Golar LNG Limited sells Golar Viking
February 16 2015 - 8:07AM
Golar LNG Ltd ("Golar" or
"Company") today announced the completion of the sale and delivery
of the 2005 built LNGC Golar Viking to PT
Perusahaan Pelayaran Equinox ("Equinox"). The transaction has been
concluded at a sale price of US$ 135 million. The vessel has been
re-named "Salju" under Indonesian flag and
Registry.
Under Indonesian Cabotage
regulations, LNG cargoes produced and sold within Indonesia must be
transported on an Indonesian flagged vessel. With an anticipated
increase in domestic allocation for Indonesian produced LNG cargoes
in 2015, Equinox believe the timing is right to acquire the Golar
Viking and transfer the vessel to Indonesian flag.
The growth in the Indonesian
domestic trade of LNG is the direct result of the recent
introduction of 3 new LNG Terminals which are supplied from LNG
production facilities at Bontang and Tangguh. The receiving
Terminals are the FSRU Nusantara Regas Satu (commenced operations
in Q2 2012) located in West Java, PGN FSRU (Q3 2014) located in
Lampung and the Arun Receiving Terminal in Aceh Province, scheduled
to commence operations in the first quarter of 2015.
FSRU Nusantara Regas Satu is owned
and operated by PT Golar Indonesia, a joint venture company between
Golar and Equinox's parent company.
The technical specification of
Golar Viking, now renamed Salju, is well suited for the short haul
nature of the domestic Indonesian trade. The transfer of ownership
and the anticipated future employment of the vessel recognises that
long haul sea borne trade will increasingly become dominated by
modern, larger and more efficient vessels providing greater
economies of scale. In connection with the sale, Golar has repaid a
secured bank loan of approximately USD 82 million. The sale was
concluded at the vessel's approximate book value as at December 31,
2014 and Golar therefore do not expect this transaction to
materially impact its first quarter results for 2015.
In addition to a limited amount of
equity initially invested in the transaction by Equinox, Golar have
provided a bridging loan facility. It is Equinox's intention
to refinance a majority of this debt with third party debt for
which Equinox already has commitments from banks. After
this, it is anticipated that approximately $53 million of the Golar
debt will be outstanding, secured with a second priority security
over the vessel. This debt will have a tenure of 10 years.
The return on this debt will be based on libor plus a blended
margin of 4%, with a further kicker driven by the ships actual
operational performance. Golar will also provide risk management
support to Equinox, thereby indirectly increasing the Company's
presence in the growing Indonesian domestic LNG trade. Golar
will work together with Equinox should the vessel be available for
international trade in the future.
"The sale of the vessel in support
of Equinox's aim of actively servicing Indonesian domestic LNG
shipping demand fits with our strategy of maximizing cash flows in
the currently challenging shipping environment. Golar's support to
Equinox strengthens the ties we have with our long term partners in
the important Indonesian market. The transaction further confirms
Golar's strategy of reducing the Company's exposure to the LNG
shipping market and focusing its investment in the FLNG business."
said Gary Smith, CEO Golar Management. Equinox view
this transaction as a major step in achieving their aim of
building on their long involvement in LNG and establishing Equinox
as a leading, first class Indonesian LNG ship owner and
operator.
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. All statements, other than statements of
historical facts, that address activities and events that will,
should, could or may occur in the future 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 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 in such 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. Unless
legally required, Golar undertakes no obligation to update publicly
any forward-looking statements whether as a result of new
information, future events or otherwise.
Among the important factors that
could cause actual results to differ materially from those in the
forward-looking statements are: changes in LNG, FSRU and
FLNGV market trends, including charter rates, ship values and
technological advancements; changes in the supply and demand for
LNG; changes in trading patterns that affect the opportunities for
the profitable operation of LNG carriers, FSRUs; and FLNGVs;
changes in Golar's ability to retrofit vessels as FSRUs and FLNGVs,
Golar's ability to obtain financing for such retrofitting on
acceptable terms or at all and the timing of the delivery and
acceptance of such retrofitted vessels; increases in costs; changes
in the availability of vessels to purchase, the time it takes to
construct new vessels, or the vessels' useful lives; changes in the
ability of Golar to obtain additional financing; changes in Golar's
relationships with major chartering parties; changes in Golar's
ability to sell vessels to Golar LNG Partners LP; Golar's ability
to integrate and realize the benefits of acquisitions; changes in
rules and regulations applicable to LNG carriers, FSRUs and FLNGVs;
changes in domestic and international political conditions,
particularly where Golar operates; as well as other factors
discussed in Golar's most recent Form 20-F filed with the
Securities and Exchange Commission. Unpredictable or unknown
factors also could have material adverse effects on forward-looking
statements.
Hamilton, Bermuda
February 16, 2015
Enquiries:
Golar Management Limited: + 44 207 063 7900
Brian Tienzo
Stuart Buchanan
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Golar LNG via Globenewswire
HUG#1894786
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