The submitted question is not related to the agenda items of the General Meeting of Shareholders to be convened on 27 November 2019 and 12 December 2019.
On the other hand, the Company informs that, as a LNG terminal operator, will fulfill the requirement of the Law on the Liquefied Natural Gas Terminal of the Republic of Lithuania and will select the most economically advantageous tender for the acquisition of the floating liquefied natural gas storage facility.
The terms of the specific acquisition of FSRU and the final decision will be approved at a separate board meeting. The Company announced this in the notification of the material event on 5 November 2019. Reference to the material event:
The Company reminds that, 11 April 2018 Experts from the international company Pöyry Management Consulting presented a study stating that the estimated final price of the ship could range from 120 million to 160 million euros. The entire studio is accessible by clicking the following link: https://www.kn.lt/uploads/files/dir49/dir2/9_0.php
The submitted question is not related to the agenda items of the General Meeting of Shareholders to be convened on 27-11-2019 and 12-12-2019.
In addition, all warranties will be acquired through public procurement by the lowest price criterion. Information on guarantees and their values will be made public in the public procurement information system of the Republic of Lithuania in the manner and to the extent prescribed by law.
The basis for the issuance of the bank guarantee is the ship Lease Agreement dated 02 March 2012 between the Company and Höegh LNG Ltd (formerly Höegh LNG Limited) (hereinafter - the Agreement) and the 11 April 2014 Agreement of Novation between the Company, Höegh LNG Ltd and Hoegh LNG UAB Klaipėda (hereinafter - the Novation Agreement). By the Novation Agreement, part of the rights and obligations of Höegh LNG Ltd under the Agreement, with the exception of the rights and obligations arising from the Company's right of redemption of FSRU, were transferred to UAB Hoegh LNG Klaipėda. Accordingly, the Company has liabilities to both of these companies.
We note that if issued, the total value of the bank guarantee for both companies will not exceed 20 million. euros.
More detailed information on the Novation Agreement can be found in 11 April 2014 message:
https://newsclient.omxgroup.com/cdsPublic/viewDisclosure.action?disclosureId=604219&messageId=748287
The submitted question is not related to the agenda items of the General Meeting of Shareholders to be convened on 27-11-2019 and 12-12-2019. In addition, requested information is confidential.
Please note that the Company uses independent qualified experts services to determine the value of the Subačius Oil Terminal.
KN borrowing costs will directly depend on the amount planned to borrow. They are not clear at the moment. We note that the Company's borrowing costs will be reimbursed through the LNG Security component.
During the General Meeting of Shareholders convened on 12 December 2019, it is proposed to adopt new additional resolutions providing alternative possible guarantees provided by the Company for guarantees specified in the agenda of the meeting of 27 November 2019.
The management of the Company, in negotiating the terms of the borrowing, already after 27 November 2019 meeting has been convened identified an additional possible decision on the structure of the guarantee for the State guarantee. Accordingly, the Company seeks to provide its shareholders with two alternatives (at the meetings of 27 November 2019 and 12 December 2019) regarding the structure of pledge (guarantees) for the State guarantee.
Jonas Lenkšas, Chief Financial Officer, +370 694 80594.
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