Hoegh LNG Holdings Ltd. (Hoegh LNG or the Company) announced Thursday an agreement to sell the entity that owns the FSRU Hoegh Gallant to Hoegh LNG Partners LP (HMLP or the Partnership) for a purchase price of $370 million, subject to certain post-closing purchase price adjustments. The existing debt related to the Hoegh Gallant is approximately $183 million and will continue to be outstanding. The purchase price will be settled by the cancellation of a $140 million demand note from HMLP to Hoegh LNG and the issuance of a seller's credit of $47 million, due in 18 months with an interest rate of 8 percent per annum. The transaction is expected to be completed by the end of September and is subject to customary closing conditions.
Hoegh Gallant is operating under a charter with the government-owned Egyptian Natural Gas Holding Company (EGAS) that expires in April 2020. Additionally, HMLP has the right to cause HLNG to charter the vessel from the expiry of the EGAS charter until July 2025 at a rate equal to 90 percent of the rate payable pursuant to the current charter.
The transaction has been approved by the Board of Directors of the Company as well as the Board of Directors of Hoegh LNG Partners.
Sveinung J.S. Stohle, president and CEO of Hoegh LNG, stated "We are delighted to have reached an agreement with HMLP for the first drop-down into the MLP. Hoegh LNG has a strong pipeline of drop-down candidates, making HMLP a robust vehicle for funding our FSRU expansion already under way, and where we continue to see very strong market growth in the coming years."
Transfer of FSRU Independence to HMLP - Update
Hoegh LNG and HMLP continue to await the consent of the charterer as to the proposed drop down of the FSRU Independence. No assurance can be given at this point regarding the timing of such consent or terms of such transaction.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles
From the Career Center
Jobs that may interest you