Source: Cheniere Energy Press Releases
Nov. 11… Cheniere Energy, Inc. (“Cheniere”) (NYSE MKT: LNG) announced today that it has entered into a Subscription Agreement with RRJ Capital II, Ltd. (“RRJ”) under which investment funds managed by RRJ will purchase, in aggregate, $1.0 billion of unsecured convertible PIK notes (the “Convertible Notes”) issued by Cheniere. RRJ will have the right to transfer a portion of the Convertible Notes to Temasek Holdings (Private) Limited and its affiliates (“Temasek”). Proceeds from the Convertible Notes will be used to fund a portion of the costs of developing, constructing and placing into service the Corpus Christi liquefaction project, which is being designed for up to three trains with an expected aggregate annual production capacity of approximately 13.5 mtpa, related pipeline infrastructure, and general corporate purposes.
The Convertible Notes will have a maturity of six and a half years, and accrue interest at a rate of 4.875% per annum, which is payable in kind (PIK) by increasing the principal amount of the Convertible Notes outstanding. The Notes will be convertible into the common stock of Cheniere at an initial conversion price of $93.64, which represents 130% of the closing price of the common stock of Cheniere on Monday, November 10, 2014.
“RRJ is making a substantial investment in Cheniere in connection with our Corpus Christi liquefaction project. RRJ was a significant equity investor in our Sabine Pass liquefaction project and we look forward to working with them again,” said Charif Souki, Chairman and CEO of Cheniere. “This investment satisfies a portion of the equity needed to finance the Corpus Christi liquefaction project. We continue to make progress on the Corpus Christi liquefaction project and expect to commence construction in early 2015.”
Richard Ong, Chairman and CEO of RRJ, said, “We are pleased to have this opportunity to deepen our involvement in Cheniere. We first invested in Cheniere’s LNG business in May 2012 and have been happy with the company’s performance to date.”
“This investment highlights our long term commitment to Cheniere and is consistent with our long term view about LNG as a clean energy source, and Cheniere’s strong position in that sector,” added Charles Ong, co-Chairman and co-CEO of RRJ.
Closing is expected to occur November 28, 2014 subject to customary closing conditions. Concurrently with closing, Cheniere will have entered into an indenture pursuant to which the Notes will be issued.
The offer and sale of the Convertible Notes has not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”) and the Convertible Notes may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act. This press release shall not constitute an offer to sell or a solicitation of an offer to buy the Convertible Notes or any other securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale of these securities would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Founded in 2011, RRJ Capital is an Asian based investment firm with offices in Hong Kong and Singapore. RRJ Capital currently manages two funds with an aggregate size of USD $5.9 billion, invested in companies in China, North America and Europe. RRJ Capital’s portfolio focuses on the following industries: energy, financial institutions, consumer, food and environmental services.
Incorporated in 1974, Temasek is an investment company based in Singapore, with a S$223 billion (US$177 billion) portfolio as at 31 March 2014. Temasek’s portfolio covers a broad spectrum of sectors: financial services; transportation, logistics and industrials; telecommunications, media & technology; life sciences, consumer & real estate; energy & resources. In addition to Singapore, Temasek has offices in 10 other cities around the world, including Beijing, Shanghai, Mumbai, Sao Paulo, Mexico City, London, and New York.
Nov. 11… Cheniere Energy, Inc. (“Cheniere”) (NYSE MKT: LNG) announced today that it has signed a binding commitment letter with EIG Management Company, LLC (“EIG”), whereby investment funds managed by EIG have agreed to purchase approximately $1.5 billion of convertible notes (the “Convertible Notes”). The Convertible Notes would be issued by a to-be-formed wholly-owned subsidiary of Cheniere, which would be the indirect owner of 100% of the equity interests in Corpus Christi Liquefaction, LLC and Cheniere Corpus Christi Pipeline, L.P. Proceeds from the Convertible Notes would be used as equity to fund a portion of the costs of developing, constructing and placing into service the Corpus Christi Liquefaction Project (the “Liquefaction Project”), which is being designed for up to three liquefaction trains with an expected aggregate annual production capacity of approximately 13.5 mtpa.
If issued, the Convertible Notes would have a maturity of ten years, and would accrue interest at a compounded rate of 2.75% per quarter. Interest on the Convertible Notes would be payable in-kind (PIK) from the closing date through the substantial completion of the third train of the Liquefaction Project and would be payable in cash thereafter. The Convertible Notes would be eligible for conversion into shares of common stock of Cheniere, par value $0.003 per share (“Cheniere Common Stock”), subject to conversion conditions and limitations to be provided in the final documents governing the Convertible Notes, at the option of Cheniere on or after substantial completion of Train 3 and at the option of EIG six months after substantial completion of Train 3, through one year prior to the maturity date.
“EIG has agreed to provide a significant portion of the equity component for the financing required on our Corpus Christi liquefaction project. EIG is a premier investor in energy infrastructure projects and we look forward to a long-term, productive working relationship.” said Charif Souki, Chairman and CEO of Cheniere. “We are continuing to make progress on our Corpus Christi liquefaction project and expect to commence construction in early 2015.”
“We are delighted to partner with Cheniere in the development of its Corpus Christi liquefaction project. Cheniere’s undisputed leadership in North American LNG development, and our belief in the global cost advantage of U.S. natural gas, made this an ideal opportunity for our funds,” said R. Blair Thomas, Chairman and CEO of EIG. “The globalization of natural gas through LNG, together with continued fuel substitution, makes natural gas attractive on a long-term basis, and companies like Cheniere are well-positioned to benefit.”
Closing of the purchase and sale of the Convertible Notes is subject, but not limited to, the execution of all definitive documentation, closing of the debt financing for the Liquefaction Project, funding of the initial equity contribution, and other conditions necessary to complete the transaction.