Tag Archives: Teekay LNG Partners

ALNG-NO: Getting ready to ride the cycle (BUY, TP 5.6 [6.9])

The company today announced a restructuring and recapitalization of the balance sheet by deferring charter hire payments to Teeky LNG Partners and a private equity placement of USD ~25m through a book building process. As we touched upon in our initiation in late April, today’s announced pro-rata equity issuance is a positive surprise, although at a heavy discount to last close. The restructuring/ refinancing also alleviates the challenging liquidity position we forecast, with the low cash point now at USD 6m in 4Q19E (-17m in 2Q19E previously). Although issuing equity at P/NAV ~0.25 is highly dilutive to our per share valuation, shareholders’ interests are well covered by the pro-rata participation and subsequent offering. Add the positive effects of increased market cap., share liquidity and reduced balance sheet risk, we reiterate our BUY recommendation, but lower our TP to NOK 5.6 (6.9) due to the dilution .

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