independent professional
adviser regarding the tax consequences of acceptance of the Offer.
It may be difficult for US holders of the Company’s Shares to enforce their rights and any claim
arising out of the US federal securities laws, since the Offeror is located in a non-US country, and
some or all of its officers and directors may be residents of a non-US country. US holders of Shares
may not be able to sue a non-US company or its officers or directors in a non-US court for
violations of the US securities laws. Further, although US holders are not waiving their rights under
US federal laws by accepting the Offer it may be difficult to compel a non-US company and its
affiliates to subject themselves to a US court’s judgment.
In accordance with Norwegian law and pursuant to Rule 14e−5(b) of the Exchange Act, the Offeror
or its nominees or brokers (acting as agents) may from time to time make certain purchases of, or
arrangements to purchase, Shares outside the United States, other than pursuant to the Offer,
before or during the period in which the Offer remains open for acceptance. These purchases may
occur either in the open market at prevailing prices or in private transactions at negotiated prices.
Such purchases or arrangements to purchase Shares must comply with Norwegian law and other
applicable law. Any information about such purchases will be disclosed as required in Norway and
will be available via the online information system of Oslo Børs (www.newsweb.no) set out in
section 2.13 “Notices”.
This Offer Document has not been approved, disapproved or otherwise recommended by the US
Securities and Exchange Commission (the “SEC”) or any US state securities commission and such
authorities have not confirmed the accuracy or determined the adequacy of this document.
In the United States, the Offer will be deemed made solely by the Offeror and not by any of its
financial or other advisers.
Cautionary note regarding forward-looking statements
This Offer Document may contain statements about the Offer, the Offeror and the Company that
are or may constitute forward-looking statements. All statements other than statements of
historical fact may be forward-looking statements. Forward-looking statements include, without
limitation, statements typically containing words such as “intends”, “expects”, “anticipates”,
“targets”, “estimates”, “projects”, “believes”, “should”, “plans”, “aims”, “will”, “may” and words or
terms of similar substance or the negative thereof. Forward-looking statements include statements
relating to the following: (i) expected effects of the Offer, (ii) the expected timing and scope of the
Offer.
Such forward-looking statements involve risks and uncertainties that could significantly affect
expected results and are based on certain key assumptions. Many factors could cause actual
results and developments to differ materially from those expressed or implied by or in any forwardlooking statements. Due to such risks and uncertainties, readers should not place undue reliance
on such forward-looking statements, which speak only as of the date hereof. Neither the Offeror or
the Receiving Agent, nor any of their affiliates, managers, employees or directors, officers or
advisers, provides any representation, assurance or guarantee that the occurrence of the events
expressed or implied in any forward-looking statements in this document will actually occur. Other
than in accordance with its legal or statutory obligations, the Offeror is under no obligation and
expressly disclaims any intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. All subsequent written and oral
forward-looking statements attributable to the Offeror are expressly qualified in their entirety by
the cautionary statements above.
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Statements regarding the Offer Document
This Offer Document has been prepared by the Offeror in accordance with Section 6-13 of the
Securities Trading Act in order to provide Flex LNG Shareholders with a basis for evaluating the
Offer. The Offer Document has been reviewed and approved by Oslo Børs in accordance with
Section 6-14 of the Securities Trading Act.
The information about Flex LNG included in this Offer Document has been prepared exclusively on
the basis of publicly available information. Neither we, nor any of our affiliates, representatives or
advisors, have verified independently such information, and consequently, do not assume any
responsibility or liability for the correctness or accuracy of such information.
19 November 2014
Geveran Trading Co Ltd
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Table of contents
Important information.......................................................................................................... 1
Offer restrictions ................................................................................................................. 2
Statements regarding the Offer Document .............................................................................. 4
Table of contents................................................................................................................. 5
Definitions .......................................................................................................................... 6
1.
Background for the Offer ............................................................................................... 8
2.
The Offer .................................................................................................................... 10
3.
Brief description of Flex LNG ......................................................................................... 15
4.
Tax consequences ....................................................................................................... 17
Appendices:
Appendix 1 Acceptance Form
Appendix 2 Bank guarantee
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Definitions
In this Offer Document, the following terms shall have the meanings set out below. Words
importing the singular include the plural and vice versa.
Acceptance ..................................
The acceptance of this Offer by a Shareholder, subject to
the terms and conditions set out in this Offer Document.
Acceptance Form ..........................
The form of acceptance to be used by Shareholders when
accepting this Offer, enclosed as Appendix 1 to this Offer
Document.
Acceptant ....................................
A Shareholder who accepts this Offer.
Board of Directors ........................
The Board of Directors of the Company.
BVI .............................................
The British Virgin Islands
Flex LNG or the Company ..............
Flex LNG Ltd, a public limited liability company
incorporated under the laws of the British Virgin Islands.
Geveran or the Offeror ..................
Geveran Trading Co Ltd, a private limited liability
company incorporated under the laws of the Republic of
Cyprus with org. no. HE 37780.
Group .........................................
The Company and its consolidated subsidiaries.
Offer or Mandatory Offer ...............
The mandatory offer made by the Offeror to acquire all
issued and outstanding Shares in the Company not
already owned by Geveran or Persons acting in concert as
of the date of this Offer Document on the terms set out in
this Offer Document.
NOK ...........................................
Norwegian Kroner, the lawful currency of Norway.
Offer Document ...........................
This Offer Document with appendices.
Persons acting in concert ...............
Any person, natural or legal, acting in concert with the
Offeror, as further defined in section 2-5 in the Securities
Trading Act.
Offer Period .................................
The period during which the Shareholders may accept the
Offer, from and including 20 November 2014 to and
including 18 December 2014.
Offer Price ...................................
NOK 8.00 per Share in cash.
Oslo Axess...................................
A regulated market operated by Oslo Børs.
Oslo Børs ....................................
Oslo Børs ASA.
Receiving Agent ...........................
Fearnley Securities AS.
Restricted Jurisdiction ...................
Any jurisdiction where presenting the Offer or acceptance
thereof would be in conflict with the laws of such
jurisdictions.
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Securities Trading Act ...................
The Norwegian Securities Trading Act of 29 June 2007 no.
75 (in Norwegian: “verdipapirhandelloven”).
Settlement Date ...........................
The date when settlement of the Offer Price takes place in
accordance with section 2.6 “Settlement” below.
Shareholder .................................
An owner of Shares.
Shares ........................................
All shares in Flex LNG issued and outstanding as of the
date of this Offer Document.
VPS ............................................
The Norwegian Central Securities
Norwegian: “Verdipapirsentralen”).
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Depository
(in
1.
Background for the Offer
1.1
Events leading up to the Offer
On 24 October 2014, Geveran announced that it had acquired Shares by which it had passed onethird ownership in Flex LNG, by which the criteria for a mandatory offer had been met.
In the same announcement, Geveran stated its intention to make a mandatory offer for the
remaining shares of Flex LNG.
The acquisition giving rise to the announcement consisted of a purchase on 23 October 2014 of
12,722,682 shares in Flex LNG at a price of NOK 7.75. Through this purchase, Gevaran’s ownership
in Flex LNG was increased to 54,897,544 Shares, representing 43.32% of the issued share capital
and the associated voting rights. As an effect of subsequent purchases, Gevaran’s ownership
currently amounts to 59,248,774 Shares (46.75%).
1.2
The Offeror
The Offeror (Geveran Trading Co Ltd, or “Geveran”), is a private limited liability company
incorporated under the laws of the republic of Cyprus with registration number HE 37780. The
Offeror has its registered business address at Arch. Makariou III, 229, Meliza Court, 4th floor, 3105
Limassol, Cyprus.
Geveran is indirectly controlled by trusts established by John Fredriksen for the benefit of his
immediate family.
As of the date of this Offer Document, the Offeror holds 59,248,774 Shares, corresponding to
46.75% of the share capital and voting rights.
As of the date of this Offer Document, the Offeror does not own loans as referred to in the
Securities Trading Act section 6-13 (2) no. 4, nor any other financial instruments that give right to
acquire Shares.
No Shares are held, or have been held for the six months preceding the triggering of the Offer, by
Persons acting in concert with the Offeror. Further, no Persons acting in concert with the Offeror
own or have owned for the six months preceding the triggering of the Offer any loans convertible
into Shares or other financial instruments giving the right to acquire Shares.
1.3
The target company
The target company (Flex LNG Ltd, or “Flex LNG”, or the “Company”), is a public limited liability
company incorporated under the laws of BVI. The Company has its registered business address at
Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, BVI.
The Shares are listed on Oslo Axess under the ticker code “FLNG”, and are registered in the VPS
under the ISIN VGG359451074.
For further information about the Company, please see section 3 “Brief description of Flex LNG”.
1.4
Contact between the Offeror and the Company prior to the Offer
There has been no contact pertaining to the Offer or matters relating thereto between the Offeror
and the management or governing bodies of the Company prior to the Offer, nor other contact that
differs from the ordinary contact between a company and its major shareholders.Notwithstanding
the above, the Offeror has been actively engaged in the matters of the Company through being its
largest shareholder. A director of the Company, Mr. Jens Martin Jensen, who was elected in a
shareholders’ meeting which was called on 8 October 2014 and held on 27 October 2014 (three
days subsequent to the announcement of the acquisition giving rise to the Offer), is also a director
of Frontline Ltd., a company affiliated with Geveran. Also, on 28 October 2014 (four days
subsequent to the announcement of acquisition giving rise to the Offer) Flex LNG announced that it
had agreed terms with Metrogas Holdings Inc., an affiliate of Geveran, for a working capital loan of
USD 7 million.
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1.5
Purpose of the Offer and future plans for Flex LNG
Pursuant to chapter 6 of the Securities Trading Act, the Offeror is obligated to make the Offer as
the Offeror has become the owner of more than one-third of the voting rights of Flex LNG through
share purchases. Accordingly, the Offeror makes the Offer to comply with the requirements under
the Securities Trading Act.
Following the completion of the Offer, and assuming an outcome of the Offer which makes it
possible, the Offeror intends to keep Flex LNG as a listed company with a broad ownership
structure with itself as a large shareholder. There are currently no plans for reorganization of Flex
LNG as a result of the Offer. The Offeror intends to continue its support to the Company’s business
as an owner and operator of LNG vessels.
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2.
The Offer
2.1
Introduction
The Offeror hereby makes the Offer to acquire all issued and outstanding Shares in the Company
not already owned by the Offeror on the terms set out in this Offer Document. The Offer does not
include new any shares issued after the date of the Offer Document.
2.2
Offer Price
The Offer Price is NOK 8.00 per Share and will be paid in cash subject to the terms set out in the
Offer Document.
The Offer Price is equal to the highest price that the Offeror has paid or agreed to pay for Shares in
the Company during the six month period before the mandatory offer obligation was triggered.
The Offer Price represents a premium to the market price of the Shares at the time when the Offer
was triggered on 23 October 2014, by means of an aftermarket trade. The closing price for the
Shares at that date was NOK 7.70, and the Shares had traded that day in a range of NOK 7.31 to
NOK 7.80.
The Offer Price also represents a premium to the average market price of the Shares over the six
month period before the Offer was triggered. For the period from 24 April through 23 October
2014, the average closing price for the Shares was NOK 6.73 (calculated as a simple average), and
the lowest and highest closing prices during that period were NOK 5.75 and NOK 8.00 respectively.
2.3
Offer Period
The Offer Period is from and including 20 November 2014 to and including 18 December 2014 at
16:30 (CET). Subject to the approval by Oslo Børs, the Offeror may in its sole discretion extend the
Offer Period (one or more times) so that the aggregate Offer Period amounts up to a total of six
weeks (in which case it would expire on 2 January 2015). Any extension of the Offer Period will be
announced in the manner described in section 2.14 “Notices” below on or before the last day of the
prevailing Acceptance Period. When referring to the Acceptance Period in this Offer Document this
refers to the Offer Period as extended from time to time.
2.4
Acceptance of the Offer
In order for the Shareholders to accept the Offer, the Acceptance Form must be correctly filled out,
signed and delivered to the Receiving Agent together with any required supplementary documents
(i.e. power of attorney). Information on individual shareholdings and certain other matters relating
to each Shareholder has already been included in the Acceptance Form. A Shareholder may only
obtain the settlement described in section 2.6 “Settlement” below by complying with the above.
It is the Acceptant’s responsibility to correctly fill out the Acceptance Form and deliver it to the
Receiving Agent before the end of the Offer Period, at which time the Acceptance Form must be
received by the Receiving Agent at the address below by means of post, delivery, e-mail or telefax:
Fearnley Securities AS
Grev Wedels Plass 9
P.O. Box 1158, Sentrum
0107 Oslo, Norway
Telephone: + 47 22 93 60 00
Telefax: + 47 22 93 63 60
E-mail address: [email protected]
The Offeror is not required to accept Acceptance Forms that are received after the expiration of the
Offer Period, but may do so in its sole discretion. Neither the Offeror or the Receiving Agent, nor
any third parties, will be responsible for delays in the postal system or for Acceptance Forms
forwarded by fax or e-mail that are not received in time. The Offeror reserves the right to reject
any or all Acceptances which are incomplete, incorrect, do not comply with the restrictions set forth
in this Offer Document, or are otherwise illegal. The Offeror also reserves the right to consider an
acceptance valid, wholly or partially, even if incorrect, not accompanied by the necessary
document(s) or otherwise or received elsewhere than stated above, in which event settlement will
be completed when such Acceptance is fully corrected and all necessary documents have been
10
received, to the satisfaction of the Offeror. However, the Offeror will ensure to comply with the
requirements for equal treatment of shareholders pursuant to section 6-10 (9) of the Securities
Trading Act when exercising its discretion in respect of the foregoing.
Neither the Offeror or the Receiving Agent, nor any third parties, will be under any duty to give
notification of any deficiency or irregularity with respect to any Acceptances or incur any liability for
failure to give any such notification.
An Acceptance will cover all Shares stated on the Acceptance Form. If an Acceptant wishes to
accept the Offer for less than all the Shares registered on the Acceptant’s VPS account as of the
date of the Offer Document or if an Acceptant wishes to include shares acquired, or registered on
the Acceptant’s VPS-account, after the date of the Offer Document, such Acceptant must fill out the
number of Shares included in the Acceptance in the Acceptance Form.
Shareholders whose Shares are split between several VPS accounts will receive a separate
Acceptance Form for each such account and are required to submit separate Acceptance Forms for
each such account.
Any Shareholder whose Shares are registered in the name of a broker, dealer, commercial bank,
trust company or other nominee must contact such person if such shareholder wishes to accept the
Offer.
In order for a Shareholder to validly accept the Offer, the Acceptance Form must be signed by the
Shareholder or his authorised attorney.
All Shares to be tendered by an Acceptant under the Offer must be transferred to the Offeror free
of any encumbrances or other third-party rights whatsoever and with all shareholder rights
attached to them.
Any third party with registered encumbrances or other third-party rights over the relevant VPSaccount(s) must sign the Acceptance Form and thereby waive its rights to the Shares recorded
thereon and approve the transfer of such shares to the Offeror, free of any encumbrances.
The Acceptance will be irrevocable and cannot be withdrawn, in whole or in part, after having been
received by the Receiving Agent.
A Shareholder is, by returning the Acceptance Form to the Receiving Agent, bound to accept the
cash consideration offered in the Offer on the terms set forth herein.
By accepting the Offer, each Acceptant gives the Receiving Agent an irrevocable power of attorney
to carry out all actions necessary to complete the Offer, including but not limited to, pledging and
blocking the Acceptant’s Shares in favour of the Receiving Agent on behalf of the Offeror, pending
transfer of such Shares to the Offeror upon completion of the Offer. The Acceptant also grants the
Receiving Agent an irrevocable authority, upon completion of the Offer, to transfer the Shares from
its blocked VPS account to the Offeror's VPS account. Settlement will be made simultaneously with
the transfer of the Shares to the Offeror.
The Offeror, or the Receiving Agent on behalf of the Offeror, will not submit any confirmation of
receipt of Acceptance Forms to the Acceptants.
2.5
Acceptance by foreign shareholders
The Offeror is aware of holders of Shares in the following jurisdictions; Cyprus, Norway, Japan,
United Kingdom, Germany, Belgium, USA, Switzerland, Luxembourg, Sweden, Denmark,
Singapore, Thailand, Netherlands, France, Brazil and Italia. Subject to the information set out in
the section “Offer restrictions” above, the Offeror is not aware of jurisdictions in which the
Company has shareholders who cannot accept the Offer.
2.6
Settlement
Settlement of the Offer will be made as soon as reasonably possible, and no later than two weeks
after the end of the Offer Period, i.e. not later than 2 January 2015 (subject to extension of the
Offer Period, in which case settlement of the Offer will be made no later than 16 January 2015
assuming maximum extension of the Offer Period). The Acceptants will not be entitled to any
interest compensation in connection with the Offer.
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Settlement will be made to the bank account registered in the VPS for dividend payments for each
Acceptant at the time of the Acceptance. In the event that no such bank account is registered,
settlement will be made by bank giro (a settlement system used in Norway, similar to a Norwegian
currency banker’s draft), or by cheque. In the event an Acceptant wishes to receive the cash
payment in a bank account other than the account registered in the VPS for dividend payments,
such Acceptant is required to state such bank account number in the Acceptance Form. For
Shareholders who do not hold a bank account with a Norwegian bank, payment details for offshore
payments must be included, such as IBAN, SWIFT/BIC or similar payment codes depending on the
jurisdiction where the bank account is located.
2.7
Costs
The Offeror will pay costs directly related to the VPS transactions in connections with the Offer.
Acceptants will not incur any brokerage fees or other costs directly related to the VPS transactions
in connections with the Offer.
The Offeror will not cover or reimburse any costs incurred by Shareholders for financial or legal
advice, or any other costs in connection with the Offer.
2.8
Financing of the Offer
The Offer will be financed with existing funds available to the Offeror.
The Offeror has in accordance with section 6-10 (7) of the Securities Trading Act, provided a bank
guarantee, issued by Nordea Bank Finland Plc, covering the Offeror’s obligation to pay for the
Shares to be purchased pursuant to the Offer. The text of the bank guarantee is set out in
Appendix 2.
2.9
Tax
Shareholders accepting the Offer are themselves responsible for any tax liability arising as a result
of accepting the Offer and selling the Shares. For a general description of the tax implication for
certain Shareholders, please see section 4 “Tax consequences” below.
2.10
Purchase of Shares outside this Offer
The Offeror reserves the right to make purchases of Shares outside of the Offer.
2.11
Announcements in connection with the Offer
Announcements issued by or on behalf of the Offeror regarding the Offer and / or any amendments
to the Offer Document will be deemed to have been made once they have been distributed through
Oslo Børs’ electronic information system. The Offeror will have no obligation to publish, advertise or
otherwise communicate any such announcement other than by making such release to Oslo Børs.
2.12
Consequences for the Company’s employees
The Offer itself will not have any legal, economic or work related consequences for the Company’s
employees.
2.13
No special advantages to members of the management group or Board of
Directors
No special advantages or benefits have been awarded to, or are being held in prospect for, the
members of the management group, the Board of Directors or any other governing body of Flex
LNG in connection with the Offer.
2.14
Notices
Notices in connection with the Offer will be published by notification through the online information
system of Oslo Børs (www.newsweb.no). Notices will be deemed made when Oslo Børs has
published the notice. Notices and other informational documents, including any amendments
thereto, will also be published, furnished or otherwise disseminated to shareholders in the United
States as may be required under applicable United States federal securities laws.
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2.15
Repeat application of mandatory bid obligation
As of the date of this Offer Document, the Offeror holds Shares corresponding to 46.75% of the
share capital and voting rights.
If, following the Offer, the Offeror has not acquired Shares representing 50% or more of the voting
rights in the Company, the Offeror will be required under chapter 6 of the Securities Trading Act to
make a new mandatory offer upon passing the 50% threshold.
However, if the Offeror following completion of the Offer holds more than 50% of the Shares and
votes in the Company as a result of acquiring Shares in the Offer or otherwise, a mandatory offer
will not be required in relation to further acquisitions of Shares by the Offeror.
If the Offeror holds more than 90% of the voting rights in the Company, the Offeror may instead
instead initate a compulsory redemption as described in 2.16 “Possible redemption of shares”.
2.16
Possible redemption of shares
The Company is subject to BVI legislation in regards to redemption provisions, being established in
BVI. The BVI Companies Act includes rules for forced redemption and the disposition. The
Norwegian compulsory acquisition regulations under section 4-25 of the Norwegian Public Limited
Companies Act and section 6-22 of the Norwegian securities Trading Act do not apply.
Pursuant to Section 176 of the BVI Business Companies Act of 2004, a shareholder or shareholders
in the Company (who need not be related) holding 90% of the votes of the outstanding shares may
give a written instruction to the Company directing it to redeem the shares held by the remaining
shareholders. The remaining shareholders do not have a corresponding right to force a holder of
90% of the votes of the outstanding shares to redeem their shares.
Upon receipt of the written instruction from the shareholder(s) holding 90% of the votes of the
outstanding shares, the Company shall redeem the shares specified in the instruction irrespective
of whether or not the shares are by their terms redeemable. The Company shall give written notice
to each shareholder whose shares are to be redeemed stating the redemption price and the
manner in which the redemption is to be effected. This written notice must be given to the
Company within 7 days of the instruction being given to the Company and the redemption price
must be the price that the Company determines to be the fair value of the shares.
Each redeemed shareholder and the Company then have 30 days to agree upon the redemption
price failing which within 20 days immediately following the date on which the period of 30 days
expires, the Company and the shareholder must each appoint one appraiser who in turn, together,
shall appoint a third appraiser, the three appraisers shall fix the fair value of the shares owned by
that redeemed shareholder and the price agreed by those three appraisers is binding on the
Company and the redeemed shareholder. The Company is then required to pay to the redeemed
shareholder this amount in cash upon the surrender by him of the certificates, if any, representing
his shares.
2.17
Other legal and tax consequences of the Offer
To the Offeror’s knowledge, the Offer itself will not have any other legal consequences other than
set out in this Offer Document. A summary of tax consequences of the Offer is set out in Section 4
“Tax consequences”.
2.18
Statement from the Board of Directors regarding the Offer
Pursuant to Section 6-16 of the Securities Trading Act, the Board of Directors of the Company is
required to issue a statement regarding the Offer, including information on the employees’ views
and other factors of significance for assessing whether the Offer should be accepted by the
Shareholders. Oslo Børs may decide that such statement must be made by others than the Board
of Directors on behalf of the Company.
According to the Securities Trading Act the statement must be issued no later than one week prior
to the expiry of the Offer Period.
13
2.19
Miscellaneous
This Offer Document is being sent to all Shareholders of record as of the date of this Offer
Document to the address recorded on each Shareholder’s VPS account, except Shareholders
residing in jurisdiction where the Offer Document may not be lawfully distributed. No confirmation
of receipt of Acceptances or other documents will be given by, from or on behalf of the Offeror.
Fearnley Securities AS acts as Receiving Agent to the Offeror in connection with the Offer.
Advokatfirmaet BA-HR DA acts as the Offeror’s legal counsel.
In the event of any questions relating to this Offer Document, Shareholders should contact the
Receiving Agent at the following address:
Fearnley Securities AS
Grev Wedels Plass 9
P.O. Box 1158, Sentrum
0107 Oslo, Norway
Telephone: + 47 22 93 60 00
Telefax: + 47 22 93 63 60
2.20
Jurisdiction
The Offer, this Offer Document and all acceptances of the Offer shall be governed by Norwegian
law with Oslo District Court as legal venue. Shareholders accepting the Offer agree that any
dispute arising out of or in connection with the Offer, this Offer Document or any acceptances of
the Offer is subject to Norwegian law and shall exclusively be settled by Norwegian courts and with
the Oslo District Court as legal venue.
14
3.
Brief description of Flex LNG
The following section contains only a brief presentation of the Company and its operations. The
information regarding the Company is based on the Company’s public accounts and other material
in the public domain, in particular the Company’s annual report 2013 and subsequent quarterly
reports. The Offeror does not accept any responsibility for the accuracy or completeness of the
information regarding the Company given in this Offer Document.
For a more detailed description of the Company, please refer to the Company`s website:
http://www.flexlng.com.
3.1
Introduction
Flex LNG Ltd., which is the parent company in the Flex LNG group of companies, is a public limited
company incorporated under the laws of the British Virgin Islands (“BVI”). The address of its
registered office is Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, BVI. A representative
office is maintained in London through a subsidiary, Flex LNG Management Ltd., at its address 80
Coleman Street, Moorgate, London EC2R 5BJ, UK, with telephone number +44 207 653 8930.
The Shares have been listed on Oslo Axess since October 2009. The ticker code is “FLNG”, and the
Shares are registered in the VPS under the ISIN VGG359451074.
3.2
The business of the Company
General
Flex LNG was established in 2006 with the objective of becoming a leading owner and operator of
floating LNG production units and associated activities, including LNG transportation. Following a
settlement with the Korean shipbuilder Samsung in August 2013, the focus has been on LNG
transportation. As part of the settlement with Samsung, two ship building contracts were entered
into between Samsung and the Flex LNG group for two new 174,000 cbm TFDE LNG carriers at
prices reflecting prevailing market conditions at the time of the settlement. As a result of the
settlement agreement, the parties agreed to redeploy USD 210 million from payments already
made to Samsung by the Flex LNG group, and apply this as payment of the first instalments for the
two vessels. The remaining instalments, which are estimated to USD 192 million excluding any
amounts for design change requests and sundry buyer’s supplies, will be due on delivery of the
vessels, which are scheduled for Q1 2017.
Apart from the business of constructing the two new LNG carriers, and the preparation for
operation of these vessels, Flex LNG has no significant other business that the Offeror is aware of.
List of subsidiaries
The Flex LNG group operates principally through its subsidiaries, an overview of which is set forth
below:
Company
Domicile
Main operations
Ownership share
Voting share
M-FLEX 1 Limited
Isle of Man
Ceased to trade
at end of 2013
100%
100%
M-FLEX 2 Limited
Isle of Man
Ceased to trade
at end of 2013
100%
100%
M-FLEX 3 Limited
Isle of Man
Ceased to trade
at end of 2013
100%
100%
M-FLEX 4 Limited
Isle of Man
Ceased to trade
at end of 2013
100%
100%
FLEX LNGC 1
Isle of Man
Shipping
100%
100%
15
Limited
FLEX LNGC 2
Limited
Isle of Man
Shipping
100%
100%
FLEX LNG
Management
Limited
Isle of Man
Management
services
100%
100%
FLEX LNG
Management
(Norway) AS
Norway
Ceased to trade
at end of 2013
100%
100%
FLEX LNG
Management
(Singapore) PTE
LTD
Singapore
Ceased to trade
at end of 2013
100%
100%
Flex Petroleum
Limited
BVI
Holding company
100%
100%
3.3
Share capital
As of the date of this Offer Document, the Company has an issued share capital of USD
1,267,237.24, divided into 126,723,724 shares, each with a par value of USD 0.01. The Shares are
registered in the VPS under the ISIN VGG359451074. The Company has only one class of shares.
3.4
Board of Directors, management and employees
The current members of the Board of Directors are listed below:

Mr. David McManus, Chairman

Mr. Robin Bakken

Mr. Jens Martin Jensen
The executive management are listed below:

CEO: None since 2013

CFO: Mr. Jostein Ueland

CTO: Mr. Trym Tveitnes
At the end of 2013, Flex LNG and its subsidiaries has in total 6 employees and consultants. All
personnel, from 2014, are employed by Flex LNG Management Limited.
16
4.
Tax consequences
Below is a summary of certain Norwegian tax matters related to the realisation of Shares in the
Company pursuant to the Offer. The summary is based on Norwegian tax law as of the date of this
Offer Document. Such laws may be amended, also with retroactive effect. The summary is not
exhaustive, and does not cover all possible tax consequences that may be relevant to a
Shareholder. Each Shareholder should consult their own tax advisor to determine the specific tax
consequences for such Shareholder, and the applicability and effect of any Norwegian or foreign
tax laws and possible amendments thereof.
4.1
Tax consequences for Norwegian Shareholders
Acceptance of the Offer will be regarded as realisation of Shares in the Company for Norwegian tax
purposes.
Corporate Shareholders
Norwegian corporate Shareholders (i.e. limited liability companies or similar entities) are exempt
from tax on capital gains derived from the realisation of shares under the Norwegian participation
exemption method. Correspondingly, any loss incurred as a result of such realisation is not tax
deductible.
Private individual Shareholders
Any gain resulting from a realisation of Shares under the Offer by a Shareholder who is a private
individual is taxable as general income at a rate of 27%. Correspondingly, a loss resulting from
such realisation is deductible from the general income.
The taxable gains or loss will be calculated as the difference between the consideration received for
the Shares less the cost price of the Share plus any RISK-adjustments up to 1 January 2006.
Transactional costs incurred in connection with the sale are deductible in the year of realisation.
From this capital gain, Norwegian individual Shareholders may be entitled to deduct an allowance
when calculating their taxable income, provided that the allowance has not previously been used to
reduce taxable dividend income. The allowance for each share will be equal to the cost price of the
share multiplied by a determined risk free interest rate. The deduction for any unused allowance by
the realisation of a share may not lead to or increase a deductible loss.
If a Norwegian individual Shareholder owns Shares acquired at different points in time, the Shares
that were acquired first will be regarded as the first to be disposed of, on a first-in first-out basis.
4.2
Tax consequences for Non-Norwegian Shareholders
As a general rule, capital gains derived by foreign shareholders are not taxable in Norway.
However, such gains may be subject to Norwegian taxation for foreign Shareholders who hold the
shares in connection with the conduct of a trade or business in Norway, or if the foreign (individual)
Shareholder (i) has been a resident of Norway for tax purposes within the five calendar years prior
to the realisation of Shares and (ii) owned the Shares at the time when said Shareholder no longer
was considered resident in Norway for tax purposes.
Shareholders not resident in Norway are in general urged to seek advice from their own tax
advisers in order to clarify the tax consequences of the sale of Shares under the Offer.
17
Appendix 1
Acceptance Form
Acceptance Form
This acceptance form (the “Acceptance Form”) shall be used when accepting the mandatory offer (the “Offer”) made by Geveran Trading Co Ltd
(“Geveran”) to acquire all issued and outstanding Shares in Flex LNG Ltd. (“Flex LNG”), on the terms set forth in the Offer Document dated 19
November 2014 (the “Offer Document”) to which this Acceptance Form is attached. Capitalized terms used in this Acceptance Form shall have the
same meaning as set out in, and be deemed to be construed in accordance with, the Offer Document.
Offer Price: NOK 8.00 per Share.
Acceptance Period: From and including 20 November 2014 to and including 18 December 2014 at 16:30 CET (subject to extension).
Shareholder:
Properly completed and signed acceptance forms may be
faxed, sent by post, e-mail or delivered to:
Fearnley Securities AS
Grev Wedels Plass 9
P.O. Box 1158, Sentrum
0107 Oslo, Norway
Tel: +47 22 93 60 00
Fax: +47 22 93 63 60
E-mail: [email protected]
The shareholders’ register of Flex LNG as of 19 November 2014 shows:
VPS account:
No. of shares:
Rights holders registered:
GUIDANCE:




Shareholders should read the Offer Document carefully, and note in particular the information and restrictions described in the section
headed “Important Information”, “Offer Restrictions” and “Notice for US Shareholders”.
Shareholders whose Shares are held in more than one VPS account will receive one Acceptance Form for each such account and must
submit one Acceptance Form for each VPS account.
Settlement of the Offer will be made in accordance with the procedures set forth in section 2.6 “Settlement”.
This acceptance will be treated as valid only if any rights holder (marked with a “Yes” under “Rights holders registered”, above) has
consented to the sale and transfer of the Shares free of encumbrances or other third-party rights to Geveran by signing this Acceptance
Form under "Rights holder(s)" below.
ACCEPTANCE:
By duly executing and delivering this Acceptance Form I/we represent and warrant that I/we have received and read the Offer Document,
and accept the Offer for my/our shares in Flex LNG in accordance with the terms of the Offer as set out in the Offer Document.
I/we accept the Offer for ___________ of my/our Shares (Only to be filled out if you wish to undertake a partial acceptance or if you wish to
include Shares acquired, or registered on the VPS-account, after the date of the Offer Document).
SIGNATURE:
Place
Date
Name of contact person
Telephone no.
E-mail
Signature *)
*) If signed pursuant to proxy, a proxy form or company certificate confirming the authorized signature must be enclosed.
Alternative bank account for Acceptants who do not have a Norwegian bank account connected to their VPS account:
Fill in here: _________________________(IBAN-number) and ______________________ (SWIFT/BIC-code)
Rights holder(s): In the event that there is registered holder(s) of rights on the VPS-account this is marked with a YES in the “Rights holders
registered” box set out above in this Acceptance Form. As rights holder the undersigned consents that the transaction is undertaken on the abovementioned terms.
Place
Date
Name of contact person
Telephone no.
E-mail
Rights holder’s
signature *)
*) If signed pursuant to proxy, a proxy form or company certificate confirming the authorized signature must be enclosed. If more than one charge holder is registered,
each of the charge holders must sign.
A1
Appendix 2
Bank guarantee
B1
`