Chiyoda is one of the world’s top builders of liquefied natural gas (LNG) plants. With increased global demand for LNG, the plant engineering firm’s fortunes potentially has a bright future.
On Monday, as per a report from the Nikkei newspaper, MUFG Bank along with Japanese trading house Mitsubishi Corp plan on rescuing Chiyoda Corp, an engineering company with a lifeline of $1.4 billion as they expect the financing is likely to help it achieve a turnaround given a significant rise in demand for LNG.
Incidentally, Chiyoda is one of the world’s top builders of liquefied natural gas (LNG) plants. The company was straddled with losses after a hurricane hit its Cameron LNG project in Louisiana.
The power industry across the globe is seeing a strategic shift in demand from coal to LNG. Royal Dutch Shell has forecast the global LNG trade to rise by 11% to 354 million tonnes in 2019.
Mitsubishi, has already twice bailed out Chiyoda. The company has a 33.4% stake in the engineering firm. It will provide the bulk of the $1.36 billion (150 billion yen) financing through a mix of private placement of new preferred shares along with loans, said the Nikkei, without citing sources.
MUFG Bank, a part of Mitsubishi UFJ Financial Group, will provide additional financing, it said.
According to Chiyoda, financing talks are on-going and a decision has yet to be arrived at. It also disclosed that its full-year loss is likely to be bigger than it previously forecast.