Golar announces the formation of Cool Company Ltd. (“CoolCo” or “Company”), and the entry into a pre-commitment agreement, says a press release published on their website.
CoolCo target
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.
Acquisitions
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.
Attractive market exposure
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.
Clarksons Platou Securities has acted as advisor to EPS and Golar.
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Source: Golar LNG
