Bermuda-based LNG shipper Golar has entered into a pre-commitment agreement for the newly-formed firm Cool Company (CoolCo) to acquire its eight TFDE LNG carriers.
CoolCo wants to become a growth vehicle and consolidator of modern LNG carriers, Golar says.
If the transactions defined in this agreement are executed, CoolCo would acquire Golar’s eight tri-fuel diesel-electric LNG carriers. The plan is to raise equity and separately list the firm on Euronext Growth in Oslo at the start of 2022.
CoolCo will also buy the commercial and technical organization linked to the operation of Golar’s shipping and FSRU assets. Thus, it would become a fully integrated operating platform with the capacity for fleet growth.
The anticipated IPO proceeds will, together with a debt refinancing, ensure:
The outstanding contractual debt associated with the eight vessels was $858 million as of 30 September 2021.
Five listed LNG carrier companies became private during 2021. The remaining 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, said: “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.”
The deal is consistent with Golar’s plan to separate its shipping activities. It also aligns with the previously announced strategy to focus activities and growth on our market-leading FLNG business.
Eastern Pacific Shipping as the largest shareholder in CoolCo
In addition to a cash release, Golar intends to retain approximately one-third of CoolCo. Eastern Pacific Shipping ( EPS ), the Singapore-based privately-owned shipping company, has as part of the agreement pre-subscribed for $150 million in CoolCo equity based on an average TFDE ship valuation of $145 million.
This makes EPS the largest shareholder of CoolCo. Subject to market conditions, the agreement contemplates an equity private placement to outside investors during the first quarter of 2022.
Alongside Golar, EPS will take an active role in the further development of CoolCo and will chair the Board of Directors.
Cyril Ducau , CEO of EPS, 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.”
In addition, Clarksons Platou Securities has acted as advisor to EPS and Golar.