HOUSTON, Nov. 11, 2014
/PRNewswire/ -- 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.
Prior to the ninth anniversary of the closing date, the
Convertible Notes would be convertible into the common stock of
Cheniere (a "Conversion") (i) at the option of the Issuer, at any
time on or after the commercial operation date of the third
liquefaction train of the Liquefaction Project (the "COD"), so long
as no event of default has occurred and is continuing, at a price
per share equal to the lower of (x) a 10% discount to the average
of the daily volume-weighted average price ("VWAP") of the Cheniere
Common Stock, for the 90 trading-day period preceding the date on
which notice of Conversion is provided and (y) a 10% discount to
the closing price of Cheniere Common Stock on the trading day prior
to the date on which notice of Conversion is provided; and (ii) at
the option of the holders of the Convertible Notes, at any time on
or after the six-month anniversary of the COD, at a price per share
equal to the average of the daily VWAP of Cheniere Common Stock for
the 90 trading-day period preceding the date on which notice of
Conversion is provided.
Conversions would be subject to various limitations and
conditions, including (i) a minimum aggregate principal amount of
$250 million; (ii) the initial
Conversion could not exceed 50% of the aggregate principal amount
of the Convertible Notes then outstanding; (iii) the aggregate
number of shares of Cheniere Common Stock issued in all Conversions
could not exceed 19.9% of the number of shares of Cheniere Common
Stock outstanding as of the closing date; (iv) the total market
capitalization of Cheniere could not be less than $13.7 billion immediately prior to a Conversion;
(v) no prior Conversion could have occurred during the preceding 90
days; and (vi) limitations on the ability of the Issuer to effect a
Conversion if the Conversion would cause EIG, together with any of
its affiliates, to own, in the aggregate, 10% or more of the
outstanding Cheniere Common Stock.
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.
Cheniere Energy, Inc. is a Houston-based energy company primarily engaged
in LNG-related businesses, and owns and operates the Sabine Pass
LNG terminal and Creole Trail Pipeline in Louisiana. Cheniere is pursuing related
business opportunities both upstream and downstream of the Sabine
Pass LNG terminal. Through its subsidiary, Cheniere Energy
Partners, L.P., Cheniere is developing a liquefaction project at
the Sabine Pass LNG terminal adjacent to the existing
regasification facilities for up to six Trains, each of which is
expected to have a nominal production capacity of approximately 4.5
mtpa. Construction has begun on Trains 1 through 4 at the Sabine
Pass Liquefaction Project. Cheniere has also initiated a project to
develop liquefaction facilities near Corpus Christi, Texas. The Corpus Christi
Liquefaction Project is being designed for up to three Trains, with
expected aggregate nominal production capacity of approximately
13.5 mtpa of LNG, three LNG storage tanks with capacity of
approximately 10.1 Bcfe and two LNG carrier docks. Commencement of
construction for the Corpus Christi Liquefaction Project is
subject, but not limited, to obtaining regulatory approvals,
entering into long-term customer contracts sufficient to underpin
financing of the project, obtaining financing, and Cheniere making
a final investment decision. Cheniere believes that LNG exports
from the Corpus Christi Liquefaction Project could commence as
early as 2018.
EIG specializes in private investments in energy and
energy-related infrastructure on a global basis and has
$15.1 billion under management as of
September 30, 2014. During its
32-year history, EIG has invested over $16.6
billion in the sector through 300 projects or companies in
35 countries on six continents. EIG's clients include many of the
leading pension plans, insurance companies, endowments, foundations
and sovereign wealth funds in the U.S., Asia and Europe. EIG is headquartered in Washington, D.C. with offices in Houston, London, Sydney, Rio de
Janeiro, Hong Kong and
Seoul. For more information,
visit www.eigpartners.com.
This press release contains certain statements that may include
"forward-looking statements" within the meanings of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of
historical fact, included herein are "forward-looking statements."
Included among "forward-looking statements" are, among other
things, (i) statements regarding Cheniere's business strategy,
plans and objectives, including the use of proceeds from the
offering and the construction and operation of liquefaction
facilities, (ii) statements regarding expectations regarding
regulatory authorizations and approvals, (iii) statements
expressing beliefs and expectations regarding the development of
Cheniere's LNG terminal and pipeline businesses, including
liquefaction facilities, (iv) statements regarding the business
operations and prospects of third parties, (v) statements regarding
potential financing arrangements and (vi) statements regarding
future discussions and entry into contracts. Although Cheniere
believes that the expectations reflected in these forward-looking
statements are reasonable, they do involve assumptions, risks and
uncertainties, and these expectations may prove to be incorrect.
Cheniere's actual results could differ materially from those
anticipated in these forward-looking statements as a result of a
variety of factors, including those discussed in Cheniere's
periodic reports that are filed with and available from the
Securities and Exchange Commission. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. Other than as required under the
securities laws, Cheniere does not assume a duty to update these
forward-looking statements.
Logo -
http://photos.prnewswire.com/prnh/20090611/AQ31545LOGO
SOURCE Cheniere Energy, Inc.