LNGL has over the last year evaluated many potential corporate and asset transactions to provide liquidity and value for shareholders and considers that the LNG9 offer is the most attractive offer currently available for LNGL shareholders.
The Directors of LNGL will therefore unanimously recommend that LNGL shareholders accept the Offer in the absence of a superior proposal being received. 2
Proposal highlights
LNG9 desires to acquire 100% of the outstanding LNGL shares, which includes all shares underlying the outstanding LNGL sponsored ADRs (LNGLY), and to potentially take the Company private.
Under the terms of the Offer, LNGL shareholders will receive
The Offer price approximates
The Offer represents a 72% premium to the closing price of LNGL's shares on the ASX of
The Offer is subject to LNG9 receiving acceptances in respect of at least 90% of ordinary shares and to other conditions summarized below.
Additionally,
Further details of the Offer, and of LNG9's intentions, will be set out in LNG9's Bidder's Statement.
Important points for LNGL shareholder consideration
The Offer is all cash.
The Offer represents a compelling premium to LNGL's current trading price.
At the current burn rate, LNGL's existing available liquidity is insufficient to sustain operations beyond the current quarter based on existing funds, or beyond the third quarter of 2020 inclusive of the bridge financing facility.
If the Offer conditions are satisfied or waived, shareholders who accept the Offer avoid the risk of LNGL entering administration or liquidation, which event would introduce risk of significant value loss resulting from, among other things, insolvency clauses existing in key
If the Offer conditions are satisfied or waived, shareholders who accept the Offer avoid the risk of substantial dilution associated with future LNGL fundraising(s).
If the Offer conditions are satisfied or waived, shareholders who accept the Offer avoid other inherent risks including satisfaction of all other milestones required to be achieved to allow
LNG industry competition remainsintense; current LNG markets are oversupplied and future increases in share value are not guaranteed, particularly in the short to medium term. While LNGL is excited by the LNG supply opportunity in
Bid Implementation Agreement
The BIA includes 'no shop', 'no talk' and 'no due diligence' restrictions on LNGL as well as notification and matching rights in the event of a competing proposal.
Bridge financing transaction details
LNGL has entered into a Senior Secured Convertible Note (Note) financing facility with the Lender.
The maximum face value of the Note facility is
LNGL may pre-pay amounts outstanding underthe bridge financing facility at any time subject to a make-good payment of the interest which would have accrued had such prepaid amount remained outstanding until the Maturity Date.
The Note facility is secured by a first priority, fully perfected security interest over a 49% limited partnership interest in
Drawdown under the Note facility is conditional on these security documents, and the Bid Implementation Agreement, being executed.
The Notes are convertible in whole or in part at Lender's option from the Closing Date until the Maturity Date.
If the Lender exercises its conversion right to convert in whole, LNGL will issue the Lender the maximum 86,500,072 shares available for issue under LNGL's ASX Listing Rule 7.1 capacity and, the lender must: pay LNGL the unfunded balance of
If the Lender exercises its conversion right of the then outstanding principal and accrued but unpaid interest (convert in part) at a date prior to funding the final drawdown and chooses to only convert that balance into new ordinary shares of LNGL, the Lender shall receive a number of shares based on various agreed and defined conversion prices between approximately
Upon exercise of the 'convert in part' conversion option by Lender, if the full number of 86,500,072 new ordinary shares are issued by LNGL in satisfaction of the conversion feature, then to the extent any balance remains owing under the Note facility, LNGL will repay such amount in cash.
If any issue of shares upon conversion of Notes is limited by section 606 of the Corporations Act, LNGL will convene a meeting of its shareholders to seek approval for the purposes of item 7 of section 611 of the Corporations Act.
Should a Termination Event pursuant to clause 8 of the BIA occur upon lapse or withdrawal of LNG9's bid, Lender may nominate a director to the board of LNGL while amounts are owing under the Note facility.
Additional details of the terms of the Senior Secured Convertible Note facility are contained in a binding Secured Convertible Note Subscription Deed between Lender and LNGL, a copy of which is attached to this release.
Contact:
Mr
Tel: +1 713 815 6920
Email: mhirschfield@lnglimited.com
ABOUT
LNGL is an ASX listed company (Code: LNG and OTC ADR: LNGLY) whose portfolio consists of 100% ownership of the following companies:
Disclaimer
Forward-looking statements may be set out within this correspondence. Such statements are only predictions, and actual events or results may differ materially. Please refer to our forward-looking statement disclosure contained on our website at www.LNGLimited.com.au and to the Company's Annual Report and Accounts for a discussion of important factors that could cause actual results to differ from these forward-looking statements. The Company does not undertake any obligation to update publicly, or revise, forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
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