Loading, Please Wait...
VANCOUVER, British Columbia, July 19, 2019 (GLOBE NEWSWIRE) -- Methanex Corporation (TSX:MX) (NASDAQ:MEOH) announced today that its Board of Directors reached a unanimous final investment decision to construct a 1.8 million tonne methanol plant in Geismar, Louisiana adjacent to its existing Geismar 1 and Geismar 2 facilities. Construction on the Geismar 3 plant will begin later this year and operations are targeted in the second half of 2022. The cost of the project is expected to be between US$1.3-$1.4 billion including costs of approximately US$60 million incurred to date.
The Company has a robust and flexible financing plan for the Geismar 3 project. We have arranged committed financing for the project with a new five-year US$800 million construction facility and for the renewal of our existing US$300 million revolving credit facility, which replaces the Company’s existing revolving facility, to provide further liquidity. Both facilities have been arranged with a syndicate of banks and will expire in July 2024. In addition, the Company expects to access the debt capital markets during the second half of 2019 to pre-fund approximately US$250 million of the Geismar 3 2020 expenditures and to repay the Company’s US$350 million aggregate principal amount of bonds due in December 2019.
John Floren, President & CEO of Methanex, commented, “We are extremely pleased to move forward with the Geismar 3 project which we believe will create significant long-term value for shareholders. Compared to a standalone US Gulf greenfield plant, this project benefits from substantial capital and operating cost advantages, and we expect will deliver outstanding returns. We believe we are well positioned to complete this project as we have a rigorous and well-defined execution plan, an experienced team in place and a strong balance sheet and financial flexibility to execute the project safely across a wide range of prices. As we have stated previously, we have a preference to have a strategic partner for the project and we will continue to pursue that option.”
Mr. Floren added, “As part of the cooperation agreement we reached with M&G Investments earlier this year, we retained an independent financial advisory firm to advise and support the Audit, Finance and Risk Committee of the Board in reviewing the Company’s financing plan for the Geismar 3 project. The independent financial advisory firm was one of the three firms agreed to by both parties in the cooperation agreement. The independent review was rigorous and the report, which was reviewed in detail with the Audit, Finance and Risk Committee and shared with the full Board as part of their review of the Geismar 3 project, concluded that we have a robust financing plan.”
Mr. Floren concluded, “Our long-term outlook for the methanol industry is very positive. Demand forecasts for methanol are strong and new capacity additions will be needed to meet expected demand growth. We have a long track record of making disciplined capital investments to enhance our leadership position while maintaining a strong balance sheet and returning excess cash to shareholders. Geismar 3 is an exceptional opportunity to deliver on our long-term strategy to enhance our position as the methanol industry leader.”
A presentation regarding the Geismar 3 project can be found on the Company’s website at www.methanex.com/investor-relations.
Methanex is a Vancouver-based, publicly traded company and is the world's largest producer and supplier of methanol to major international markets. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol "MX" and on the NASDAQ Global Market in the United States under the trading symbol "MEOH”. Methanex can be visited online at www.methanex.com.
FORWARD-LOOKING INFORMATION WARNING
This news release contains forward-looking statements with respect to us and our industry. These statements relate to future events or our future performance. All statements other than statements of historical fact are forward-looking statements. Statements that include the words "believes," "expects," "may," "will," "should," "potential," "estimates," "anticipates," "aim," "goal", "targets" or other comparable terminology and similar statements of a future or forward-looking nature identify forward-looking statements.
More particularly and without limitation, any statements regarding the following are forward-looking statements:
We believe that we have a reasonable basis for making such forward-looking statements. The forward-looking statements in this document are based on our experience, our perception of trends, current conditions and expected future developments as well as other factors. Certain material factors or assumptions were applied in drawing the conclusions or making the forecasts or projections that are included in these forward-looking statements, including, without limitation, future expectations and assumptions concerning the following:
However, forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. The risks and uncertainties primarily include those attendant with producing and marketing methanol and successfully carrying out major capital expenditure projects in various jurisdictions, including, without limitation:
Having in mind these and other factors, investors and other readers are cautioned not to place undue reliance on forward-looking statements. They are not a substitute for the exercise of one’s own due diligence and judgment. The outcomes implied by forward-looking statements may not occur and we do not undertake to update forward-looking statements except as required by applicable securities laws.
For further information, contact:
Manager, Investor Relations
604 661-2600 or Toll Free: 1 800 661 8851
604 661-2600 or Toll Free: 1 800 661 8851