GasLog Partners to Acquire GasLog Gibraltar
In line with its growth strategy, owner and operator of LNG carriers GasLog Partners has decided to acquire a 2016-built LNG vessel from GasLog.
The partnership plans to purchase from GasLog 100% of the shares in the entity that owns and charters GasLog Gibraltar. The 174,000 cbm vessel will be bought for USD 207 million, GasLog said in a statement.
As informed, the acquisition is expected to be closed in the second quarter of 2018 and is subject to satisfaction of certain customary closing conditions.
GasLog Gibraltar is currently on a long-term time charter with a subsidiary of Royal Dutch Shell through October 2023. Shell has two consecutive extension options which, if exercised, would extend the charter for a period of either five or eight years.
What is more, GasLog Partners has entered into an agreement to repay in full its USD 45 million unsecured term loan from GasLog. The new sponsor credit facility accrues interest at a rate of 9.125% per annum with an annual 1% commitment fee on the undrawn balance, with scheduled maturity in March 2022.
GasLog Partners expects to satisfy the above transactions through a combination of USD 58 million in cash on hand, sourced from the proceeds of its recent 8.200% Series B preference units offering, USD 45 million of new privately placed common units issued to GasLog and the assumption of USD 149 million of existing debt on GasLog Gibraltar.
“This 2016-built vessel is highly complementary to our strategy and its charter to Shell provides approximately five and a half years of stable cash flows at attractive fixed charter terms. In addition, the repayment in full of our highest cost debt is immediately accretive to our distributable cash flow per unit and strengthens our balance sheet,” Andy Orekar, Chief Executive Officer of GasLog Partners, commented.
“Furthermore, our partial satisfaction of the total consideration payable through the issuance of new privately placed common units to GasLog enables the partnership to retain substantial liquidity to fund future growth,” Orekar added.
“We continue to execute on our strategy of dropping vessels into GasLog Partners at a premium to book value and recycling the capital to GasLog. The receipt of newly issued, privately placed common units as partial consideration for these two transactions highlights the strong alignment of GP and LP interests and increases our ownership in the partnership to approximately 30%. Through our unit ownership and incentive distribution rights, we will benefit from future increases in GasLog Partners’ distributions, which should continue to enhance our cash flow, growth prospects and valuation,” Paul Wogan, Chief Executive Officer of GasLog, explained.