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Höegh LNG gets $223m in financing for seventh FSRU

Höegh LNG gets $223m in financing for seventh FSRU
Höegh LNG has received $223m commitments for 65% bank financing of its latest FSRU, #7, slated for delivery in Q1 2017, as it focuses on the sector.

Expected to be fixed at 3.8% interest, the new financing is the cheapest in the history of the company, with a 15 year amortization profile increasing to 75% and 20 years, respectively, upon securing a long term contract.

"With this transaction, Höegh LNG has once again secured competitive debt financing for its FSRU fleet expansion, and this time at the lowest cost ever achieved by the Company,” said president and ceo of Höegh LNG Sveinung JS Støhle. “The financing terms reflects the financial strength of Höegh LNG's balance sheet in addition to its position as the market leader in the FSRU segment."

The news supports Höegh LNG’s current strategy of mothballing its FLNG business in order to refocus efforts and capital on FSRUs, in response to low demand growth from LNG markets in the Asia coupled with an expected 40-45% capacity growth, to around 400m tons per year, by 2020.

Following the decision, the company made a $37.0m impairment of FLNG investments, wiping out profits and bringing the company to a $32.9m loss in Q4 2015, or a $26.7m loss for the full year, versus $59.2m and $92.9m, respectively, in 2015. Revenues rose to $219.3m for the full year 2015, compared with $161.5m in the previous year.

“We continue to see very favourable market conditions for the FSRU segment, driven by ample LNG supplies and low LNG prices, which is why Höegh LNG will focus on its objective of reaching 12 FSRUs by 2019,” said Støhle.