Replies to post #44974 on TheGlobe.com Inc (TGLO)

[dinogreeves]

Yup Jab and thank you again for that reminder, the writing has been on the wall for quite sometime, just when they are ready to announce to the World. Makes you wonder why one would sell down here.

[JAB65]

Construction of a newbuild FLNG vessel will cost around $2bn, Delfin has said.

What's a million here, a million there?
"Project specific equity and debt components" cited another article from the boys. And another article I posted referenced projects having to move more towards a 50/50 split of debt/equity due to the current appetite by banks for debt. Traditionally, you would have an 80/20 or a 70/30 split. Assuming a worse case 50/50 split that means "around" 1 billion of equity injected for just the first FLNG to say nothing of Delfin having to build out the onshore component and refurbish the existing pipes that have been collecting all sorts of crap in the gulf over the past many years. Even 30% equity means a $600 Million capital infusion.

Some of that equity will be provided by Devon and other partners but to the tune of $1.0 Billion US??? I don't believe they can just create an LLC that will one day become a wholly owned subsidiary of $DGLO without creating (RM) the parent company who can oversee this first FLNG and others to come. Besides, the onshore costs etc. won't be singly allocated to the first FLNG. It makes no sense. It's possible that Delfin will privately fund this component, but it would make more sense to remove any liability from the Fairwood Family once this gets off the ground. It's my opinion, for what it's worth, that it makes the most sense to RM into TGLO day 1 and create the first FLNG wholly owned subsidiary at the same time. Then it's simple to just add additional FLNG LLC's tied to the parent, $DGLO as created.