GasLog Ltd. and GasLog Partners LP Announce Agreement to Modify Incentive Distribution Rights
November 16 2018 - 07:00AM
GasLog Ltd. ("GasLog" or “the General Partner”) (NYSE:GLOG) and
GasLog Partners LP ("GasLog Partners" or “the Partnership”)
(NYSE:GLOP) today announce an agreement to modify the partnership
agreement with respect to the General Partner’s incentive
distribution rights (“IDR”). The modification will have the effect
of reducing the General Partner’s IDRs on quarterly distributions
above $0.5625 per unit from 48% to 23%. GasLog has further agreed
to waive IDR payments resulting from any asset or business acquired
by GasLog Partners from a third party. In exchange for these
modifications, the Partnership will pay $25.0 million to GasLog
which will be sourced from available cash.
The Board of Directors of GasLog, the Board of Directors of
GasLog Partners (the "Board") and the Conflicts Committee of the
Board have each approved the exchange of the IDRs and the
modification of the partnership agreement described above, subject
to execution of definitive documentation. Evercore advised the
Conflicts Committee of the Board.
The highlights of the transaction are:
- Proactive reduction of expected future IDR payments to support
GasLog Partners’ continued growth;
- Accretive to the Partnership’s estimated distributable cash
flow per LP unit in 2019 and beyond;
- Reduction in cost of capital for future acquisitions from the
General Partner;
- Meaningfully enhances competitiveness when pursuing
acquisitions from third parties;
- No incremental common units or new debt to be issued by the
Partnership in connection with the IDR modifications; and
- Reiteration of GasLog Partners’ distribution growth guidance of
5 to 7% in 2018 and 2% to 4% in 2019.
Paul Wogan, Chief Executive Officer of GasLog, stated, “Since
its inception in 2014, GasLog Partners has recycled over $700
million in equity to GasLog, supporting our growth initiatives. As
the Partnership’s largest LP unitholder, we are pleased to announce
the IDR modifications, positioning GasLog Partners for continued
success and enabling the wider GasLog group to continue executing
on its strategy. GasLog believes the elimination of the 48% IDR
tier and waiver of IDRs from third-party acquisitions constitute a
meaningful first step and, over time, we expect to consider further
IDR modifications in support of the Partnership’s future
growth.”
Andy Orekar, Chief Executive Officer of GasLog Partners, stated,
“As we are addressing our future IDR payments prior to entering
the highest tier, we are undertaking these modifications
from a position of strength, underscoring the
commitment of GasLog to the Partnership. The transaction
is expected to be accretive to GasLog Partners’ distributable cash
flow per LP unit, and accordingly we reiterate our
distribution growth guidance of 5% to 7% for 2018 and 2% to 4%
for 2019. Today’s IDR modifications reduce our expected cost of
equity capital, facilitating dropdown acquisitions from
GasLog and enabling the Partnership to compete more
effectively for third-party acquisitions."
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@gaslogltd.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 32 LNG carriers (including 25 ships on the water
and seven 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. GasLog's consolidated fleet
includes 14 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
About GasLog Partners
GasLog Partners is a growth-oriented master limited partnership
focused on owning, operating and acquiring LNG carriers under
multi-year charters. GasLog Partners' fleet consists of 14 LNG
carriers with an average carrying capacity of approximately 157,000
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
Forward-Looking Statements
All 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 GasLog and GasLog Partners
expect, project, believe or anticipate 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 liquefied natural gas (“LNG”) shipping market
conditions and trends, including spot and multi-year 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 spot and long-term 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
re-deployment 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 maintain long term relationships and enter into
time charters with new and existing customers;
- increased exposure to the spot market and fluctuations in spot
charter rates;
- fluctuations in prices for crude oil, petroleum products and
natural gas, including LNG;
- 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 dividends and distributions;
- our ability to obtain financing to fund capital expenditures,
acquisitions and other corporate activities, funding by banks of
their financial commitments, 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 time it may take to construct and deliver newbuildings and
the useful lives of our ships;
- fluctuations in currencies and interest rates;
- 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;
- our ability to retain key employees and the availability of
skilled labour, ship crews and management;
- potential disruption of shipping routes due to accidents,
political events, piracy or acts by terrorists;
- potential liability from future litigation;
- 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 GasLog’s Annual
Report on Form 20-F filed with the SEC on February 28, 2018 and
GasLog Partners’ 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.
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