CoolCo plans to grow fleet with up to six LNG carriers

LNG carrier operator CoolCo, formed by Tor Olav Troim’s Golar LNG and Idan Ofer’s Eastern Pacific Shipping, has signed deals with units of EPS to add up to six liquefied natural gas carriers to its fleet.

To remind, the firm said in April it had completed the purchase of all eight TFDE vessels from Golar as part of a deal revealed in December.

In addition to these owned LNG carriers, CoolCo manages twelve LNG carriers and nine FSRUs.

Quantum Crude Tankers, an affiliate of EPS, owns four of these managed LNG carriers, namely Kool Orca, Kool Firn, Kool Boreas, and Kool Baltic.

As previously reported by LNG Prime, CoolCo’s largest shareholder EPS bought these LNG carriers from Dutch ING Bank and paid about $700 million for them. Russia’s Sovcomflot previously owned these vessels built between 2015 and 2021 and chartered by a unit of LNG giant Shell.

CoolCo said in a statement on Wednesday it plans to buy these four LNG carriers. The company aims to purchase four special purpose vehicles with contracted LNG carriers from Quantum Crude Tankers for about $660 million.

The company has agreed with EPS on the terms of a master sale agreement for the purpose of acquiring the SPVs, it said.

CoolCo said the agreed purchase price for the LNG carriers is in line with the price QCT paid for the vessels from ING Bank in May 2022.

Newbuilds

Besides these four LNG carriers, CoolCo has entered into an option agreement with an affiliate of EPS to acquire two shipbuilding contracts with South Korea’s Hyundai Samho Heavy Industries with deliveries in the first quarter of 2025.

“The options are exercisable before end of the second quarter of 2023 at an implied vessel valuation of $234 million each,” it said.

CoolCo did not reveal further information regarding these vessels.

Private placement

The LNG shipping firm said in a separate announcement on Thursday it had successfully placed a private placement, raising gross proceeds of about $270 million.

EPS Ventures, currently holding 16,000,817 shares or about 39.9 percent of CoolCo’s shares, has pre-committed to take shares worth about $135 million in the private placement.

The primary offering by CoolCo resulted in the allocation and issuance of 13,678,462 new common shares worth about $170 million, CoolCo said.

Also, the secondary offering of existing shares by Golar resulted in the allocation of 8,046,154 existing common shares, raising gross proceeds of about $100 million.

Following the sale, Golar will own around 4.5 million CoolCo shares, representing 8.3 percent of CoolCo.

CoolCo intends to use the net proceeds from the primary offering to finance the acquisition of the four LNG carriers.

“I am pleased to announce that CoolCo will be acquiring four well-specified contracted vessels on attractive terms from our principal shareholder, EPS,” Richard Tyrrell, CEO of CoolCo, said in the statement.

“Made possible by today’s successful equity offering, this acquisition will increase our owned fleet by 50 percent, increase our backlog by at least 100 percent, add two vessels with the latest 2 stroke technology, and provide longer-term charters that complement the shorter-term charters of our existing fleet,” he said.

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