LNG (ASX) Ann: Recommended Takeover Offer for LNGL

Originally posted by mwilson25: ↑

Micah got back to me.

I asked about whether LNG9 had the money for the offer and whether they can easily back out.

Here is his response.

LNG9 has (in the Bid Implementation Agreement) warranted to LNGL that it will have sufficient cash amounts available to it to pay the total consideration owing to LNGL shareholders.

Further details regarding LNG9’s sources of funds will be set out in the Bidder’s Statement that LNG9 will send all LNGL shareholders. This should also answer your final question.If the conditions in the BIA are not met, LNG9 will have the option of:

Letting the Offer lapse;• Waiving its 90% minimum acceptance condition and, provided the remaining conditions of the Offer are satisfied or waived, declaring the Offer unconditional, which would entitle LNG9 to acquire those shares tendered into the Offer; or• extending the offer period (for up to a maximum period of 12 months) to see if it can increase its level of acceptances.

If the Offer lapses:• LNG9 will not pay the Offer Price to any shareholders who have accepted the offer; and• LNGL will need to assess its options as a standalone entity. The risks currently facing LNGL, as outlined in the ASX announcement on the 28th of February 2020, would be likely to continue to apply.

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Thanks for posting this. Finance is likely to be an interesting challenge for LNG9. I guess it depends on what they had lined up before they launched their offer and how secure those arrangements are. The high-yield debt market in the US is dominated by energy companies and that looks set to get walloped, most probably making it difficult for smaller players to refinance as their debts mature. I guess we can't discount the Fed or US Govt helicoptering in some money to prop them up though.

As an aside, anyone notice that LNG9's website has Kakinada, Andhra Pradesh, India, as one of their two operations?
This appears to be via their affiliate Crown LNG, though I've found it difficult to verify any of the LNG9 group (LNG9, Katoil, Crown LNG & LNG Source) operating in this area. The reason I mention this is that Kakinada is where VGS Group proposed to set up their FLNG operation. VGS are the company that LNGL entered into a HOA with in 2017.
I have not been able to find any parties common to the LNG9 group and VGS so I'm not sure if this is just a coincidence.