Summary
Cheniere Energy, Inc. (LNG) announced on April 21, 2010, through its subsidiary Cheniere FLNG, L.P., that it has entered into a Purchase and Sale Agreement to sell its 30% limited partner interest in Freeport LNG Development, L.P. ("Freeport") to an entity formed by Zachry American Infrastructure, LLC and Hastings Funds Management (USA), Inc. for $108 million in cash. This transaction represents a strategic divestment, allowing Cheniere to monetize a significant asset and potentially generate capital for other initiatives. The deal is subject to several closing conditions, including the Purchaser securing sufficient capital commitments and obtaining regulatory approvals. The transaction also includes customary provisions such as representations, warranties, and indemnification, with certain limitations on indemnification obligations. A "no-shop" clause is in effect, restricting Cheniere from soliciting or negotiating other similar transactions until the closing or termination of this agreement.
Key Highlights
- 1Cheniere FLNG to sell its 30% interest in Freeport LNG Development, L.P. for $108 million cash.
- 2The buyer is a special purpose entity to be formed by Zachry American Infrastructure, LLC and Hastings Funds Management (USA), Inc.
- 3The transaction is subject to securing capital commitments by the Purchaser (minimum $108 million) by May 20, 2010.
- 4Multiple closing conditions must be met, including the Purchaser acquiring a majority limited partner interest in Freeport and receiving antitrust clearance (Hart Scott Rodino).
- 5The agreement includes customary representations, warranties, and indemnification clauses, with indemnification capped at $25 million for Cheniere FLNG and the Purchaser.
- 6Cheniere is subject to a "no-shop" provision, preventing it from engaging in discussions for similar transactions until closing or termination.
- 7The agreement has termination rights for both parties, with a final termination date for unsatisfied obligations set at June 30, 2010.