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GasLog Acquires Glasgow
The liquefied natural gas (LNG) carriers operators GasLog
Partners and GasLog announced that the Boards of Directors of
both companies and the Conflicts Committee of GasLog Partners
have approved entering into an agreement for the Partnership to
purchase from GasLog 100% of the shares in the entity that owns
and charters the GasLog Glasgow.
According to a press release from the company, the aggregate
purchase price for the Acquisition will be $214 million, which
includes $1 million for positive net working capital balances to
be transferred with the vessel.
The Partnership believes that the Acquisition will be immediately
accretive to distributable cash flow per unit and is consistent
with its strategy to grow cash distributions through drop-downs
and third-party acquisitions.
GasLog Partners estimates that the GasLog Glasgow will add
approximately $23.5 million to EBITDA in the first 12 months
after closing.
Accordingly, the Acquisition purchase price represents a multiple
of approximately 9.1x estimated EBITDA. Upon closing, the
Acquisition will be supportive of GasLog Partners' guidance of 2%
to 4% year-on-year distribution growth in 2019.
The GasLog Glasgow is a 174,000 cubic meter tri-fuel diesel
electric LNG carrier built in 2016 and operated by GasLog since
delivery. The vessel is currently on a multi-year time charter
with a wholly owned subsidiary of Royal Dutch Shell through June
2026. Shell has the option to extend the charter for a period of
five years.
Andy Orekar, Chief Executive Officer of GasLog Partners, stated,
"I am very pleased to announce the accretive acquisition of the
GasLog Glasgow. This 2016-built vessel is highly complementary to
our strategy and its charter to Shell provides over seven years
of stable cash flows at attractive fixed charter terms.
The Acquisition will expand the Partnership's fleet to 15 wholly
owned LNG carriers, significantly grow our contracted EBITDA and
increase our contracted days to approximately 92% for 2019 and
74% for 2020."
Paul Wogan, Chief Executive Officer of GasLog, stated, "We
continue to execute on our strategy of dropping vessels into
GasLog Partners in order to recycle capital back to GasLog to
fund our capital programme. In turn, this leads to further growth
opportunities for the Partnership. Since the inception of the
Partnership in 2014 - when we had a dropdown pipeline of 12
vessels with multi-year charters - we have sold 12 vessels to the
Partnership. Today, our pipeline of future growth opportunities
for GasLog Partners is 11 vessels. With the equity recycled to
GasLog, we remain solidly on track to deliver on our target to
more than double our consolidated run-rate EBITDA by 2022."
GasLog Partners expects to finance the Acquisition from its
available sources of liquidity, including proceeds from its
8.500% Series C Cumulative Redeemable Perpetual Fixed to Floating
Rate Preference Units issued in November 2018, and the assumption
of the GasLog Glasgow's $134 million of existing debt. The
Acquisition is expected to close early in the second quarter of
2019 and is subject to the satisfaction of certain customary
closing conditions.
Mar 10, 2019
