MONACO - March 21, 2018 - GasLog Partners LP (NYSE:GLOP)
("GasLog Partners" or the "Partnership") and GasLog Ltd.
(NYSE:GLOG) ("GasLog") announced today that they have approved
entering into two agreements:
- For the Partnership to purchase from GasLog 100% of the shares
in the entity that owns and charters GasLog Gibraltar (the
"Acquisition"). The aggregate purchase price for the Acquisition
will be $207 million, which includes $1 million for positive net
working capital balances to be transferred with the vessel. The
Acquisition is expected to close in the second quarter of 2018 and
is subject to satisfaction of certain customary closing conditions.
The Board of Directors of GasLog, the Board of Directors of GasLog
Partners (the "Board") and the Conflicts Committee of the Board
have approved the Acquisition; and
- For the Partnership to repay in full its $45 million unsecured
term loan from GasLog ("New Sponsor Credit Facility"). The New
Sponsor Credit Facility accrues interest at a rate of 9.125% per
annum with an annual 1.0% commitment fee on the undrawn balance,
with scheduled maturity in March 2022.
GasLog Partners expects to satisfy the above transactions
through a combination of (i) $58 million in cash on hand, sourced
from the proceeds of its recent 8.200% Series B preference units
offering; (ii) $45 million of new privately placed common units
issued to GasLog(1); and (iii) the assumption of $149 million of
existing debt on GasLog Gibraltar.
GasLog Gibraltar 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 ("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.
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
dropdown and third-party acquisitions. GasLog Partners estimates
that GasLog Gibraltar will add approximately $22.4 million to
EBITDA(2) in the first 12 months after closing. Accordingly, the
Acquisition purchase price represents a multiple of approximately
9.2x estimated EBITDA. Upon closing, the Acquisition will be
supportive of GasLog Partners' guidance of 5% to 7% year-on-year
distribution growth in 2018.
Andy Orekar, Chief Executive Officer of GasLog Partners, stated,
"I am very pleased to continue executing our growth strategy with
the accretive acquisition of 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. 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."
Paul Wogan, Chief Executive Officer of GasLog, stated, "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."
(1) Number of and allocation between general partner and common
units to be determined prior to closing of the Acquisition based on
the volume weighted average pre-closing trading price of the
Partnership's common units.
(2) EBITDA is a non-GAAP financial measure. Please refer to
Exhibit I for guidance on the underlying assumptions used to derive
EBITDA.
About GasLog PartnersGasLog Partners is a growth-oriented
master limited partnership focused on owning, operating and
acquiring LNG carriers under multi-year charters. Upon closing of
the Acquisition, GasLog Partners' fleet will consist of 13 LNG
carriers with an average carrying capacity of approximately 156,000
cbm GasLog Partners' principal executive offices are located at
Gildo Pastor Center, 7 Rue du Gabian, MC 98000, Monaco. Visit
GasLog Partners' website at http://www.gaslogmlp.com.
About GasLog GasLog is an international owner, operator
and manager of LNG carriers providing support to international
energy companies as part of their LNG logistics chain. GasLog's
consolidated owned fleet consists of 29 LNG carriers (24 ships on
the water and 5 on order). GasLog also has an additional LNG
carrier which was sold to a subsidiary of Mitsui Co. Ltd. and
leased back under a long-term bareboat charter. Upon closing of the
Acquisition, GasLog's consolidated fleet will include 13 LNG
carriers in operation owned by GasLog's subsidiary, GasLog
Partners. GasLog's principal executive offices are at Gildo Pastor
Center, 7 Rue du Gabian, MC 98000, Monaco. Visit GasLog's website
at http://www.gaslogltd.com.
Forward-Looking StatementsAll statements in this press
release that are not statements of historical fact are
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include statements that address activities, events or
developments that the Partnership expects, projects, believes or
anticipates will or may occur in the future, particularly in
relation to our operations, cash flows, financial position,
liquidity and cash available for dividends or distributions, plans,
strategies, business prospects and changes and trends in our
business and the markets in which we operate. We caution that these
forward-looking statements represent our estimates and assumptions
only as of the date of this press release, about factors that are
beyond our ability to control or predict, and are not intended to
give any assurance as to future results. Any of these factors or a
combination of these factors could materially affect future results
of operations and the ultimate accuracy of the forward-looking
statements. Accordingly, you should not unduly rely on any
forward-looking statements.
Factors that might cause future results and outcomes to differ
include, but are not limited to, the following:
·
general LNG shipping market conditions and trends, including spot
and long term charter rates, ship values, factors affecting supply
and demand of LNG and LNG shipping, technological advancements and
opportunities for the profitable operations of LNG carriers;
· fluctuations in charter hire rates and
vessel values;
· changes in our operating expenses,
including crew wages, maintenance, dry docking and insurance costs
and bunker prices;
· number of off hire days and dry
docking requirements including our ability to complete scheduled
dry dockings on time and within budget;
· planned capital expenditures and
availability of capital resources to fund capital expenditures;
· our ability to maximize the use of our
vessels, including the redeployment or disposition of vessels no
longer under long term time charter commitments, including the risk
that certain of our vessels may no longer have the latest
technology at such time which may impact the rate at which we can
charter such vessels;
· our ability to secure new multi year
charters, at economically attractive rates;
· fluctuations in prices for crude oil,
petroleum products and natural gas;
· our ability to expand our fleet by
acquiring vessels through our drop down pipeline with GasLog;
· our ability to leverage GasLog's
relationships and reputation in the shipping industry;
· the ability of GasLog to maintain long
term relationships with major energy companies;
· changes in the ownership of our
charterers;
· our customers' performance of their
obligations under our time charters and other contracts;
· our future operating performance,
financial condition, liquidity and cash available for
distributions;
· our ability to acquire assets in the
future, including vessels from GasLog;
· our ability to obtain financing to
fund capital expenditures, acquisitions and other corporate
activities, funding by banks of their financial commitments,
funding by GasLog of the Sponsor Credit Facility (as defined below)
and our ability to meet our restrictive covenants and other
obligations under our credit facilities;
· future, pending or recent acquisitions
of ships or other assets, business strategy, areas of possible
expansion and expected capital spending;
· the expected cost of and our ability
to comply with environmental and regulatory conditions, including
changes in laws and regulations or actions taken by regulatory
authorities, governmental organizations, classification societies
and standards imposed by our charterers applicable to our
business;
· risks inherent in ship operation,
including the discharge of pollutants;
· GasLog's relationships with its
employees and ship crews, its ability to retain key employees and
provide services to us, and the availability of skilled labor, ship
crews and management;
· potential disruption of shipping
routes due to accidents, political events, piracy or acts by
terrorists;
· potential liability from future
litigation;
· our business strategy and other plans
and objectives for future operations;
· any malfunction or disruption of
information technology systems and networks that our operations
rely on or any impact of a possible cybersecurity breach; and
·
other risks and uncertainties described in the Partnership's Annual
Report on Form 20-F filed with the SEC on February 12, 2018,
available at http://www.sec.gov.
GasLog and GasLog Partners undertake no obligation to update or
revise any forward-looking statements contained in this press
release, whether as a result of new information, future events, a
change in our views or expectations or otherwise. New factors
emerge from time to time, and it is not possible for us to predict
all of these factors. Further, we cannot assess the impact of each
such factor on our business or the extent to which any factor, or
combination of factors, may cause actual results to be materially
different from those contained in any forward-looking
statement.
The declaration and payment of distributions are at all times
subject to the discretion of our board of directors and will depend
on, amongst other things, risks and uncertainties described above,
restrictions in our credit facilities, the provisions of Marshall
Islands law and such other factors as our board of directors may
deem relevant.
EXHIBIT I
Non-GAAP Financial Measures
EBITDA
EBITDA is defined as earnings before interest income and
expense, gain/loss on interest rate swaps, taxes, depreciation and
amortization. EBITDA, which is a non-GAAP financial measure,
is used as a supplemental financial measure by management and
external users of financial statements, such as investors, to
assess our financial and operating performance. The Partnership
believes that this non-GAAP financial measure assists our
management and investors by increasing the comparability of our
performance from period to period. The Partnership believes that
including EBITDA assists our management and investors in (i)
understanding and analyzing the results of our operating and
business performance, (ii) selecting between investing in us and
other investment alternatives and (iii) monitoring our ongoing
financial and operational strength in assessing whether to continue
to hold our common units. This increased comparability is achieved
by excluding the potentially disparate effects between periods of
interest, gain/loss on interest rate swaps, taxes, depreciation and
amortization, which items are affected by various and possibly
changing financing methods, financial market conditions, capital
structure and historical cost basis and which items may
significantly affect results of operations between periods.
EBITDA has limitations as an analytical tool and should not be
considered as an alternative to, or as a substitute for, or
superior to profit, profit from operations, earnings per unit or
any other measure of financial performance presented in accordance
with IFRS. Some of these limitations include the fact that it does
not reflect (i) our cash expenditures or future requirements for
capital expenditures or contractual commitments, (ii) changes in,
or cash requirements for, our working capital needs and (iii) the
cash requirements necessary to service interest or principal
payments, on our debt. Although depreciation and amortization are
non-cash charges, the assets being depreciated and amortized will
often have to be replaced in the future, and EBITDA does not
reflect any cash requirements for such replacements. It is not
adjusted for all non-cash income or expense items that are
reflected in our statement of cash flows and other companies in our
industry may calculate this measure differently to how we do,
limiting its usefulness as a comparative measure.
For the entity owning GasLog Gibraltar, estimated EBITDA for the
first 12 months of operation following the completion of the
Acquisition is based on the following assumptions:
· closing of the
Acquisition in the second quarter of 2018 and timely receipt of
charter hire specified in the charter
contracts;·
utilization of 363 days and no
drydocking;· vessel
operating and supervision costs and charter commissions per current
internal estimates;
and· general and
administrative expenses based on management's current internal
estimates.
GasLog and GasLog Partners consider the above assumptions to be
reasonable as of March 21, 2018, but if these assumptions prove to
be incorrect, actual EBITDA for the entity owning the vessel could
differ materially from our estimates. The prospective financial
information was not prepared with a view toward public disclosure
or with a view toward complying with the guidelines established by
the American Institute of Certified Public Accountants, but, in the
view of management, was prepared on a reasonable basis and reflects
the best currently available estimates and judgments. However, this
information is not fact and should not be relied upon as being
necessarily indicative of future results, and readers of this
document are cautioned not to place undue reliance on the
prospective financial information. Neither our independent auditors
nor any other independent accountants have compiled, examined, or
performed any procedures with respect to the prospective financial
information contained above, nor have they expressed any opinion or
any other form of assurance on such information or its
achievability and assume no responsibility for, and disclaim any
association with, such prospective financial information.
Contacts:Alastair MaxwellChief Financial OfficerPhone:
+44-203-388-3105
Phil CorbettHead of Investor RelationsPhone:
+44-203-388-3116
Joseph NelsonDeputy Head of Investor
RelationsPhone: +1 212-223-0643
Email: ir@gaslogmlp.com
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