In order to finance the group’s flagship LPG terminal in Hambantota, Laugfs Gas PLC has provided a corporate guarantee to the tune of US$ 42.6 million as security to its fully-owned subsidiary Laugfs Terminals Ltd to obtain a long-term loan from People’s Bank. In a filing to the Colombo Stock Exchange Laugfs Gas said it is not expecting to be called on to pay the corporate guarantee, since Laugfs Terminals would have the financial capacity to finance the loan. Laugfs Gas said that it would also be transferring Rs.5 million to Laugfs Terminals as an equity investment.
The announcement said that the terminal would have a storage capacity of 30,000 metric tonnes costing US$ 71.5 million. However, Laugfs Gas’ last annual report said the first phase of the terminal would be 30,000 metric tonnes with an investment of US$ 51.5 million, set to become operational in 2018, while phase 2 would add another 15,000 metric tonnes through an investment of US$ 28.5 million later.
Laugfs Holdings Chairman W. H. K Wegapitiya had said that the terminal would become the largest such facility in South Asia, and could contribute towards 6-7 percent of Sri Lanka’s 2020 export target of US$ 20 billion by supplying LPG to the fast growing Indian Ocean Rim (IOR) region.
The group has so far acquired three LPG carriers to further its plans.