Summary
Cheniere Energy, Inc. (LNG) filed an 8-K on June 1, 2007, detailing significant financial transactions related to its convertible senior notes and a new credit facility. The Company has irrevocably committed to exercising its call options to repurchase 9,175,595 shares of its common stock from Credit Suisse International at $35.42 per share, totaling $325 million. This action is to be settled physically, meaning the company will purchase shares rather than settle for cash. Concurrently, Credit Suisse has the option to sell up to 9,175,595 shares back to Cheniere at $70.00 per share on July 23, 2007, also with physical settlement. These actions are directly linked to the management of the Company's 2.25% Convertible Senior Notes due 2012.
Key Highlights
- 1Cheniere Energy has committed to repurchasing $325 million worth of its own common stock (9,175,595 shares) from Credit Suisse at $35.42 per share.
- 2The share repurchase is an irrevocable commitment by Cheniere and will be settled physically (stock for stock).
- 3Credit Suisse has a corresponding option to sell up to 9,175,595 shares back to Cheniere at $70.00 per share on a specific future date (July 23, 2007), also for physical settlement.
- 4These transactions are related to Cheniere's 2.25% Convertible Senior Notes due 2012.
- 5Cheniere has secured a new $400 million credit facility with Perry Principals Investments LLC, an affiliate of a significant shareholder.
- 6Proceeds from the new credit facility will partially fund the $325 million share repurchase.
- 7The transactions indicate a strategic move by Cheniere to manage its convertible debt and potentially reduce outstanding shares.