Norwegian LNG transportation provider Awilco LNG has agreed with its main creditor Teekay LNG Partners on a refinancing package which includes restructuring of existing charters and sale of new shares in an effort to re-establish a “robust financial platform.”
The private placement of the company’s shares, directed towards Awilco LNG’s existing shareholders and potential Norwegian and international investors, is expected to raise NOK 215 million (USD 25 million).
In connection with the private placement, the company inked a deal with Teekay LNG which includes an extension of the current bareboat charters for the company’s two vessels, WilForce and WilPride, to December 31, 2019.
In addition, the agreement includes an option for early termination and refinancing of the vessels at any time before maturity of the contracts.
Furthermore, the amended agreement also includes a front-loaded reduction in the bareboat rate payable to Teekay through the deferral of up to USD 29 million in charter hire to Teekay LNG. The deferred amounts will become payable at maturity of the contracts. The amendments to the contracts with Teekay LNG are subject to, inter alia, completion of the private placement in the minimum amount of USD 25 million, the company said.
“The net proceeds from the private placement will be used to strengthen the company’s balance sheet and liquidity position, and secure final agreement with Teekay LNG,” Awilco LNG noted.
The application period started on May 18 and the minimum order in the private placement has been set to the number of shares that equals a total purchase price of the NOK equivalent of EUR 100,000.
During the first quarter of this year, Awilco LNG suffered a net loss of USD 10.4 million, compared to a net loss of USD 4.6 million in 1Q 2016.