Sec Form 13D Filing - GOLAR LNG LTD filing for Golar LNG Partners LPGolar LNG Partners LP - 2021-01-26

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

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SCHEDULE 13D/A

Under the Securities Exchange Act of 1934

(Amendment No. 10)*

Golar LNG Partners LP

(Name of Issuer)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

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** Calculation of percentage based on a total of 69,301,636 Common Units (as defined in Item 1) issued and outstanding as of January 25, 2021.

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Item 1.  Security and Issuer.

This Amendment is being filed with respect to the Common Units. The address of the principal executive offices of the Issuer is:

2nd Floor, S.E. Pearman Building

9 Par-la-Ville Road

Hamilton, HM 11

Bermuda

Item 2.  Identity and Background

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(d. and e.) To the best knowledge of each Reporting Person, none of the entities or persons identified in this Item 2, has, during the past five years, been convicted of any criminal proceeding (excluding traffic violations or similar misdemeanors), nor been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

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Item 3.  Sources and Amount of Funds or Other Consideration

In October 2016, LNG Limited entered into an equity exchange agreement (the “Exchange Agreement”) with the Issuer in which LNG Limited reset its rights to receive cash distributions in respect of its interests in the Issuer’s incentive distribution rights in exchange for the issuance of (i) a new class of the Issuer’s incentive distribution rights, (ii) an aggregate of 2,994,364 Common Units and 61,109 general partner units in the Partnership (“general partner units”), and (iii) an aggregate of up to 748,592 additional Common Units and up to 15,278 additional general partner units that may be issued if target distributions were met by the Issuer ("the Earn-Out Units") for certain quarters. Having satisfied the minimum quarterly distribution in respect of these quarters, the Issuer issued to LNG Limited half of the Earn-Out Units, which comprised of 374,295 Common Units and 7,639 general partner units in November 2017. The minimum quarterly distribution for the remaining Earn-Out Units ("second tranche") was not met and the second tranche of Earn-Out Units were not issued and will not be issued.

In December 2014 LNG Limited entered into a total return swap (the “TRS”) related to 3.0 million of its common shares, which is indexed to its own common shares. In addition, LNG Limited entered into a forward contract for the acquisition of 107,000 Common Units. In February 2020, LNG Limited purchased th e outstanding 107,000 Common Units, underlying the TRS, at fair consideration of $2.3 million, of which $57.4 million and $1.8 million restricted cash was released at repurchase.

Item 4.  Purpose of Transaction

The information set forth in Item 3 of this Amendment is hereby incorporated herein by reference.

As the LNG Limited owns and controls Golar GP LLC, the general partner of the Issuer (the “General Partner”), and the Third Amended and Restated Agreement of Limited Partnership dated October 31, 2017 of the Issuer (the “Partnership Agreement”) provides that the Issuer's board of directors consists of seven members, three of whom are appointed by the General Partner in its sole discretion, LNG Limited may thereby be involved in and may plan for its involvement in any or all of the following:

The Reporting Persons evaluate their investments in the Common Units on continual basis. The Reporting Persons have no plans or proposals as of the date of this filing, other than as set forth below, which relate to, or would result in, any of the actions enumerated in Item 4 of the instructions to Schedule 13D.

The Reporting Persons reserve the right to effect transactions that would change the number of Common Units they may be deemed to beneficially own. The Reporting Persons further reserve the right to act in concert with any other unitholders of the Issuer, or other persons, for a common purpose should they determine to do so, and/or to recommend courses of action to the Issuer's management, the Issuer's Board of Directors, the Issuer's unitholders and others.

Other than as described above, there are no material changes from the Schedule 13D/A.

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Item 5.  Interest in Securities of the Issuer.

(a.) – (b.) The aggregate number and percentage of Common Units beneficially owned by LNG Limited (on the basis of a total of 69,301,636 Common Units outstanding as reported to LNG Limited by the Issuer on January 25, 2021), is as follows:

The aggregate number and percentage of Common Units beneficially owned by ML LLC (on the basis of a total of 69,301,636 Common Units outstanding as reported to ML LLC by the Issuer on January 25, 2021), is as follows:

(c.) No transactions were effected by the Reporting Persons since the Schedule 13D/A filed on March 17, 2017 other than the transactions described herein.

(d.) No other person is known to have the right to receive or the power to direct the receipt of distributions on, or the proceeds from the sale of, any of the Common Units beneficially owned by the Reporting Persons, other than as described herein.

(e.) As of December 30, 2020, ML LLC no longer beneficially own any Common Units.

Item 6.  Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

Margin Loan

LNG Limited entered into a loan agreement, dated March 3, 2017, among one of its wholly-owned subsidiaries, as borrower, LNG Limited, as guarantor, Citibank, N.A., as administrative agent, initial collateral agent and calculation agent, and Citibank, N.A., as lender (the “Margin Loan facility”). Pursuant to the Margin Loan facility, Citibank, N.A. provided a loan in the amount of $150 million. The Margin Loan facility had a term of three years, an interest rate of LIBOR plus a margin of 3.95% and was secured by Common Units owned by LNG Limited and their associated distributions, and in certain cases, cash or cash equivalents. The Margin Loan facility contained conditions, representations and warranties, covenants (including loan to value requirements), mandatory prepayment events, facility adjustment events, events of default and other provisions customary for a facility of this nature. The loan was primarily used to pay a portion of the amounts due under LNG Limited’s 3.75% convertible senior secured bonds due March 2017 (the “Prior Convertible Bonds”). Concurrently with the repayment of the Prior Convertible Bonds, the trustee for these bonds released LNG Limited’s Common Units that had been pledged to secure them. In connection with the entry into the Margin Loan facility, LNG Limited pledged 20,852,291 Common Units as security for the obligations under the facility. This was increased to 21,226,586 Common Units as part of the amendments to the facility in 2018. In July 2018, amendments to the existing Margin Loan facility were completed. Although most of the existing terms remain substantially unchanged, the facility would no longer amortize, remaining at $100 million until maturity in March 2020. Previously the distributions received from the pledged Common Units was first used to service the interest on the loan, and any excess cash was then used to prepay a portion of the principal. Under the modified agreement, any excess cash after servicing the interest will be returned to LNG Limited.

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Merger Agreement

On January 13, 2021, the Issuer entered into an Agreement and Plan of Merger (the “Merger Agreement”) with New Fortress Energy Inc., a Delaware corporation (“NFE”), the General Partner, Lobos Acquisition LLC, a Marshall Islands limited liability company and an indirect subsidiary of NFE (“Merger Sub”), and NFE International Holdings Limited, a private limited company incorporated under the laws of England and Wales and an indirect subsidiary of NFE (“GP Buyer”), pursuant to which Merger Sub will merge with and into the Issuer, with the Issuer surviving the merger as an indirect subsidiary of NFE (the “Merger”).

Concurrently with the consummation of the Merger, GP Buyer will purchase from LNG Limited, and LNG Limited will transfer to GP Buyer (the “GP Transfer” and, collectively with the Merger and the other transactions contemplated by the Merger Agreement, the “Transactions”), all of the outstanding membership interests in the General Partner pursuant to a Transfer Agreement dated as of January 13, 2021 (the “Transfer Agreement”) for a purchase price of $5,099,188, which is equivalent to $3.55 per general partner unit of the Issuer owned by the General Partner. The Transfer Agreement also provides for the parties to enter into, among other things, an Omnibus Agreement, a form of which is attached as Exhibit B to the Transfer Agreement, relating to the provision of certain management services related to the vessels the Issuer owns. The obligation of the parties to the Transfer Agreement to consummate the GP Transfer is subject to certain closing conditions, including: (1) the accuracy of the other party's representations and warranties, subject to certain materiality qualifiers; (2) performance in all material respects by the other party; (3) the delivery of certain deliverables under the Transfer Agreement by both parties; and (4) the conditions to the Issuer’s or NFE’s (as applicable) obligations to close the Merger pursuant to the terms of the Merger Agreement must have been waived or satisfied.

Contemporaneously with the execution of the Merger Agreement, NFE, the Issuer, LNG Limited and the General Partner entered into a support agreement (the “Support Agreement”), which provides for, among other things, LNG Limited’s and the General Partner’s agreement to vote all of the Common Units held by them as of such date (i) in favor of the adoption of the Merger Agreement, (ii) against any alternative proposal, and (iii) against any amendment of the Issuer’s certificate of limited partnership or limited partnership agreement or other proposal that would delay, impede, frustrate, prevent or nullify the Merger or Merger Agreement or change in any manner the voting rights of any outstanding Common Units. In the event of an Adverse Recommendation Change (as defined in the Merger Agreement), the obligation of LNG Limited and the General Partner to vote with respect to the foregoing matters will be modified so that LNG Limited and the General Partner will vote (i) a number of Common Units equal to 20% of the outstanding Common Units as of the Partnership Meeting Date (as defined in the Merger Agreement) in respect of such matters and (ii) all remaining Common Units owned by them in a manner that is proportionate to the manner in which all outstanding Common Units (other than Common Units held by LNG Limited and the General Partner) are voted in respect of such matters.

The foregoing descriptions of the Merger Agreement, the Transfer Agreement and the Support Agreement do not purport to be complete and are qualified in its entirety by reference to the full text of such agreements, copies of which are filed as Exhibits A, B and C to this Schedule 13D and are incorporated by reference in its entirety into this Item 6.

Item 7.  Material to be Filed as Exhibits.

 

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SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

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JOINT FILING AGREEMENT

The undersigned, being duly authorized thereunto, hereby execute this agreement with respect to the securities of Golar LNG Partner LP to evidence the agreement of the below-named parties, in accordance with the rules promulgated pursuant to the Securities Exchange Act of 1934, as amended, to file this amendment to Schedule 13D, and any further amendment thereto, jointly on behalf of each such party.