KNOT Public Share Offering to Fund Tankship Acquistions
KNOT Offshore Partners says it has entered into agreements to acquire from Knutsen NYK Offshore Tankers AS all of the ownership interests in the companies that own and operate the shuttle tankers 'Hilda Knutsen' and 'Torill Knutsen'. At the same time KNOT announce the public offering of 4,600,000 common share units.
1. Acquisition of the two tankships
The purchase price of the Hilda Knutsen is $166.0 million, net of $109.6 million of outstanding indebtedness related to the vessel. The purchase price of the Torill Knutsen is $169.0 million, net of $112.1 million of outstanding indebtedness related to the vessel.
The two shuttle tankers are operating in the North Sea under time charters with Eni Trading & Shipping S.p.A.
The Hilda and Torill Charters commenced upon delivery of the Hilda Knutsen and the Torill Knutsen in the third quarter of 2013 and each will terminate five years after delivery. Eni has options to extend each of the charters for up to five one-year periods. In the case of the Torill Charter, Eni has the option, at any time before May 31, 2016, to extend the charter term to ten years in exchange for a reduction in the hire rate.
2. Public offering
KNOT inform that it plans to offer 4,600,000 common units, representing limited partner interests, in a public offering. The Partnership expects to grant the underwriters a 30-day option to purchase an additional 690,000 common units.
The Partnership says it intends to use the net proceeds that it receives in the offering and the related capital contribution by its general partner to maintain its 2% general partner interest to fund the purchase prices of its previously announced acquisitions of two shuttle tankers, the Hilda Knutsen and the Torill Knutsen, from Knutsen NYK Offshore Tankers AS and the remainder for general partnership purposes.
About KNOT Partnership
The Partnership owns, operates and acquires shuttle tankers under long-term charters in the offshore oil production regions of the North Sea and Brazil. The Partnership is structured as a master limited partnership. The Partnership’s common units trade on the New York Stock Exchange under the symbol “KNOP.”