Norwegian-based Höegh LNG has reached a deal to transfer the remaining 49% interest in the entities that own and operate the floating storage and regasification unit (FSRU) Höegh Grace to Höegh LNG Partners.
The share in Höegh LNG Colombia Holding, the sole owner of the entities that own and operate the vessel, would be sold for a price of USD 172.5 million, less USD 86.6 million in pro-rata indebtedness related to Höegh Grace expected to be outstanding at the closing date of the transaction.
HMLP intends to settle the purchase price with a combination of cash at hand and a drawing under its revolving credit facility granted by Höegh LNG. The purchase price will be subject to certain post-closing adjustments for net working capital.
The transaction is expected to be completed by the beginning of January 2018, subject to customary closing conditions.
“We are delighted to have reached an agreement with HMLP for the third drop-down to the MLP. Funded by a well-received offering of HMLP’s perpetual preferred equity earlier this autumn, the transaction demonstrates Höegh LNG’s diversified capital markets access,” Sveinung J.S. Støhle, President and CEO of Höegh LNG, said.
“With a leading position in the FSRU market, Höegh LNG remains committed to provide HMLP with further growth opportunities through accretive drop-downs of FSRUs on long-term contracts,” Støhle added.
HMLP purchased the initial 51% ownership interest in Grace Holding in January 2017 for a price of USD 188.7 million, less USD 96.9 million, the pro rata amount of indebtedness related to the Höegh Grace.
In a separate announcement, Höegh LNG informed that its profit for the three months ended September 30 was at USD 1.1 million, down from USD 8.5 million in the preceding quarter. The company reported EBITDA of USD 31.6 million for the third quarter, compared with USD 37.7 million for the previous quarter.
The decrease follows a provision made in relation to performance claims on Neptune and GDF Suez Cape Ann relating to the initial years when they were operated as LNG carriers. This had a negative impact of USD 11.9 million on Höegh LNG’s accounts, which was partly offset by the reversal of certain sales-tax-related accruals of USD 2.9 million.