Norway: Hoegh LNG Plans Private Placement to Fund Fleet Expansion

Höegh LNG (HLNG) plans a private placement of approximately USD 200 million in May to expand its fleet of LNG re-gasification vessels, with subsequent listing on Oslo Stock Exchange in June.

The market for LNG is developing favourably and the demand for new LNG production, shipping and re-gasification capacity is increasing. HLNG is looking to develop further the company’s strong position within the LNG industry. The Company has taken a pro-active role in this attractive market through the ordering of two new Floating Storage and Re-gasification vessels (FSRUs) and will pursue new business opportunities within the floating LNG market. Listing on the Oslo Stock Exchange is an important milestone in executing this strategy through improved access to the capital markets.

A Letter of Intent (LOI) with Hyundai Heavy Industries has been secured for the delivery of two FSRUs with option to take another two plus two vessels. The equity raised through the private placement will be used to fund the FSRU newbuildings in combination with debt financing arranged through a bank syndicate.

The Chairman of the Board, Morten W. Høegh, explains:

“We are pleased to have entered into a newbuilding agreement with Hyundai Heavy Industries for the delivery of two Floating Storage and Re-gasification Units, with options to expand with up to another four FSRUs, at favourable terms and delivery dates in this strong LNG market.

Listing HLNG is an important step in realizing the Group’s strategy and enabling the Company to grow and continue to develop as one of the leading providers of integrated floating LNG services.”

The President & CEO of HLNG, Sveinung Støhle, says:

“We see a very positive LNG market going forward, including a significant shift in demand from oil to natural gas leading to a rapidly growing demand for floating regas solutions. HLNG is a long established player with floating regas units in operation and is in a unique position to continue its active role in developing this favourable market segment.”

HLNG has appointed DnB NOR Markets, ABG Sundal Collier and Pareto Securities as Joint Lead Managers and Bookrunners for the upcoming transaction. Danske Bank and Nordea Markets have been appointed as Co-Managers.

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Source: Höegh LNG, May 5, 2011;