Eastern Pacific Shipping-led CoolCo is planning to buy up to six LNG carriers from its parent for $660m and is planning to raise $270m to help fund the purchase of four of them from a private placement.
CoolCo, a recently formed LNG carrier owner, said it intends to use the net proceeds from its share sale to finance the equity portion of a planned acquisition of the four vessels from EPS affiliate Quantum Crude Tankers.
The company named a pair of the vessels as a modern two-stroke duo, the 174,095-cbm Kool Firn (ex-SCF Barents, built 2020) and Kool Orca (ex-SCF Timmerman, built 2021). Also in the deal are two dual-fuel diesel-electric LNG carriers, the 170,200-cbm Kool Boreas (ex-Mitre, built 2015) and the Kool Baltic (ex-SCF Melampus, built 2015).
The four ships, which were formerly controlled by Russian shipowner Sovcomflot (SCF Group), were bought by EPS’s interests from ING Bank in May 2022.
CoolCo said the purchase prices are “in line” with what EPS paid for the quartet in May.
All four vessels are on long-term charter to energy major Shell and are already under technical management with CoolCo.
In addition to its planned acquisition of the quartet, Oslo-listed CoolCo said it inked an option agreement with two affiliates of EPS to buy two LNG newbuildings under construction at Hyundai Samho Heavy Industries for delivery dates in the first quarter of 2025.
These newbuildings, which were originally ordered by Nigeria’s Bono Energy in February 2022 for $223.6m each, were bought by EPS in June at around $231.7m per vessel.
The options have to be exercised before end of the second quarter of 2023 and are valued at $234m each.
Together the six vessels would boost CoolCo’s fleet to 14 LNG carriers.
The company, which reiterated that it is considering a dual listing by late 2022 or early in 2023, said it is planning to raise up to $270m in a private placement comprising $170m from a new share issue and $100m from a secondary share sale of existing shares by Golar LNG.
The purchase of the four LNG carriers will be funded through the private placement and the existing loan facility of around $500m on the ships.
CoolCo said EPS Ventures, which currently holds just over 16m shares equating to approximately 39.9% of CoolCo’s stock has pre-committed to buy $135m of the offer shares in the placement.
Joint global coordinators for the offering — Clarksons Securities, DNB Markets and Fearnley Securities —have received indications of interest to subscribe for shares offered in the private placement so that it is entirely covered at the start of the application period, which closes on Thursday.
Updating on the market in a presentation, CoolCo said time-charter equivalent earnings for its eight-vessel tri-fuel diesel-electric LNG fleet came in at around $73,000 per day.
Fleet utilisation was 95% during the quarter.
The company flagged up the recent one or three-year deal on one of its vessels at $190,000 per day or $120,000 per day respectively and the “advanced discussions” on a second three-year charter on its LNG carrier which falls open in the first quarter of 2023.
It said its next ship comes open in April 2023.
