Announcement of Variable Dividend Policy
October 31 2022 - 2:55AM
October 31, 2022
Cool Company Ltd. (“CoolCo” or “the Company”,
ticker: COOL.OL) announced today that the Board of Directors has
approved the initiation of a dividend policy under which it intends
to allocate its free cash flow to equity primarily to the payment
of a quarterly dividend.
Following CoolCo’s formation in early 2022, the
Company has realized material benefit from its pure-play exposure
to a rapidly strengthening charter market for modern Tri-Fuel
Diesel Electric (“TFDE”) LNG carriers. Against CoolCo’s second
quarter 2022 Daily Time Charter Equivalent Earnings (“TCE”) of
approximately $62,000 per day and an all-in cash breakeven for the
fleet of approximately $54,000 per day, the Company has secured the
following vessel charters that materially increase CoolCo’s free
cash flow generation profile for an extended period:
- In April 2022, we agreed a 12-month charter at $120,000 per
day.
- In September 2022, we agreed a 12-month charter at $140,000 per
day.
- For a vessel due to enter the charter market during the fourth
quarter of 2022, a charter has been agreed at either approximately
$190,000 per day for one year or $120,000 per day for three years.
A three-year charter has been confirmed subject to charterer
vetting process.
- Advanced discussions on a second 3-year charter for a vessel
available in 1Q23 at prevailing market rates.
Richard Tyrrell, CEO of CoolCo, commented: “We
are pleased to have successfully executed our chartering strategy
against the backdrop of a sharply improving charter market. The
current market strength is being driven by a near-absence of
available vessel capacity globally, robust demand for modern
tonnage, and a renewed emphasis on energy security. In this
environment, the attractive charters that we have agreed throughout
2022 have materially improved our free cash flow generation moving
forward. We are also seeing strong inquiries in relation to our
remaining vessels coming open in 2023, the nearest of which
re-enters the charter market in April. On this basis, our Board of
Directors has determined that CoolCo is now prepared to enter the
next stage of our capital allocation strategy with the introduction
of a policy that includes a quarterly dividend, enabling our
shareholders to benefit from our fleet’s exposure to this
extraordinary market environment and our much stronger free cash
flow generation profile.
Under CoolCo’s newly introduced variable
dividend policy, the Company intends to allocate its free cash flow
to equity primarily to the payment of a quarterly dividend, after
allocations to drydocking and capital expenditures related to
improving vessel efficiency. The dividend policy is scheduled to
commence with effect from the fourth quarter of 2022, with an
initial payment expected to take place during the first quarter of
2023. The declaration and payment of dividends are at all times
subject to the sole discretion of the Company’s Board of Directors,
taking into consideration, among other factors, including but not
limited to the freight market outlook, the Company’s balance sheet,
market cyclicality, distributable reserves, liquidity requirements
and macroeconomic conditions.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking
statements which reflect management’s current expectations,
estimates and projections. All statements, other than statements of
historical facts, that address activities and events that will,
should, could or may occur in the future are forward-looking
statements. Words such as “believe,” “anticipate,” “intend,”
“estimate,” “forecast,” “project,” “plan,” “potential,” “will,”
“may,” “should,” “expect,” “could,” “would,” “predict,” “propose,”
“continue,” and similar expressions are intended to identify such
forward-looking statements. These statements include statements
relating to our dividend policy, cash flow generation, outlook,
expected results and performance, expected industry and business
trends including trends in LNG demand, LNG vessel supply and
demand, charter rates, contracting, utilization, regulation other
non-historical matters. These statements are not guarantees of
future performance and are subject to certain risks, uncertainties
and other factors, some of which are beyond our control and are
difficult to predict. Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted in such
forward-looking statements. You should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release.
Contact persons:
Richard Tyrrell, CEO
Email: richard.tyrrell@coolcoltd.com
Phone: +44 2076591111
John Boots, CFO
Email: john.boots@coolcoltd.com
Phone: +44 2076591111
This information is subject to the disclosure requirements
pursuant to Article 17 of the EU Market Abuse Regulation (MAR) and
Section 5-12 of the Norwegian Securities Trading Act.
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