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Golar announced on Wendesday that it intends to offer, subject to market and other conditions, $500 million aggregate principal amount of convertible senior notes due 2030 in a private placement to qualified institutional buyers.
The company also intends to grant the initial purchasers of the notes a 30-day option to purchase up to an additional $75 million aggregate principal amount of the notes in connection with the offering.
In connection with the offering of the notes, certain of the company’s directors and officers have provided an indication of interest to purchase the company’s common shares from investors in the offering of the notes, Golar said.
Also, certain entities controlled by or affiliated with the company’s directors have provided an indication of interest to purchase notes at the initial offering price, it said.
The notes will be senior, unsecured obligations of the company, pay interest semiannually in arrears on June 15 and December 15, mature on December 15, 2030, and be convertible into the company’s common shares, cash, or a combination of shares and cash, at the company’s election.
Golar said it intends to use the net proceeds from the sale of the notes to repurchase up to 2.5 million of the company’s common shares in connection with the offering of the notes.
The company also intends to use the proceeds for general corporate purposes, which may include, among other things, future growth investments, including a contemplated fourth FLNG unit, MKII FLNG conversion costs, FLNG Hilli redeployment costs, repaying indebtedness, and funding working capital and capital expenditures.
FLNG growth
Earlier this week, Golar said it had signed a final engineering study to confirm EPC price and delivery for a 5 mtpa MKIII FLNG.
The company announced this in a statement on Monday, revealing that FLNG Gimi has reached the commercial operations date (COD) for its 20-year lease and operate agreement for the BP-led Greater Tortue Ahmeyim (GTA) project, offshore Mauritania and Senegal.
Golar said the COD triggers the start of the 20-year lease and operate agreement that unlocks the equivalent of around $3 billion of Adjusted Ebitda backlog.
Following the achieved COD of FLNG Gimi and announcement of the two FLNG charters in Argentina in May, Golar is accelerating work on its next FLNG unit(s).
“We continue to advance commercial discussions, with charterer demand guiding design choice of the fourth FLNG unit,” the company said.
“In addition to the 3.5 mtpa MKII option at CIMC Raffles shipyard, Golar has signed a final engineering study to confirm EPC price and delivery for a 5 mtpa MKIII FLNG and is updating price and schedule for an up to 2.7 mtpa MKI FLNG,” Golar said.
Golar currently has two operational floating LNG units, which were converted from LNG carriers, including the 2.7 mtpa FLNG Gimi, which is located at the GTA hub offshore Mauritania and Senegal.
Moreover, Pan American Energy, Golar LNG, YPF, Pampa Energia, and Harbour Energy recently took a final investment decision for the Southern Energy floating LNG export project in Argentina in May.
Under a 20-year charter deal, the 2.4 mtpa FLNG Hilli, which is currently located offshore Cameroon, will work for Southern Energy (SESA) offshore Argentina.
In addition, Golar and SESA have signed definitive agreements for a 20-year charter for the 3.5 mtpa MKII FLNG, currently under conversion at CIMC Raffles shipyard in Yantai, China.
This charter remains subject to FID.