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Cheniere Energy, Inc. Message Board

  • richardleeds richardleeds Jan 29, 2011 1:45 PM Flag

    LNG stock issues

    1. They have $2.5billion in debt on project that will not be used as they built for importing lng. So this is basically worthless.

    2. With $2.5 billion in debt they will have to build a construction project for three years with no earnings that will cost another $2billion for the first two trains and another $2billion for the second two trains.

    3. Total up all the expenditures and debt and interest payments on the debt.

    I see big stock dilution coming. I do not see what lenders will loan them the billions of dollars in this economy.

    I believe the future is going to be some large capitalized hedge funds that will come out of the woodwork in the next year or two to build projects that are well capitalized.

    Cheniere is not capitalized for a multi billion dollar project. Borrowing funds today is very difficult unless you have great collateral. You almost have to have the assets on the balance sheet that are easily converted to cash if you want to borrow today. Lenders want to lend to the best creditors.

    Cheniere is junk bond status. If you had $2-4billion would you rather loan it to Exxon Mobil to build an LNG facility or a Cheniere? I'm not saying Exxon is going to build a plant. Most major oil and gas companies no longer even want their old refineries.

    I'm not saying Cheniere is not going to get a permit to export. I'm saying start up projects whether it is a nuclear plant, refinery, LNG facility or whatever, has been very difficult to finance is the post 2008 financial market place.

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