Höegh Gallant Dropped Down
- Business & Finance
Norwegian owner and operator of LNG floating terminals Höegh LNG Holdings has agreed to sell the entity that owns the FSRU Höegh Gallant to its spin-off Höegh LNG Partners for a purchase price of USD 370 million.
The existing debt related to the Höegh Gallant is approximately USD 183 million and will continue to be outstanding. The purchase price will be settled by the cancellation of a USD 140 million demand note from Höegh LNG Partners to Höegh LNG Holdings, and the issuance of a seller’s credit of USD 47 million, due in 18 months with an interest rate of 8% per annum. The transaction is expected to be completed by the end of September 2015 and is subject to customary closing conditions.
Höegh Gallant is operating under a charter with the government-owned Egyptian Natural Gas Holding Company (EGAS) that expires in April 2020.
Additionally, Höegh LNG Partners has the right to cause Höegh LNG Holdings to charter the vessel from the expiry of the EGAS charter until July 2025 at a rate equal to 90% of the rate payable pursuant to the current charter.
Höegh LNG and Höegh LNG Partners continue to await the consent of the charterer as to the proposed drop down of the FSRU Independence.