CoolCo signs sale and leaseback deal for LNG newbuild duo

LNG carrier operator CoolCo has completed financing for two newbuild LNG carriers it purchased from its largest shareholder Eastern Pacific Shipping.

The company announced on October 18 it had entered into sale and leaseback financing arrangements with China’s Huaxia Financial Leasing, the leasing arm of Hua Xia Bank, for the Kool Tiger and Kool Panther newbuild vessels.

Furthermore, CoolCo said the sale and leasebacks are on a fixed rate per day basis for 10 years, with an implied interest rate just under 6 percent and a minimum loan-to-value of 80 percent.

Also, there is potential for additional capacity contingent upon the terms of the charter employment that CoolCo anticipates securing in advance of the vessels’ deliveries, it said.

With the sale and leasebacks now in place, CoolCo has fully financed the two ME-GA LNG carrier newbuilds, the firm said.

Deal strengthens cashflow potential and strategic capabilities

CoolCo’s CFO John Boots said the completion of financing “materially strengthens CoolCo’s future cashflow potential and strategic capabilities in a non-dilutive manner that clearly benefits our shareholders.”

“The combination of our robust financial position and a substantial backlog in charters provides us with considerable flexibility, both commercially and financially, enabling us to further grow the company,” he said.

“We believe that the near- and long-term opportunities in the LNG transportation market are substantial, supported by an increased emphasis on energy security and the dramatic expansion of global LNG production currently underway,” Boots said.

Moreover, he added that CoolCo’s fleet of modern LNG carriers positions the company and its shareholders “to be long-term beneficiaries of these durable trends.”

Hyundai Samho starts building Kool Panther

CoolCo exercised its option with affiliates of EPS Ventures in June to acquire newbuild contracts for two 2-stroke LNG carriers scheduled to deliver in second half of 2024.

CoolCo will pay $234 million for each of the LNG carriers and is still in talks with charterers to find work for the vessels.

South Korea’s Hyundai Samho is building these 174,000-cbm vessels and they feature GTT’s Mark III Flex membrane cargo tank system, reliquification, air-lubrication, and also shaft generators.

According to a social media post by CoolCo, Hyundai Samho recently officially started building the 174,000-cbm Kool Panther.

The shipbuilder held a steel-cutting ceremony on October 10.

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