EPS and Golar form a new LNG carrier company
EPS and Golar is pleased to announce the formation of Cool Company Ltd., and the entry into a pre-commitment 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, according to the company's release.
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.
Golar intends to retain around 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 the CoolCo and will chair the Board of Directors.
Clarksons Platou Securities has acted as advisor to EPS and Golar.
Five listed LNG carrier companies have been taken private during 2021. Remaining listed peers have limited market exposure for modern tonnage. CoolCo aim to provide investors with attractive market exposure, dividend distributions, attractive organic growth and pursue industry consolidation.
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. Empowering that mission is a 5,000 strong and growing workforce across sea and shore. They oversee a versatile fleet of 190 vessels amounting to 19 million deadweight-tonnes across three core segments of containership, dry bulk, and tanker vessels. EPS’ shore team is fully integrated with in-house commercial, finance, innovation, IT, legal, manning, operations, and technical departments.
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 13, 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 consummated.