Class action against Höegh nears deadline

Thursday, 11 November 2021
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Several US law firms have warned investors of the 27th December, 2021 deadline to file a lead plaintiff motion in a securities class action lawsuit against Höegh LNG Partners. 

One - US investor rights law firm, Bernstein Liebhard - said that a securities class action lawsuit was filed on behalf of those who purchased or acquired the securities of Höegh LNG Partners between 22nd August, 2019 and 27th July, 2021, inclusive.

It was filed in the US District Court for the District of New Jersey and alleges violations of the Securities Exchange Act of 1934.

According to the complaint, the defendants made materially false and misleading statements and omitted to disclose that:

(1) The Partnership was facing issues with the PGN ‘FSRU Lampung’ charter;

(2) As a result, the charterer would commence arbitration to declare the charter null and void;

(3) The Partnership would need to find alternative refinancing for its PGN ‘FSRU Lampung’ credit facility;

(4) The PGN ‘FSRU Lampung’ credit facility matured in September, 2021, not October, 2021 as previously stated;

(5) The Partnership would be forced to accept less favourable refinancing terms with regards to the FSRU credit facility;

(6) Höegh would not extend the revolving credit line to the Partnership past its maturation date;

(7) Höegh would have very limited capacity to extend any additional advances to the Partnership beyond what was currently drawn under the facility;

(8) The Partnership would essentially end distributions to common unitholders;

(9) The COVID-19 pandemic was not the sole or root cause of the Partnership’s issues in Indonesia;

(10 Neither the auditing, taxes, nor maintenance of the charter were the root causes of the Partnership’s issues in Indonesia.

On 27th July, the Partnership said that its Board had reduced its quarterly cash distribution to $0.01 per common unit, down from a distribution of $0.44 per common unit in the first quarter of 2021.

It was also revealed that it had received notice from Höegh that the Partnership’s revolving credit line would not be extended when it matured on 1st January, 2023.

On this news, the Partnership’s common unit price fell by $11.57 per common unit, or 64%, to close at $6.30 per common unit on 28th July, 2021, on unusually heavy trading volume, allegedly damaging investors. 

 

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