GasLog Partners LP (NYSE:GLOP) (“GasLog Partners” or the
“Partnership”) and GasLog Ltd. (NYSE:GLOG) (“GasLog”) announced
today 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
(the “Acquisition”). 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(1) 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 liquefied natural gas (“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 plc (“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.
(1) 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 15 LNG carriers with an average carrying capacity of
approximately 158,000 cbm. GasLog Partners' principal executive
offices are located at Gildo Pastor Center, 7 Rue du Gabian, MC
98000, Monaco. Visit the 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 34 LNG
carriers (25 ships on the water and 9 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 15 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 Company 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. In some cases,
predictive, future-tense or forward-looking words such as
"believe", "intend", "anticipate", "estimate", "project",
"forecast", "plan", "potential", "may", "should", "could" and
"expect" and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of
identifying such statements. In addition, we and our
representatives may from time to time make other oral or written
statements which are forward-looking statements, including in our
periodic reports that we file with the SEC, other information sent
to our security holders and other written materials. We caution
that these forward-looking statements represent our estimates and
assumptions only as of the date of this press release or the date
on which such oral or written statements are made, as applicable,
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 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 multi-year charter hire rates and
vessel values;
- increased exposure to the spot market and fluctuations in spot
charter rates;
- our ability to maximize the use of our vessels, including the
re-deployment or disposition of vessels which are not under
multi-year charters, including the risk that certain of our vessels
may no longer have the latest technology which may impact the rate
at which we can charter such vessels;
- 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 maintain long term relationships and enter into
time charters with new and existing customers;
- 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 and expenses, 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 or orders for ships
or other assets, business strategy, areas of possible expansion and
expected capital spending;
- the time that 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 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;
- any malfunction or disruption of information technology systems
and networks that our operations rely on or any impact of a
possible cybersecurity event; and
- other risks and uncertainties described in the GasLog Ltd.
Annual Report on Form 20-F filed with the SEC on March 5, 2019 and
GasLog Partners’ Annual Report on Form 20-F filed with the SEC on
February 26, 2019 and 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, except as
required by applicable law. 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.
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 Glasgow, 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 2019 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 8, 2019, 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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