Business Context and Reporting Period
This Form 6-K filing by Golar LNG Limited (Golar) covers the month of January 2021. The report discloses two material merger transactions entered into on January 13, 2021, involving Golar's subsidiary Golar LNG Partners LP (GMLP) and its co-owned entity Hygo Energy Transition Ltd. (Hygo), with New Fortress Energy Inc. (NFE) as the acquirer.
Key Financial Metrics and Transaction Terms
The filing details specific financial terms for the proposed transactions but does not provide Golar's standalone revenue, profit, or cash flow metrics for the period.
- GMLP Merger Consideration: Each outstanding Common Unit of GMLP will be converted into $3.55 in cash. Golar owns approximately 30.8% of GMLP Common Units.
- General Partner Transfer: Golar will sell its 100% interest in the GMLP General Partner to NFE for $5,099,188 (equivalent to $3.55 per unit).
- Hygo Merger Consideration: Golar (50% owner) will receive 18.6 million shares of NFE Class A Common Stock and $50 million in cash. Stonepeak (50% owner) will receive 12.7 million shares of NFE stock and $530 million in cash.
- Termination Fees: GMLP may be required to pay NFE a termination fee of $9,424,849 under certain circumstances, plus up to $2,513,293 in expenses if the merger is not approved by unitholders.
Material Changes and Strategic Shifts
The filing represents a significant strategic restructuring for Golar, moving away from direct ownership of GMLP and Hygo toward a combination of cash proceeds and equity in NFE.
- Divestiture of GMLP: Golar will exit its direct ownership of GMLP Common Units and the General Partner, receiving cash for both interests.
- Hygo Exit: Golar will divest its 50% stake in Hygo, receiving a mix of cash and NFE equity.
- Management Services: An Omnibus Agreement will be entered into to provide management services for GMLP vessels post-merger.
Outlook, Risks, and Contingencies
The transactions are subject to numerous closing conditions and forward-looking risks.
- Closing Conditions: Both mergers require regulatory approvals, third-party consents, absence of legal restraints, and no material adverse effects. The GMLP merger specifically requires approval by a majority of GMLP Common Unitholders.
- Deadlines: The GMLP Merger Agreement may be terminated if not closed by July 13, 2021. The Hygo Merger Agreement has a similar deadline of July 12, 2021.
- Voting Support: Golar and the General Partner have agreed to vote their GMLP units in favor of the merger, though this obligation is modified if an "Adverse Recommendation Change" occurs.
- Risks: Risks include failure to obtain regulatory approvals, competing offers, and the possibility that the transactions may not be completed in a timely manner or at all.
Investor Verification Checklist
- Verify the final approval status of the GMLP Merger by GMLP Common Unitholders.
- Confirm receipt of all required regulatory approvals for both the GMLP and Hygo transactions.
- Monitor the closing dates to ensure they occur before the July 2021 termination deadlines.
- Review the final terms of the Omnibus Agreement regarding future management service fees for GMLP vessels.
- Assess the valuation of the 18.6 million NFE shares to be received by Golar in the Hygo transaction relative to NFE's market price at closing.