GLNG: Tangled Structure Clouds Golar Power Growth

Golar Treading Water Post Q3 Earnings. GLNG traded up ~1% late last week after posting relatively tepid Q3 results, regaining some early lost-ground following a disappointing headline number (below). While we continue to think GLNG looks washed out here ( ~0.7x our NAVe), we think a positive mean reversion remains dependent on Golar eventually simplifying their structure – a long-delayed process that could now kick off in H120. We hope…

Golar’s LNG Carrier Spin Entering Chinese Democracy territory. GLNG’s long-awaited LNG Carrier spin (the likely first step toward simplification) has officially been delayed to 2020 after the partnership structure between Golar and other participating owners collapsed – we believe Awilco & Cardiff Gas (at least at one point). As you may recall, we noted that Cardiff Gas had been marketing their PE-backed, on-the-water fleet separately since the early fall, which we viewed as a solid indicator that the potential consortium was in trouble.

Golar will now look to spin-off its LNG carrier fleet via a direct U.S. listing of the GLNG-only vessels, which is now set for 2020 (presumably H1). The perpetually sliding time frame has become a headwind for the stock, and an obstacle for simplifying the Golar structure. While the softer 2019 market has a lot to do with that delay, we think the clock is starting to tick pretty loudly at this point when it comes to GLNG executing a spin without taking a meaningful loss…

Spin Logistics. Our primary question/concern at this point revolves around how levered……

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