Golar announces execution of Terms Agreement to separate its 8 TFDE
LNG carriers into Cool Company Ltd. Cornerstone equity commitment
received from Eastern Pacific Shipping.
Golar is pleased to announce the formation of
Cool Company Ltd. (“CoolCo” or “Company”), and the entry into a
pre-commitment agreement (the “Terms Agreement” or the
“Agreement”). CoolCo targets to become a growth vehicle and
consolidator of modern LNG carriers and provide investors with
direct market exposure to an expected continued strength in the LNG
freight market.
The consummation of the transactions
contemplated by the Terms Agreement would result in CoolCo
acquiring Golar’s 8 TFDE LNG carriers with plans to raise equity
and separately list on Euronext Growth in Oslo during Q1 2022.
CoolCo is also expected to acquire the commercial and technical
organization associated with the operation of Golar’s owned and
operated shipping and FSRU assets to become a fully integrated
operating platform with capacity for fleet growth. The anticipated
IPO proceeds will, together with a contemplated debt refinancing,
be used to acquire the 8 TFDE vessels from Golar, secure attractive
financing and provide CoolCo with working capital to position the
company for further growth. Outstanding Contractual Debt associated
with the 8 vessels was $858 million as of September 30, 2021.
In addition to a cash release, Golar intends to
retain approximately 1/3rd of CoolCo as contemplated by the Terms
Agreement. Eastern Pacific Shipping (“EPS”), one of the world’s
largest privately-owned shipping companies, has as part of the
Agreement pre-subscribed for $150 million in CoolCo equity based on
an average TFDE ship valuation of $145 million, making EPS the
largest shareholder of CoolCo. Subject to market conditions, the
Terms Agreement contemplates an equity private placement to outside
investors during Q1 2022. Alongside Golar, EPS will take an active
role in the further development of CoolCo and will chair the Board
of Directors.
Five listed LNG carrier companies have been
taken private during 2021. Remaining listed peers have limited
market exposure for modern tonnage. CoolCo aims to provide
investors with attractive market exposure, dividend distributions,
attractive organic growth and pursue industry consolidation.
Karl Fredrik Staubo, CEO of Golar commented:
“We are encouraged by the strong underlying
market fundamentals for LNG carriers. The Cool Company transaction
will allow Golar to separate its shipping business and simplify its
corporate structure, while maintaining significant and attractive
exposure to the LNG carrier business.
We are excited to develop Cool Company with
Eastern Pacific Shipping. EPS is one of the world’s leading
shipping companies and a first mover and global trendsetter in
ordering LNG-fueled tonnage in traditional shipping sectors like
container, dry bulk, car carriers and tankers.
The Terms Agreement is consistent with the
planned business separation of Golar’s shipping activities and
previously announced strategy to focus activities and growth on our
market leading FLNG business. Recent increases in global LNG prices
have further increased the attractiveness of potential new
liquefaction projects. Before considering growth projects, Adjusted
EBITDA generated by the FLNG segment is expected to quadruple from
current levels over the next 2-3 years, supported by additional
production and commodity exposure on Hilli and contracted earnings
from Gimi.”
Cyril Ducau, CEO of Eastern Pacific Shipping
commented:
“EPS is pleased to be adding LNG shipping to our
diverse shipping portfolio. LNG will play an essential role as a
commodity and marine fuel as the world transitions to cleaner
energy solutions.
Golar’s solid track record, mature platform, and
like-minded vision made this investment an easy decision. As a
provider of dual-fuel LNG tonnage across all our segments, EPS
looks forward to taking a leading role in making CoolCo a
world-class leader in LNG shipping, combining our complementary
skills and expertise with Golar’s.”
Clarksons Platou Securities has acted as advisor
to EPS and Golar.
About Eastern Pacific
Shipping
With a history spanning 60 years, Eastern
Pacific Shipping Pte. Ltd. is a leading shipping company that is
committed to the green and technology-driven growth of the
industry. Headquartered in Singapore for the past 30 years, EPS is
driven by its mission to be the safe and efficient transportation
provider of choice to the shipping industry. EPS comprises a
workforce of over 5,000 across sea and shore, and a versatile fleet
of 188 vessels amounting to 19 million deadweight-tonnes across
containership, dry bulk, and tanker vessels.
About Golar
With a history spanning 75 years, Golar LNG is
one of the world's most innovative and experienced independent
owners and operators of marine LNG infrastructure. The company
developed the world's first Floating LNG liquefaction terminal
(FLNG) and Floating Storage and Regasification Unit (FSRU) projects
based on the conversion of existing LNG carriers. Front End
Engineering and Design (FEED) studies have also been completed for
a larger newbuild FLNG solution.
About the Terms Agreement
The Terms Agreement was executed on December 15,
2021 between Golar and EPS. The transactions contemplated by the
Terms Agreement are subject to the satisfactory negotiation and
execution of equity purchase agreements with EPS and Golar, lessor
consents, debt financing and the completion of a private placement
or placements to third party investors. Each of those
agreements, if executed, will contain additional closing
conditions. While Golar and EPS intend to work together in
good faith to complete the transactions contemplated by the Terms
Agreement, there can be no assurance that the terms of such
agreements will not deviate materially from the terms contemplated
by the Terms Agreement, the timing of the completion of those
agreements or that they will ultimately be executed and/or
consummated.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking
statements (as defined in Section 21E of the Securities Exchange
Act of 1934, as amended) which reflects management’s current
expectations, estimates and projections about its operations,
including the consummation of transactions contemplated by the
Terms Agreement as well as anticipated Adjusted EBITDA attributable
to Golar’s FLNG operations. All statements, other than statements
of historical facts, that address activities and events that will,
should, could or may occur in the future pursuant to the Terms
Agreement or are anticipated for LNG carriers or GLNG’s FLNG
operations are forward-looking statements. Words such as “may,”
“could,” “should,” “would,” “expect,” “plan,” “anticipate,”
“intend,” “forecast,” “believe,” “estimate,” “predict,” “propose,”
“potential,” “continue,” or the negative of these terms and similar
expressions are intended to identify such forward-looking
statements.
These statements are not guarantees of future
performance of the transactions contemplated by the Terms Agreement
or LNG or FLNG business activities and are subject to certain
risks, uncertainties and other factors, some of which are beyond
our control and are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is expressed
or forecasted with respect to the Terms Agreement or our LNG and
FLNG businesses in these forward-looking statements. You should not
place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. Golar LNG Limited
undertakes no obligation to update publicly any forward-looking
statements whether as a result of new information, future events or
otherwise, unless required by applicable law.
Hamilton, Bermuda
December 15, 2021
Enquiries:
Golar Management Limited: + 44 207 063 7900
Karl Fredrik Staubo - CEO
Eduardo Maranhão - CFO
Stuart Buchanan - Head of Investor Relations
This information is subject to the disclosure requirements
pursuant to Section 5-12 the Norwegian Securities Trading Act
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