GMLPP - Golar LNG: Equity Raising Helps But They're Still Facing A Painfully Long Deleveraging At Best

• Golar LNG has recently announced an equity raising to help stabilize their shaky financial position but their outlook for deleveraging is long and painful at best.
• They have no history of producing free cash flow, which not ideal in this situation.
• To make matter worse, their leverage is so high that it is essentially off the charts and their liquidity is also very weak, which makes for a toxic combination.
• Even if they were to virtually eliminate all of their capital expenditure, it would still take them around twelve years just to halve their leverage, which is very undesirable.
• This is a very toxic situation and even if they remain a going concern, there are no reasons to expect any dividends and thus I believe that a bearish rating is appropriate.

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