Troim revealed this during the company’s earnings call on Wednesday.
He said the board’s mission is to maximize the value of the company for all shareholders, both on long and short-term basis.
“To have an effectively priced equity is a major condition for growing this business,” he said.
He said the value of Golar today is linked to three things.
It’s the value of the existing contracts, the value of the options agreement, and the value of the Golar franchise.
“I don’t think anybody fully understands the value, but to illustrate a little bit, we have been approached by one of the largest oil companies in the world, who effectively said, we cannot do this. Can you be our service arm to deliver FLNG activities going forward?”
Limited cash flow
Troim noted that Golar also “decided to push out the vessel number four and maybe also vessel number five a little bit, not because of lack of progress, but we’re going to two years in 2026 and 2027 where we have limited cash flow because the Mark II has not started and the Hilli is in for repair.”
“So I think what we want to do is to push the investment phase closer to the period where we are effectively running with an 800 million Ebitda and are actually self-serviced with capital for growth purposes,” he said.
“I was on the call in connection with the quarterly numbers, and I said then that if an undervaluation compared to the real value exists over time, then the board will kind of start processes which try to take out part of that benefit, even if the share price in the latter weeks have shown some signs of recovery, the board still feels that the value of this company, including the value drivers I just mentioned, particularly number two and number three, should mean that the share price should have been higher than where it is today,” he said.
“What we have seen in other situations in this industry is that the valuation typically come when the cash is coming. It doesn’t come when the contract is signed. I’m referring to companies like Cheniere where you actually saw that the share price started to move when this cash finally came from the discussions,” Troim said.
Alternatives and offers
“So in order to kind of look at what we can do in the meantime, we have to explore alternative ways to enhance the value for the period under the cash flow coming 2028,” he said.
He said that the board started a process where it is going to seek external advice to consider several ways to improve the value for the shareholders.
“This includes talk to shareholders, it includes talk to industrial and financial potential partners, which can help us enhancing the value of the company on a more shorter-term basis,” he said.
“The market should be aware that we several years ago received unsolicited offer for the company, several ones. We structured that into a process and all the offers were at that time significantly higher than the share price,” he said.
He said that the board, however, decided not to recommend the sale of the company, “which I think in retrospect has been the right decision.”
“See how we have later built the company. The board of Golar today consists of board members, including myself. We represent significant capital invested in the company, and you should be assured that the board has no other consideration than to do what we believe is the best interest for all shareholders,” he said.
“There’s no other agenda here. The outcome of such a strategic process is kind of we are in the process of starting combined with the board’s internal discussion is too early to be expected, but we’ll keep the market updated if these processes are likely to lead to material changes in Golar,” he said.
“In the meantime, the value of the company should increase day by day as we get closer to the window in 2028,” he said.
