Awilco LNG launches trading unit

Awilco announced on Friday that it has conditionally secured 251.3 million Norwegian krone, equivalent to approximately $26 million, in a private placement of new shares towards a “limited group of existing shareholdersand new investors.”

The company also announced further progress on its previously announced strategic trading initiative through ALNG Trading, and adjusted terms to its existing sale and leaseback agreements with China Development Bank Financial Leasing (CDBL).

“With the launch of ALNG Trading, we are establishing a trading and structuring platform led by experienced commodity traders and financiers,” Storheill said.

“Our vessels will support and complement these activities while benefitting from increased cargo access as the trading portfolio develops. Recent geopolitical developments confirm the potential for this combination,” he said.

In addition to the company’s vessels WilForce and WilPride, which currently operate in the spot market, the trading unit may also use third-party vessels.

Awilco has negotiated an amendment to its financing arrangements with CDBL, which includes a two-year amortization holiday in exchange for a prepayment of $5.25 million per vessel and an increase in margin from 2.50 percent to 2.65 percent during the non-amortizing period.

The amortization holiday “significantly” reduces the company’s cash break-even from approximately $56,800 per day to approximately $39,000 per day on average over the next two years, according to Awilco.

Following the two-year period, amortization will return to original levels, with deferred principal to be amortized over years four and five.

“Through this equity raise, revised vessel lease terms, and the launch of the trading business, we have completed the first phase of the strategic development and look forward to building the platform together with our new and existing shareholders,” Storheill said.