May 6 (Bloomberg) -- Cheniere Energy Inc., a liquefied natural-gas importer that has lost money for 13 consecutive years, may have to sell assets and restructure debt to avoid running out of cash as soon as next year.
Cheniere’s cash and near-cash equivalents declined by $50 million during the first three months of this year, ending the quarter at $24.5 million, the Houston-based company said today in a statement. Cheniere has a $298 million loan payment due in May 2012, according to data compiled by Bloomberg.
“At the heart of our concern is how will they finance the maturities that come due in 2012,” Mark Habib, a credit analyst at Standard & Poor’s in New York, said today in a telephone interview. “There aren’t a lot of options left open to them other than some sort of distressed debt exchange or default.”
U.S. gas-import terminals built during the past decade have languished as new drilling techniques unlocked domestic supplies, pushing prices too low to justify costlier imports from overseas. Cheniere’s 9.75 percent, $400 million term loan issued in 2007 matures in May 2012, according to Bloomberg data.
Between now and May 2012, “we expect to continue to restructure our finances and improve our capital structure,” the company said. In addition to sales of unnamed assets, Cheniere’s options include refinancing existing debt, issuing equity or other securities, and “entering into long-term commercial agreements,” according to the statement.
Cheniere’s cash reserves are at their smallest since the third quarter of 2004, according to data compiled by Bloomberg. Katie Pipkin, Cheniere’s vice president of finance and investor relations, said in an e-mail the company has $29.4 million in accounts receivable that together with the cash reserve raises “available liquidity” to $53.9 million.
Cheniere shares more than tripled in the past year as the company took steps to convert its Gulf of Mexico gas-import terminal into a facility that would liquefy the fuel for export aboard tanker ships. The company is awaiting a federal regulatory decision on its request for permission for the project.
The export facility in Cameron Parish, Louisiana, will cost an estimated $400 per-ton-of-capacity, Cheniere said. This will amount to $6.4 billion for the project, according to Bloomberg calculations. A final investment decision won’t be made until the company signs up customers to use at least 3.5 million tons of the facility’s planned 16 million tons of annual liquefaction capacity, according to the statement.
So far, none of Cheniere’s eight non-binding memoranda of understanding with potential customers have resulted in actual contracts, according to the statement.
Cheniere has $298 million outstanding on the loan due in May 2012 after making a $102 million pre-payment in June, data compiled by Bloomberg showed.
The company also said today its first-quarter loss widened to $39.8 million, or 60 cents a share, from $35.2 million, or 64 cents, a year earlier. One analyst in a Bloomberg survey estimated a loss of 87 cents.
Cheniere rose 12 cents, or 1.5 percent, to $7.90 at 4:15 p.m. in New York Stock Exchange composite trading.
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