The acquisition of new build LNG carriers
M&A Transactions – Gas & LNG
The Engagement:
Commercial Due Diligence
LNG newbuild vessels
The Client:
European Infrastructure Investment Fund
Duration:
2 months
Transaction summary
- Proposed acquisition of two 180,000 cubic meter new-build LNG carriers
- Vessels to be built in a major Korean shipyard for delivery mid-decade
- Our client wanted to assess partnering with a renowned ship owner for the provision of management services for the construction and contract life of the new build LNG carriers.
- Transaction supported by a long-term time charter contract with a major participant in the LNG markets, providing secure cashflows
Outcome
- Provided the client with full commercial due diligence to support the submission of a binding offer and to secure debt financing
- Detailed overview of the global LNG market and long-term LNG and gas supply and demand forecasts. Provided an overview of the LNG shipping sector
- Directional analysis of long-term LNG shipping rates
- Commercial review of commercial agreements including shipbuilding contracts and long-term time charter contracts (TCP), highlighting risk allocations and cost assumptions
- Provided commercial inputs into the valuation model including re-contracting rates at the expiry of the TCP