US-listed Golar LNG’s moves to restructure will not involve any full break-up of the group, the company’s chief financial officer Callum Mitchell-Thomson said.
In an interim results call the CFO and Golar management were pressed on the company’s comments in its statement that the Golar board had approved a range of specific options to re-organise the company into several different standalone businesses under its strategic review.
Mitchell-Thomson said the board has already given its approval for the company to target Golar’s four legs — floating storage and regasification units, floating LNG (FLNG), shipping and Golar Power.
He said that in the second quarter the team gave a range of options on the steps needed to achieve this and the board has selected some for Golar to pursue in more detail to see if they can be executed.
“And that’s what we are doing,” Mitchell-Thomson said, adding that final board approval would be needed on these.
Responding to analysts’ questions on the reorganisation he said: “We don’t see it as either imminent or a full break-up of the group. The broad picture of four standalone legs is where we are going.”
Asked which of the four business was in a more mature position for standalone financing, he pointed to the current seasonality in the shipping business.
“The shipping business is one of the ones where that is probably less on the spectrum of financing whereas pick any of the other business and they are probably equally standalone,” he said.
Analyst Michael Webber of Webber Research & Advisory pointed out that Golar's review had been going on for several years and asked if the company is likely to involve third-party capital in this iteration of it.
Mitchell-Thomson said agreements need to be struck and plans put in place, which in some cases involves other people and the board has given approval for those conversations.
But he refused to be drawn on the detail in advance of these discussions and the board’s decision.
Golar LNG chief executive Iain Ross said the restructuring will create opportunities for investable companies that are split by asset classes. He said this will create simplicity within the business and facilitate collaboration.
The CEO said the company’s joint venture Golar Power is looking at 15 opportunities to internationalise its business outside of Brazil, where the company has brought the Sergipe power plant onstream using an FSRU, and is progressing three other terminal projects, along with a range of small-scale opportunities.
Chief financial officer for Golar Power Eduardo Maranhao described Brazil as a “stepping stone” for the company’s global business plan.
He said the company is actively discussing with potential partners in South East Asia and sees opportunities for the development of its strategy in other parts of South America.
Among the priorities for the year, Ross said the company’s priorities will be to continue derisking its shipping and focus on concluding discussions with BP on its underway but now stalled conversion of its LNG carrier Gimi into an FLNG unit.
He said Golar will push its build out of small-scale LNG and develop the terminals at Barcarena and Suape in Brazil.
The company will also focus on concluding its refinancing activities and the simplification of the Golar group structure.
