New Fortress sells minority interest in Hilli FLNG
US floating LNG developer New Fortress Energy (NFE) said February 6 it had sold its minority interest in the Hilli floating liquefaction facility to Golar LNG in exchange for the return of 4.1mn NFE shares and $100mn in cash.
The return of the NFE shares from Golar reduces the number of NFE shares outstanding to about 204.7mn. As part of the transaction agreement, NFE will also extinguish $323mn in debt obligations associated with its interest in the Hilli.
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Subject to customary conditions, the transaction is expected to close in Q1 2023.
Wes Edens, CEO of New Fortress, said the transaction will allow NFE to focus solely on its wholly-owned FLNG portfolio and buy back NFE stock at an attractive premium.
“Golar has been a meaningful partner for the past several years and we have appreciated the opportunities to collaborate with them as we continue to advance NFE’s mission to bring more affordable, reliable and cleaner energy to customers around the world,” Edens said.
The transaction, Golar LNG CEO Karl Fredrik Staubo said, increases Golar’s share of cash flow generated from Hilli’s existing contract, which expires in July 2026.
“Improved market fundamentals for liquefaction capacity and Hilli’s market leading operational track record supports increased utilisation and earnings potential of Hilli upon re-contracting,” he said. “The transaction continues our company simplification, reducing our investments in listed securities whilst unifying the ownership of the FLNG Hilli.”
Following the transaction, Golar LNG will have no remaining shareholding in NFE.
The Hilli, a 2.4mn metric tons/year floating liquefaction facility, is currently operating offshore Cameroon for customers Perenco, an oil and gas company, and Cameroon’s national oil firm Societe Nationale des Hydrocarbures.