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It
has been a target of the Board to set a distribution that is
sustainable for the long-term. Conservative assumptions have been
applied to long-run rates achievable by the Partnership's three carriers
currently exposed to the spot and short-term market. Similarly, a
cautious stance has been taken on the contract status and future rates
applicable in respect of the FSRU Golar Igloo. No future earnings are assumed in respect of the FSRU Golar Spirit
or from the acquisition of additional common units in Golar Hilli LLC.
In light of these conservative assumptions and to maintain sustainable
coverage levels for the foreseeable future, a distribution cut of 30%
was therefore considered necessary.
Golar
Partners is now well positioned financially. Distribution upside exists
in the event that the shipping market outperforms assumptions or the Golar Spirit
secures employment. Significant growth opportunities also exist
including additional units in Golar Hilli LLC and the 25-year contracted
FSRU Golar Nanook and associated Sergipe cash
flows. These opportunities will however, to a large extent, be dependent
on more effectively priced equity or realization of a flatter debt
amortization profile.
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