Golar LNG Ltd has received an underwritten financing commitment for its first GoFLNG project from CSSC (Hong Kong) Shipping Co. Ltd (CSSCL) in relation to a conversion financing and sale and leaseback transaction for the GoFLNG Hilli.
The financing structure will fund up to 80% of the project cost and will be split into two phases. The first phase enables Golar LNG to drawdown up to US$700 million from the facility to fund the ongoing conversion cost, once Golar LNG has spent US$400 million of the estimated US$1.2 billion conversion cost and the tolling contract with Perenco and SNH have been ratified by the Cameroon government, (this is expected during 3Q15).
Golar LNG has spent approximately US$385 million against the conversion project to date. Therefore, the company expects that the equity threshold required to trigger the financing arrangement will be reached shortly. This financing means that following the Cameroon government ratification, no further Golar direct funding for the Hilli conversion will be required, with the remainder of the conversion project being financed through this new debt facility.
The second phase will be triggered upon the delivery of the converted GoFLNG Hilli from Keppel Shipyard and the satisfaction of certain additional performance milestones. This will allow for the drawdown of up to a further US$260 million, giving an aggregate US$960 million, representing 80% of the project cost. The financing has a tenor of 10-years, a 15 year amortisation profile and contemplates the eventual sale of GoFLNG Hilli to Golar LNG Partners. The expected cost of the financing during the conversion period is 6.25%, while the long-term financing is projected to cost less than 6% on a fully swapped ten year basis.
Golar LNG said that securing this financing is an important step in realising the company’s Integrated LNG Mid-Stream Services Strategy. The financing will also ultimately enable the release of Golar equity for application on other GoFLNG programmes.
Edited from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/floating-lng/21072015/golar-lng-receives-financing-commitment-for-goflng-hilli-1046/