Golar LNG to pursue spinoff of Trifuel Diesel Electric LNG carrier business
Golar LNG announced yesterday that its board decided to proceed with a spinoff of the company's Trifuel Diesel Electric LNG carrier business, subject to satisfactory market conditions, and to focus the company's future activities primarily around FLNG and downstream assets. This will allow LNG shipping investors more direct exposure to the LNG shipping market and reposition Golar's core business toward LNG infrastructure on long-term contracts, the company said. Golar LNG added: "The board of directors is pleased with the work done to date in underpinning the business with key projects. The board is however humble to the fact that these achievements have not yet been positively reflected in the company's share price. We believe that separation of the company's assets into two entities will better position both companies. A stock price that reflects the true strategic and contracted value of the underlying assets is a key condition to be able to grow a company. After a period of rapid expansion and significant capital investment to build the foundation, it is time to reap the $10.3B gross contract earnings backlog and implement stronger capital discipline with full focus on ROI. We see substantial potential for cash flow improvement through increased utilization of existing assets. In repositioning Golar as a solid long-term cashflow business from projects that create large cost and environmental benefits for our customers the company expects to materially broaden investor interest. With an LNG growth rate of approximately 10% pa, a gross contract earnings backlog of $10.3B, strong growth in contracted earnings, a well-financed balance sheet, a unique market leading position in FLNG, integrated power projects and a solid pipeline of opportunities, the board is increasingly optimistic about the future."