Singapore-based private company LNG-9 has withdrawn from a deal to buy the Australian export project developer LNG Limited.
The duo announced the all-cash takeover bid at the end of February. Under the deal, LNG Limited shareholders would have received $0.13 in cash per share.
However, in the meantime, LNG Limited failed to secure bridge financing from First Wall Street Capital Corp.
This deal was very important to keep the company afloat as it was running out of cash.
LNG-9 notified LNG Limited on Tuesday that it considers events including the failed bridge financing were “reasonably likely to have a material adverse effect” on the latter.
LNG-9 said that due to these developments certain conditions under the proposed takeover bid “have been triggered or are incapable of being satisfied”.
The Singaporean company does not intend to despatch its bidder’s statement to the LNG Limited shareholders. The company has taken off the table its takeover bid.
LNG Limited said it understands from LNG9 that the latter remains interested in acquiring all or a material part of its assets.
The duo would continue to work to find a mutually acceptable transaction structure.
Working on alternatives
LNG Limited is currently developing two LNG export projects in the U.S. and one in Canada.
These projects have a combined capacity of 20 million tonnes per year.
The Australian company said it was working with other parties on strategic alternatives.
These would help “supplement existing cash on hand to improve the company’s working capital position and sustain its operations.”
In addition, LNG Management Services, a U.S. unit of the company, has received a paycheck protection program loan.
The loan from the U.S. Small Business Administration amounts to $388,552.
LNG Limited said that its existing cash reserves are sufficient to meet all of the company’s commitments until May 2020.
But it “must secure additional meaningful funding urgently to continue operating beyond then,” it said.