LNG carrier operator CoolCo, formed by Tor Olav Troim’s Golar LNG and Idan Ofer’s Eastern Pacific Shipping, has signed another charter deal for one of its eight TFDE vessels.
CoolCo said in a statement on Monday it had agreed the deal for a vessel due to enter the charter market during the fourth quarter of 2022 at either about $190,000 per day for one year or $120,000 per day for three years.
The LNG shipping firm said that a three-year charter had been confirmed subject to charterer vetting process.
Besides this deal, CoolCo is in “advanced discussions on a second three-year charter for a vessel available in the first quarter of 2023 at prevailing market rates,” it said.
CoolCo did not reveal any additional information regarding the charters.
Prior to these moves, CoolCo chartered one vessel for a period of 12 months at around $140,000 per day.
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, according to its website.
Variable dividend
CoolCo announced today that it had approved the initiation of a variable dividend policy.
Under CoolCo’s newly introduced policy, the company intends to allocate its free cash flow to equity primarily to the payment of a quarterly dividend, after allocations to drydocking and capital expenditures related to improving vessel efficiency.
CoolCO expects the dividend policy to start from the fourth quarter of 2022, with an initial payment during the first quarter of 2023.
Also, the declaration and payment of dividends are at all times subject to the sole discretion of the company’s board of directors, taking into consideration factors such as freight market outlook, the company’s balance sheet, market cyclicality, and macroeconomic conditions, the firm said.
Richard Tyrrell, CEO of CoolCo, said in the statement that the company had successfully executed its chartering strategy against the backdrop of a “sharply improving” charter market.
He said that a near-absence of available vessel capacity globally, robust demand for modern tonnage, and a renewed emphasis on energy security currently drives the market.
“In this environment, the attractive charters that we have agreed throughout 2022 have materially improved our free cash flow generation moving forward. We are also seeing strong inquiries in relation to our remaining vessels coming open in 2023, the nearest of which re-enters the charter market in April,” he said.
On this basis, the company has decided to introduce the new policy that includes a quarterly dividend, enabling “our shareholders to benefit from our fleet’s exposure to this extraordinary market environment and our much stronger free cash flow generation profile,” Tyrrell said.
