LAUGFS Gas Group splits $ 42 m fund raising with People’s Bank, Standard Chartered Bank

Friday, 22 September 2017 00:00 - - {{hitsCtrl.values.hits}}

LAUGFS Gas Plc has split the previously announced $ 42.6 million for the Group’s Hambantota LPG terminal project between People’s Bank and Standard Chartered Bank.

Originally LAUGFS said it would secure the entirety of long-term funding via People’s Bank. Funding is to provide a corporate guarantee as security on behalf of LAUGFS Terminals Ltd., a wholly-owned subsidiary of LAUGFS Gas Plc.

The new move is to secure $ 22 million from People’s Bank and $ 20 million from Standard Chartered Bank on terms which are more beneficial to the company.

The move also enables LAUGFS Gas to provide two corporate guarantees instead of one.

LAUGFS Terminals Ltd. is currently involved in the construction of a LPG terminal facility with a storage capacity of 30,000 metric tons with export and import facilities at the Hambantota Port under the auspices of the Board of Investment and Sri Lanka Ports Authority.

The cost of the terminal is expected to be $ 75 million.

The loans are to be settled from income generated from the LPG Storage and Terminal Operation and LAUGFS Gas said it has no reason to believe that it will be called upon to make payment on the corporate guarantees as LAUGFS Terminals will be having capacity to service the banking facilities.

The banking facilities have been obtained upon normal commercial terms and in the ordinary course of business from local banks regulated by and subject to supervision of the Central Bank.

LAUGFS also said that the Related Party Transactions Review Committee is of the view that the transaction is on normal commercial terms and is not prejudicial to the interest of the entity and its minority shareholders and the Committee is not obtaining an opinion from an independent expert prior to forming its view on the transaction.