Golar LNG plans to sell 5.7 million of its common shares as it plans to settle its outstanding convertible bonds.
The offering would raise $135.6m at Golar LNG's closing priceof $23.79 per share on Monday. The shares were mostly unchanged in after-hours trading when the announcement was made.
The offering includes 215,000 common shares to be sold to an unidentified member of Golar LNG's board of directors. The underwriters will also have a 30 day option to purchase up to an additional 855,000 common shares.
Golar LNG said the proceeds of the offering will be used to partly fund the settlement of outstanding convertible bonds. Golar LNG has some $245m in outstanding convertible bonds which are due to expire March 2017. The new offering will also augment a Citibank term loan credit facility of up to $150m.
Arctic Securities analyst Erik Stavseth said the share sale will improve Golar LNG's liquidity by $270m to $300m, including the Citibank credit facility. The funds will be used to redeem the convertible bonds, Stavseth says, reducing overall debt and the potential for future convertible bond offerings.
"We see this as a clear positive as our view is that the underlying potential in (Golar LNG) should come to fruition over the coming years and hence benefit existing shareholders," Stavseth said.
Citigroup is acting as sole book-running manager. Clarksons Platou Securities, Danske Markets and Evercore ISI are acting as joint lead managers in the offering.
