In light of the uncertain business environment caused by the Covid-19 virus situation, the board of directors of Höegh LNG has decided to take the following precautionary measures to preserve liquidity and reduce costs:
- Future dividends from Höegh LNG Holdings Ltd. are suspended in full until further notice.
- Bonus scheme for executive management and onshore personnel is suspended for 2020
- Implementation of a cost saving plan with special focus on overhead and vessel operating costs, targeting USD 9 to 11 million in savings for 2020, compared with the company’s original plans and budgets for this year. The estimated effect includes the elimination of bonus and other costs, as well as deferring costs, scheduled maintenance and projects to subsequent periods. Approximately one third of the estimated effect relates to costs being postponed to 2021.
- The impact of the Covid-19 crisis on the company’s operations and business outlook will be continuously monitored and evaluated, and further cost reduction and liquidity preservation measures could be implemented at future dates.
In addition, chairman of the board Morten W. Høegh and director Leif O. Høegh have waived their board remuneration for 2019, payable in 2020, including in the case of Morten W. Høegh also the board remuneration payable by Höegh LNG Partners LP.
The company has executed and signed the new up to USD 80 million revolving credit facility, which was announced on 14 January 2020. The facility is provided by three of the company’s relationship banks, and USD 65 million of the facility amount is earmarked for repaying the company’s HLNG02 bond loan which matures in June 2020 (of which USD 65 million is currently outstanding). 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.
Sveinung J. S. Støhle, CEO & President of Höegh LNG stated: “As reported on 24 March 2020, Höegh LNG’s operations and business development activities are running close to normal. However, the Covid-19 virus crisis is unprecedented in scale and uncertainty, and therefore the board and management are taking steps to preserve both the liquidity and solidity of Höegh LNG through these challenging times.”