Oz LNGL Administrator Seeks Advice on Next Move

The administrator for Australia’s LNG Limited (LNGL) said June 30 it has applied to the Supreme Court of Victoria for judicial advice before deciding whether to seek buyers for its remaining assets.

The administrator, PwC Australia, wants advice on whether it should seek expressions of interest for either a recapitalisation of the company or one or more transactions involving its remaining assets. The court hearing will be held virtually on July 8.

PwC Australia said it undertook an assessment of the solvency of the company after its key US asset, the 8.8mn mt/yr Magnolia LNG project in Louisiana, was sold in June, but was unable to see a clear path forward.

“At present, it is unclear whether the company is solvent or insolvent, primarily due to uncertainty as to (i) the quantum of valid creditor claims and (ii) the value that may be realised for the group’s remaining assets,” PwC Australia said in a statement posted to LNGL’s website.

The question of solvency, PwC said, would probably not be determined until a second meeting of LNGL’s creditors, where they will decide the company’s future. No date has been set for the second meeting, but it must be held by September 4.

“In circumstances where all of the directors of the company have resigned, the administrators consider that the most appropriate course of action is to explore options for a recapitalisation or asset transaction(s) through the Stage 2 process for the benefit of creditors, and if there is ultimately a surplus after payment of creditors, for the benefit of shareholders,” PwC said.

LNGL’s remaining assets include the 10mn mt/yr Bear Head LNG project in Nova Scotia, the 62.5-km Bear Paw pipeline project, also in Nova Scotia, which would deliver feed gas to Bear Head, and four dormant Australian subsidiaries: LNG International, LNG Technology, Mayflower LNG and North American LNG.