LNG shipowner Cool Company (CoolCo) and Huaxia Financial Leasing have entered into sale and leaseback financing arrangements for two newbuild LNG carriers being built by Hyundai Samho Heavy Industries in Korea.
CoolCo exercised its option to acquire the newbuilds, to be named Kool Tiger and Kool Panther, from affiliates of EPS Ventures in June this year. The two ships will be delivered in the second half of 2024.
The two newbuilds have a cargo capacity of 174,000 cbm, a GTT Mark III Flex Membrane cargo tank system, reliquification, air lubrication, and shaft generators.
Each of the two vessels is being acquired under the pre-existing purchase option price of approximately $234m, a discount of approximately 10% to the current quoted market value for comparable newbuild vessels.
The initial exercise price is approximately $57m per vessel, while approximately $134m of the remaining $177m is due upon delivery of each of the vessels. The newbuilds will be funded with a combination of cash on hand, including cash from the sale of the Golar Seal, and debt financing for which CoolCo has received a commitment letter from a financing institution.
CoolCo said on Wednesday that the sale and leasebacks were on a fixed rate per day basis for ten years, with an implied interest rate of just under 6% and a minimum loan-to-value of 80%, with potential for additional capacity contingent upon the terms of the charter employment that CoolCo anticipates securing in advance of the vessels’ deliveries.
With the sale and leasebacks now in place, CoolCo claimed that it had fully financed the two LNG carrier newbuilds.
“We are pleased to have established this important relationship with Huaxia Financial Leasing and look forward to working closely with them over the long term. 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,” John Boots, CoolCo CFO, said.
