To preserve liquidity and reduce costs during the Covid-19 pandemic crisis, the board of directors of Höegh LNG has suspended dividends to shareholders and bonuses to executive management and onshore personnel in 2020
A prominent owner of floating storage and regasification units (FSRUs), Oslo-listed Höegh LNG Holdings said it is looking to slash its budgeted overhead and vessel operating costs by as much as US$11M in 2020. That means eliminating bonuses and other costs and deferring scheduled maintenance and projects to subsequent periods. Approximately one third of the estimated effect relates to costs being postponed to 2021.
While the company reports its operations are ‘running close to normal’, Höegh LNG chief executive and president Sveinung J S Støhle said the belt-tightening steps were necessary “to preserve both the liquidity and solidity of Höegh LNG through these challenging times”.
The company held open the option to enact additional cost-cutting measures, depending on the impact of the Covid-19 crisis on its operations and business outlook.
Chairman of the board Morten W Høegh and director Leif O Høegh have waived their board remuneration for 2019, payable in 2020, including Mr Høegh’s board remuneration payable by Höegh LNG Partners LP.
Höegh LNG also announced a new US$80M revolving credit facility with three banks in January. The vessel owner has earmarked US$65M of the facility for repaying the company’s HLNG02 bond loan that matures in June 2020. The remaining part of the facility is for general corporate purposes. The facility is secured with a pledge of all of the company’s common units and its shares in the general partner of Höegh LNG Partners LP. As customary for these types of facilities, the available amount of the facility is linked to the value of the pledged units.