Greece-based GasLog Partners LP has reached an agreement to buy 100% of the shares in the entity that owns and charters the liquefied natural gas (LNG) tanker GasLog Greece from GasLog Ltd.
The aggregate purchase price for the Acquisition will be $219 million, which includes $1 million for positive net working capital balances to be transferred with the vessel.
GasLog Partners expects to finance the acquisition with cash on hand, including proceeds from its recent equity offering, and the assumption of $151 million of GasLog Greece's existing debt.
The Acquisition is expected to close in the second quarter of 2017 and is subject to satisfaction of certain customary closing conditions. The Board of Directors of GasLog, the Board of Directors of GasLog Partners, and the Conflicts Committee of the Board have approved the Acquisition.
GasLog Greece is a 174,000 cubic meter tri-fuel diesel electric liquefied natural gas (LNG) carrier built in 2016 and operated by GasLog since delivery. The vessel is currently on a long-term time charter with a wholly owned subsidiary of Royal Dutch Shell plc through March 2026. Shell has the option to extend the charter for a further five years.
The Partnership believes the Acquisition will be immediately accretive to unitholder distributions and consistent with its strategy to grow cash distributions through dropdown and third-party acquisitions.
Upon closing, the Acquisition will be supportive of GasLog Partners' guidance to grow unitholder distributions at a 10% to 15% compound annual rate since IPO. In conjunction with today's announcement, the Partnership affirms this growth guidance, which would result in an annualized distribution of $2.09 per unit or higher by the fourth quarter of 2017.
Andy Orekar, Chief Executive Officer of GasLog Partners, stated, "I am very pleased to announce the Partnership's fourth accretive dropdown transaction. Acquiring this strategically attractive vessel and its charter to Shell with nine years remaining highlights GasLog Partners' differentiated business model, which provides cash flow stability with growth through acquisitions."
Paul Wogan, Chief Executive Officer of GasLog, stated, "I am delighted that we continue to execute on our strategy of dropping vessels into GasLog Partners and recycling the capital to GasLog. The proceeds from the sale, which values GasLog Greece at a premium to book value, will strengthen our balance sheet and provide further funding for future profitable growth"