GasLog Partners and GasLog Ltd have approved entering into an agreement for GasLog Partners to purchase 100% of the shares in the entity that owns and charters Solaris. The aggregate purchase price for the acquisition will be US$185.9 million, which includes US$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 and the assumption of US$117 million of Solaris' existing debt. The acquisition is expected to close in 4Q17 and is subject to satisfaction of certain customary closing conditions.
Solaris is a 155 000 m3 tri-fuel diesel electric liquefied natural gas (LNG) carrier built in 2014. The vessel is currently on a multi-year time charter with a wholly owned subsidiary of Royal Dutch Shell plc (Shell) through June 2021. Shell has two consecutive extension options, which, if exercised, would extend the charter for a period of either five or 10 years.
GasLog Partners 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 Solaris will add approximately US$20 million to EBITDA in the first 12 months after closing.
Andy Orekar, CEO of GasLog Partners, stated: "I am very pleased to continue executing our growth strategy with this accretive dropdown transaction. Solaris represents the ninth LNG carrier that GasLog Partners will have acquired from GasLog since its IPO, and its multi-year charter to Shell will provide incremental visible cash flows. The acquisition will expand GasLog Partners’ fleet to 12 wholly owned LNG carriers, increase contracted days to approximately 90% for 2018 and 72% for 2019, and significantly grow contracted EBITDA."
Paul Wogan, CEO of GasLog Ltd, stated: "GasLog continues to execute on its strategy of dropping vessels into GasLog Partners and recycling the capital to GasLog. This transaction values Solaris at a premium to book value, allowing us to strengthen our balance sheet and providing further funding for future profitable growth. 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."
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/18092017/gaslog-partners-acquires-solaris-lng-vessel/