Golar LNG to offer $500 million in convertible notes due 2030

HAMILTON, BERMUDA - Golar LNG Limited (NASDAQ:GLNG), a $4.3 billion market cap company currently trading above its InvestingPro Fair Value, announced today its intention to offer $500 million in Convertible Senior Notes due 2030 through a private placement to qualified institutional buyers under Rule 144A of the Securities Act.

The company plans to grant initial purchasers a 30-day option to buy up to an additional $75 million in notes. Several company directors and officers have indicated interest in purchasing common shares from investors in the offering, while entities affiliated with directors have expressed interest in purchasing notes at the initial offering price. According to InvestingPro data, Golar operates with a moderate debt level, maintaining a debt-to-equity ratio of 0.72.

The notes will be senior, unsecured obligations maturing on December 15, 2030, with semiannual interest payments on June 15 and December 15. They will be convertible into the company’s common shares, cash, or a combination at Golar’s discretion.

Proceeds from the sale will be used to repurchase up to 2.5 million of the company’s common shares and for general corporate purposes. These purposes may include growth investments such as a contemplated fourth FLNG unit, MKII FLNG conversion costs, FLNG Hilli redeployment costs, debt repayment, and funding working capital and capital expenditures. With current EBITDA of $88.84 million and annual revenue of $257.92 million, analysts on InvestingPro expect both net income and sales growth this year. Get access to 10 more exclusive ProTips and comprehensive analysis with an InvestingPro subscription.

The notes and common stock issuable upon conversion have not been registered under the Securities Act or applicable state securities laws and may not be offered or sold without registration or an applicable exemption.

The announcement is based on a press release statement from the company, which noted that the transaction is pending and there is no guarantee it will be completed.

In other recent news, Golar LNG Ltd. has been the focus of analyst reports and project developments. Stifel analysts adjusted their outlook on Golar LNG, lowering the price target from $55.00 to $50.00, while maintaining a Buy rating. This adjustment came after Golar LNG announced a Final Investment Decision for the redeployment of the Hilli and a new contract for the first MK2 floating liquefied natural gas unit, which is under construction in China. The contract is expected to double the company’s EBITDA backlog and reduce capital expenditure risks. Despite the slightly less favorable terms of the contract, analysts view it as a positive step for Golar LNG’s financial future.

Additionally, Stifel maintained their Buy rating and $55.00 price target for Golar LNG, following developments in LNG projects in Argentina. YPF’s plans for LNG expansion in the Vaca Muerta region are expected to involve Golar’s specialized vessels. The Hilli and MK2 Fuji vessels, with their specific capacities, are poised to meet the requirements for these projects. Stifel’s analysis suggests that the deployment of these vessels could generate a combined EBITDA of $1.5 billion for Golar LNG, supporting a share price valuation in the range of $50 to $60. The firm’s outlook on Golar LNG remains positive, emphasizing the company’s strategic positioning and potential for growth in the LNG market.

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