GasLog Partners' First Option Vessels Acquisition for $328 mi

By Joseph R. Fonseca
Thursday, August 14, 2014
Image

 

GasLog Partners LP and GasLog Ltd. announced today that they have entered into an agreement for the Partnership to purchase from GasLog, the sole member of the Partnership’s general partner and the Partnership’s majority unitholder, 100% of the shares in the entities that own and charter the  Methane Jane Elizabeth  and  Methane Rita Andrea, modern liquefied natural gas carriers built in 2006, each with a capacity of 145,000 cubic meters, for an aggregate purchase price of $328 million.

The Acquisition is subject to the Partnership obtaining the funds necessary to pay the purchase price and the satisfaction of certain other closing conditions. The Partnership expects to finance the acquisition with a combination of equity and the assumption of the vessels’ existing credit facilities. In addition, the Partnership has entered into a commitment letter with Citibank for a new $450 million credit facility to refinance the current credit facilities of the vessels currently owned by the Partnership as well as the facilities for the two LNG carriers being acquired.
 
GasLog acquired the Methane Jane Elizabeth and Methane Rita Andrea from an affiliate of BG Group (“BG”) in April 2014. GasLog supervised the construction of each ship and has provided technical management for the ships since delivery. The vessels are currently operating under long-term time charters with BG with initial terms of 5.5 and 6 years, respectively (through October 2019 and April 2020). BG has the option to extend either or both of the charters for an additional period of either three or five years following the initial charter period.
 
The Acquisition is a significant milestone for GasLog Partners and GasLog Ltd. as it marks the first transaction carried out by the two entities since GasLog Partners’ initial public offering (“IPO”) in May 2014. The Partnership believes that the Acquisition is immediately accretive and consistent with its strategy to grow cash distributions for its unitholders through accretive dropdown and third-party acquisitions. The Partnership estimates that the vessels being acquired will annually generate $47.7 million of incremental contracted revenue over their initial charter terms, assuming full utilization, and $34.5 million of EBITDA (1) .

The Board of Directors of GasLog, Board of Directors of the Partnership (the “Board”) and the Conflicts Committee of the Board have approved the Acquisition.
 
Following the completion of the Acquisition, the Partnership’s management intends to recommend to the Board an increase in the Partnership’s quarterly cash distribution per unit of between $0.05625 and $0.06250, an increase of approximately 15% above the existing minimum quarterly distribution and an annualized increase of between $0.225 and $0.250 per unit. When combined with the existing minimum quarterly cash distribution of $0.375, this proposed increase results in a cash distribution of between $0.43125 to $0.43750 per quarter. Any such increase would be conditioned upon, among other things, the closing of the Acquisition, the approval of such increase by the Board and the absence of any material adverse developments or potentially attractive opportunities that would make such an increase inadvisable.
 
Andy Orekar, Chief Executive Officer of GasLog Partners, stated, “I am very pleased to be announcing our first dropdown acquisition so soon after our successful IPO. The addition of these two vessels will significantly increase the size of GasLog Partners’ fleet from three to five ships, increasing the scale of the Partnership and diversifying our operations. This acquisition increases the average remaining contract term on our charters to approximately 5 years and adds $262 million of contracted revenue under the initial charter terms of 5.5 and 6 years, assuming full utilization. The remaining pipeline of eligible dropdown vessels at GasLog Ltd. and the potential for further third-party acquisitions provides a highly visible path to sustainable growth over several years. Having now agreed and announced our first dropdown acquisition with GasLog, we believe GasLog Partners is well positioned to execute our strategy and substantially grow cash distributions for our unitholders.”
 
Paul Wogan, Chief Executive Officer of GasLog Ltd., stated, “This first transaction between GasLog Ltd. and GasLog Partners is extremely significant. It validates the strategy we set out at the time of GasLog Partners’ IPO of recycling capital from the Partnership to continue growing the GasLog fleet and take advantage of what we believe will be attractive markets for LNG shipping. We believe there is significant value to GasLog and its shareholders through GasLog holding the limited partner units, the general partner and the incentive distribution rights in GasLog Partners. In particular, I am very pleased that, upon completion of this transaction, GasLog Partners’ cash distribution per unit is expected to meet or exceed the first incentive distribution right threshold.”
 
 

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter May 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

STX Shipbuilding Likely to Enter Court-lead Restructuring

South Korean shipbuilder STX Offshore & Shipbuilding Co Ltd will likely need to enter court-supervised receivership due to financial difficulties, the firm's lead

Statoil Says Sees European Gas Prices Bottoming Out

Norway's Statoil does not expect European gas prices to fall much further as rising demand from the power generation sector would offset an expected increase in liquefied natural gas (LNG) supply,

Baltic Index Down on Lower Demand for Larger Vessels

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, fell on Wednesday hurt by sluggish demand for large vessel sizes.

Energy

Statoil Says Sees European Gas Prices Bottoming Out

Norway's Statoil does not expect European gas prices to fall much further as rising demand from the power generation sector would offset an expected increase in liquefied natural gas (LNG) supply,

Technip Bags Statoil's Umbilical Supply Contract

Technip’s wholly-owned subsidiary Technip Umbilicals Ltd.(1) has been awarded a contract by Statoil ASA to supply the umbilical(2) to the Oseberg Vestflanken 2 field offshore Norway.

Wood Group Bags Statoil MSA

Wood Group has been awarded an evergreen master services agreement (MSA) by Statoil to support the life cycles of its offshore  and onshore facilities. Work and

News

Guinean Sailors Arrested after Clash with Sierra Leone Navy

Sierra Leone was holding 11 Guineans including military personnel in custody on Wednesday following a confrontation at sea involving the two West African neighbours' navies,

Fleet Week Underway in New York

Parade of ships signals start of Fleet Week New York 2016   Now in its 28th year, New York Fleet Week has commenced, with ships from the U.S. Navy, U.S. Coast

Davie Begins First Resolve-Class AOR Conversion

Davie Shipbuilding has cut first steel for the Resolve Class Auxiliary Oiler Replenishment vessel.   The project consists of converting a containership into an

Vessels

Davie Begins First Resolve-Class AOR Conversion

Davie Shipbuilding has cut first steel for the Resolve Class Auxiliary Oiler Replenishment vessel.   The project consists of converting a containership into an

Naviera Nabia Orders Newbuild from Gondan

Gondan Shipyard signed a new contract for the construction of a new vessel for Naviera Nabia, part of Acuña Group, from Bueu (Pontevedra-Spain). This new catamaran

Baltic Index Down on Lower Demand for Larger Vessels

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, fell on Wednesday hurt by sluggish demand for large vessel sizes.

Mergers & Acquisitions

CMA CGM Proceeds with NOL Takeover after China Okay

CMA CGM, the world's third-largest container shipping firm, is to go ahead with its planned acquisition of Singapore's Neptune Orient Lines (NOL) after receiving regulatory clearance from China,

Singapore Exchange in Talks to buy Baltic Exchange

Baltic Exchange privately owned by 380 shareholders. The Singapore Exchange (SGX) is in exclusive talks to buy London's Baltic Exchange, which has been at the

China Okays CMA CGM's Acquisition of NOL

CMA CGM S.A. (CMA CGM), a global leader in container shipping, announces that it has received today confirmation that its pending acquisition of Neptune Orient Lines (NOL),

 
 
Naval Architecture Navigation Pipelines Pod Propulsion Port Authority Ship Electronics Ship Repair Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1352 sec (7 req/sec)