US floating LNG player Excelerate Energy plans to exercise an option to buy the 2020-built FSRU Sequoia from Greece’s Maran Gas Maritime.
Excelerate took delivery of this 173,400-cbm vessel, its tenth FSRU, in June 2020 from South Korea’s Daewoo Shipbuilding and Marine Engineering.
Prior to that, the company and Maria Angelicoussis-led Maran Gas signed a five-year bareboat charter deal and the unit is currently located in Brazil.
Excelerate revealed in a statement on Monday that it intends to acquire the vessel, which is currently under a charter with a third party until mid-2025, by exercising a purchase option that it has with the vessel’s owner and for the purchase to be completed in April 2023.
In that regard, the FSRU player entered into a amended and restated senior secured credit agreement which includes a new $250 million term loan facility maturing on March 17, 2027.
Under the deal, Excelerate also extended the maturity date of its existing $350 million revolving credit facility to March 17, 2027, and required collateral vessel maintenance coverage to be not less than the greater of $750 million and 130 percent of the sum of the total credit exposure.
Excelerate said it will use proceeds from the term loan facility for the acquisition of the FSRU Sequoia, while it will use proceeds from the revolving credit facility primarily for letters of credit, working capital, and other general corporate purposes.
The commitments under the term loan facility expire on May 1, 2023 if the acquisition of the FSRU Sequoia does not occur by such date, it said.
“Refinancing our existing credit facility is a significant next step in our plans to improve our capital structure, and we would like to thank our lenders for their continued support and confidence in Excelerate,” Dana Armstrong, CFO of Excelerate, said in the statement.
She said that this amended credit facility enhances the company’s financial flexibility and supports its future growth and development initiatives.
“We are excited to acquire the FSRU Sequoia, one of the most capable vessels in the industry, at an attractive price well below current market values,” Armstrong said.
Exclerate currently operates ten FSRUs, one of the world’s largest fleets of such vessels, and these units are located around the globe, including in Europe.
The firm also ordered one FSRU in South Korea last year.