Cheniere Energy Inc (LNG)

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Carl Icahn Group Holds 8.18% of Cheniere Energy -- 2nd Update

Funds controlled by activist investor Carl Icahn disclosed an 8.18% stake in Cheniere Energy Inc. , saying its shares were too cheap.

The Icahn-led group, which amassed 19.4 million shares of Cheniere for a little over $1 billion , said it intends to have talks with the company's management and board about operations, capital expenditures, financing and executive compensation, according to a filing with the U.S. Securities and Exchange Commission.

Cheniere, which is based in Houston , is preparing to export the first major amounts of U.S. natural gas by sea later this year from a plant in the final phases of construction on Louisiana's Gulf Coast.

Mr. Icahn may also seek representation on the company's board, the filing notes.

The company's share price, down nearly 8% for the year, was up 5.7% to $68.50 in after-hours trading on Thursday.

A Cheniere spokeswoman didn't immediately respond to a request for comment. Efforts to reach Mr. Icahn weren't immediately successful.

Cheniere has obtained federal permits to export U.S. natural gas abroad by super-chilling it into liquid form so it can be loaded onto tankers. The company has signed deals with buyers to purchase the gas over 20 years and expects to ship its first cargoes as early as the end of 2015. It has also committed to building a second massive export facility near Corpus Christi, Tex. , which is estimated to cost up to $16 billion to build and finance.

Cheniere has lost money every year since it was founded almost 20 years ago, including in the second quarter, when it posted a loss of $142.3 million . But the company's contracts to sell gas promise to generate billions of dollars annually in steady cash flow once gas shipments begin, and it has a market capitalization of $15 billion .

Cheniere has also drawn fire from some shareholders and proxy advisory firms over its compensation practices. The company granted its chief executive, Charif Souki , a pay package valued at $142 million for 2013, making him one of the most highly paid executives in the country. Last year, Cheniere valued his pay at $7.7 million , and as of this year he no longer receives a salary.

Mr. Icahn is known for acquiring big stakes in companies and agitating for changes, and has shaken up the boards of directors at Chesapeake Energy Corp. , Transocean Inc. and CVR Energy Inc.

Maria Armental contributed to this article

Write to Josh Beckerman at [e-mail] and Daniel Gilbert at [e-mail]
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(END) Dow Jones Newswires
08-06-15 1957ET
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