GasLog Ltd. (“GasLog” or the “Company”) (NYSE:GLOG) today
announced that it has called for a meeting of its Norwegian
Bondholders to be held on 14 November 2014. The meeting has been
called to approve an amendment to the Bond Agreement entered into
in June 2013.GasLog has grown significantly since the initial
issuance of the bond in June 2013, adding vessels and fixed rate
revenue, while also expanding its access to the capital markets
through the initial public offering of GasLog Partners LP. Based on
this enhanced scale, stability and level of maturity the Company is
seeking an amendment to the Bond Agreement to allow the Company
greater flexibility to make dividend payments or distributions
in any given year. In return for this greater flexibility the
Company will agree to certain additional customary financial
covenants should dividends exceed a specified proportion of
consolidated net profit.
The summons including full details of the amendments can be
found in Annex I.
About GasLogGasLog is an international owner, operator
and manager of liquefied natural gas (“LNG”) carriers. GasLog’s
fleet consists of 20 wholly owned LNG carriers, including 10 ships
in operation and 10 LNG carriers on order, and GasLog has six LNG
carriers operating under its technical management for third
parties. GasLog Partners LP, a master limited partnership formed by
GasLog, owns a further five LNG carriers. GasLog’s principal
executive offices are located at Gildo Pastor Center, 7 Rue du
Gabian, MC 98000, Monaco. GasLog’s website is
http://www.gaslogltd.com.
Forward-Looking StatementThis press release contains
“forward-looking statements” as defined in the Private Securities
Litigation Reform Act of 1995. The reader is cautioned not to rely
on these forward-looking statements. All statements, other than
statements of historical facts, that address activities, events or
developments that GasLog expects, projects, believes or anticipates
will or may occur in the future, including, without limitation,
future operating or financial results and future revenues and
expenses, future, pending or recent acquisitions, general market
conditions and shipping industry trends, the financial condition
and liquidity, cash available for distribution, future capital
expenditures and drydocking costs and newbuild vessels and expected
delivery dates, are forward looking statements. These statements
are based on current expectations of future events. If underlying
assumptions prove inaccurate or unknown risks or uncertainties
materialize, actual results could vary materially from our
expectations and projections. Risks and uncertainties include, but
are not limited to, general LNG and LNG shipping market conditions
and trends, including charter rates, ship values, factors affecting
supply and demand of LNG and LNG shipping, technological
advancements and opportunities for the profitable operation of LNG
carriers; our ability to enter into time charters with our existing
customers as well as new customers; our contracted charter revenue;
our customers’ performance of their obligations under our time
charters and other contracts; the effect of volatile economic
conditions and the differing pace of economic recovery in different
regions of the world; future operating or financial results and
future revenues and expenses; our future financial condition and
liquidity; 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 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 or
operating expenses; our expectations relating to distributions of
available cash and our ability to make such distributions; our
ability to enter into shipbuilding contracts for newbuildings and
our expectations about the availability of existing LNG carriers to
purchase, as well as our ability to consummate any such
acquisitions; our expectations about the time that it may take to
construct and deliver newbuildings and the useful lives of our
ships; number of off-hire days, drydocking requirements and
insurance costs; our anticipated general and administrative
expenses; fluctuations in currencies and interest rates; our
ability to maintain long-term relationships with major energy
companies; expiration dates and extensions of our time charters;
our ability to maximize the use of our ships, including the
re-employment or disposal of ships no longer under time charter
commitments; environmental and regulatory conditions, including
changes in laws and regulations or actions taken by regulatory
authorities; our continued compliance with requirements imposed by
classification societies; risks inherent in ship operation,
including the discharge of pollutants; availability of skilled
labor, ship crews and management; potential disruption of shipping
routes due to accidents, political events, piracy or acts by
terrorists; and potential liability from future litigation.
For a discussion of some of the risks and important factors that
could affect future results, see the discussion in GasLog Ltd.’s
Annual Report on Form 20-F for the year ended December 31, 2013
under the caption “Risk Factors.” We do not undertake to update any
forward-looking statements as a result of new information or future
events or developments. Copies of the Annual Report, as well as
subsequent filings, are available online at www.sec.gov or on request from us.
Annex I
Denne melding til obligasjonseierne er kun utarbeidet på
engelsk. For informasjon vennligst kontakt Nordic Trustee ASA
To the bondholders in the FRN GasLog Ltd. Senior Unsecured
Bond Issue 2013/2018 (ISIN NO 0010683840)
Oslo, 31 October 2014
Summons to Bondholders’ Meeting
Nordic Trustee ASA is appointed as Bond Trustee for the above
mentioned Bond issue.
All capitalized terms used herein shall have the meaning
assigned to them in the bond agreement dated 25 June 2013 and made
between the Bond Trustee and the Issuer, as amended by (i) a first
amendment agreement dated 19 August 2013, (ii) a waiver dated 3
April 2014, to certain rights under the Bond Agreement dated 25
June 2013, obtained in connection with the GasLog Partners LP
initial public offering and (iii) a second amendment agreement
dated 29 April 2014 (the “Bond Agreement”), unless otherwise stated
herein.
The information in this summons regarding the Issuer and market
conditions are provided by the Issuer, and the Bond Trustee
expressly disclaims all liability whatsoever related to such
information.
1. BACKGROUND
Reference is made to the Bond Agreement. As set out in Clause
13.4.1.2, the Issuer is allowed to make Distributions to its
shareholders during any calendar year of up to 50% of the Issuer’s
consolidated net profit after taxes based on the audited annual
accounts for the previous financial year. Notwithstanding the
preceding, for the years 2013 and 2014, the Issuer may make
Distributions up to a maximum of 60 cents per share per annum,
subject to the Issuer, immediately after such Distributions,
maintaining consolidated Free Liquidity of not less than (i) USD
20,000,000 and (ii) four percent of Total Indebtedness.
Since the time of the original Bond Issue, the Issuer has grown
its fleet and backlog significantly and profitably, consistently
delivering against its business plan. Key to the Issuer's growth
strategy has been a prudent risk profile with careful attention to
cost of capital. Equity markets, as one component of the Issuer’s
capital markets strategy, have in recent years shown increased
attention to dividend policies and restrictions. Strong access to
equity markets is important to support the growth strategy, and
also benefits creditors by ensuring a range of attractively-priced
options for future capital. Indeed, the Issuer has already in 2014
tapped the equity capital markets for more than US$ 300
million.
As set out below, the Issuer is seeking to enhance its dividend
flexibility. The Issuer proposes taking a balanced approach to
support its capital markets strategy, readily acknowledging that an
increase in its dividend flexibility must be accomplished in a
manner that, in the Issuer’s view, is broadly credit-neutral for
existing Bond investors. As discussed further below, the Issuer
proposes to provide this comfort via (i) complimenting the
increased flexibility with certain financial covenants that must be
met; and (ii) establishing a specified cap on dividends,
denominated in cents per common share as adjusted for splits or
other share distributions.
Additionally, subsequent to the initial Bond Issue in June 2013,
the Issuer established a Master Limited Partnership, GasLog
Partners LP (the "MLP"). The MLP provides a source of
attractively priced capital. When the MLP was established, it
entered into a revolving credit facility in the amount of USD 30
million with the Issuer as lender and the MLP as borrower (the
"MLP RCF"), to be used to fund general purposes of the MLP.
The Issuer again recognizes the legitimate desire of Bondholders to
ensure their interests are not compromised thereby and agrees to
set a maximum committed amount of the MLP RCF of USD 75 million.
Further, the Issuer also agrees to not provide additional debt or
committed debt availability to the MLP if the aggregate amount of
the MLP RCF and additional debt or committed debt availability
would exceed USD 75 million. The Issuer will undertake not to
create or permit to exist any mortgage, pledge, lien or any other
encumbrance over the rights or interest of the Issuer pursuant to
the MLP RCF or pursuant to any additional debt or committed debt
availability provided to the MLP.
2. PROPOSAL
Based on the background information set out above, the Issuer
proposes to make the following changes to the Bond Agreement with
immediate effect upon satisfaction of the conditions set forth in
Section 3 below:
a) In Clause 13.4, the following new Clause 13.4.1.5 is
added:
MLP Revolving Credit FacilityThe Issuer has made available a
revolving credit facility to the MLP, at market terms, in the
amount of USD 30 million (the “MLP RCF”). The Issuer shall
not increase the MLP RCF to an amount above USD 75 million.
Further, the Issuer shall not (and shall procure that no other
member of the Group shall) provide additional debt or committed
debt availability to the MLP if the aggregate amount of the MLP RCF
and additional debt or committed debt availability would exceed USD
75 million. The Issuer shall not (and shall procure that no other
member of the Group shall) create, permit to subsist or allow to
exist any mortgage, pledge, lien or any other encumbrance over the
rights or interest of the Issuer (or such other Group member)
pursuant to the MLP RCF or pursuant to any other additional debt or
committed debt availability provided to the MLP.
b) In Clause 13.4.1.1, the following should be added at the
end:
For the avoidance of doubt, the MLP RCF (as defined in Clause
13.4.1.5 below) shall not be considered Financial Support.
c) Clause 13.4.1.2 is amended to read as follows:The Issuer
shall not (i) declare or make any dividend payment or distribution,
whether in cash or in kind, (ii) repurchase any of its shares or
undertake other similar transactions (including, but not limited to
total return swaps related to shares in the Issuer), or (iii) grant
any loans or make other distributions or transactions constituting
a transfer of value to its shareholders (items (i)-(iii)
collectively referred to as the "Distributions") that in
aggregate exceed, during any calendar year, 50% of the Issuer's
consolidated net profit after taxes based on the audited annual
accounts for the previous financial year (any un-utilised portion
of the permitted Distributions pursuant to the above may not be
carried forward); provided that for purposes of this provision the
consolidated net profit after taxes of the Issuer shall not include
any profits related to the sale of assets (and consequently any
such profits not form basis for Distributions).
Notwithstanding the above, the Issuer shall be permitted to make
Distributions up to a maximum amount per share per annum as follows
(subject to a pro rata adjustment for share dividends, share splits
or similar transactions after the date hereof):
Year Maximum Aggregate Distributions Per Share
(USD) 2014 0.70 2015 1.00 2016 1.10 2017
1.20 2018 1.30
provided the Issuer can demonstrate by delivering a Compliance
Certificate to the Bond Trustee prior to making such Distribution
that:
i) the Maximum Leverage does not exceed 67.5% immediately after
the Distribution is made, calculated by including on a pro forma
basis the Distribution (and debt incurred to finance such
Distribution) to be made in the publicly filed accounts of the
Issuer for the immediately preceding calendar quarter;
ii) EBITDA to Debt Service on a trailing four quarter basis,
ending the quarter immediately prior to that in which the
Distribution is paid, shall be a minimum of 1.15:1; and
iii) no Event of Default is continuing or would result from such
Distribution.
To enable the Issuer to conduct the proposed change of the Bond
Agreement, the Issuer has requested the Bond Trustee to summon a
Bondholders’ meeting to consider the approval of the proposed
changes.
________ o 0 o
________
As compensation to the Bondholders for approving the Proposal,
the Issuer offers the Bondholders a one-time waiver fee of 1.00%
(flat) of the face value of the Bonds, both original and follow-on
issue (the “Amendment Fee”), payable to all Bondholders
(with record date on the end of business on the date of the
Bondholders’ Meeting) within ten (10) Business Days after the
Bondholders’ Meeting has approved the Proposal as set forth in this
Section 2.
3. CONDITIONS
Customary condition precedent for the Issuer as conditions for
the abovementioned amendments to enter into effect will include
compliance with the following conditions (no later than 21 November
2014), inter alia:
a) a duly executed amendment agreement reflecting the
abovementioned amendments, to be delivered no later than 21
November 2014;
b) evidence that the Amendment Fee (as defined below) has been
paid in full; and
c) a legal opinion in reasonable form related to the valid
authorization and execution by the Issuer of the amended Bond
Agreement.
4. THE ISSUER’S EVALUATION
The Issuer believes that it has surpassed the goals set forth at
the time of the original Bond Issue with a proven track record of
profitable and credit-enhancing growth. The Issuer understands that
any changes to the Bond Agreement need to be evaluated carefully,
but is of the view that the changes requested will not materially
impact the credit profile of the Issuer due to the following:
- The Issuer is a publicly listed entity
with access to cost effective and diverse capital (equity, MLP,
bonds and bank).
- The Issuer had approximately $2.8
billion of firm period contracted revenues as at 30 June 2014,
which represented 72% coverage of total available shipping days
through the end of 2018. Were all existing charterer options to be
exercised, this would roughly double the forward book.
- The Issuer is negotiating an extension
of its 2016 bank loan maturity to beyond the Bond maturity.
- The Issuer will be expressly limited in
the amount of Distributions that can be made by the proposed
cap.
This summons contains “forward-looking statements” that address
activities, events or developments that the Issuer expects,
projects, believes or anticipates will or may occur in the future.
If underlying assumptions prove inaccurate or unknown risks or
uncertainties materialize, actual results could vary materially
from the Issuer’s expectations and projections. The Issuer does not
undertake to update any forward-looking statements as a result of
new information or future events or developments.
5. THE BOND TRUSTEE’S EVALUATION
The request is put forward to the Bondholders without further
evaluation or recommendations from the Bond Trustee. The
Bondholders must independently evaluate whether the proposed
changes are acceptable.
6. SUMMONS TO BONDHOLDERS’ MEETING
Bondholders are hereby summoned to a Bondholders’ Meeting:
Time:
14 November 2014 at 13:00 hours (Oslo
time),
Place:
The premises of Nordic Trustee
ASA,
Haakon VIIs gt 1, 0116 Oslo -
6th floor
Agenda:
1. Approval of the summons.2. Approval of the
agenda.3. Election of two persons to co-sign the minutes together
with the chairman.4. Request for adoption of proposal:
It is proposed that the Bondholders’
meeting resolve the following:
“The Bondholders’ Meeting approves the
proposal as described in section 2 of the summons for the
Bondholders’ Meeting.”
To approve the above resolution, Bondholders
representing at least 2/3 of the Bonds represented in person or by
proxy at the meeting must vote in favour of the resolution. In
order to have a quorum, at least 1/2 of the voting Bonds must be
represented at the meeting. If the proposal is not adopted, the
Bond Agreement will remain unchanged.
Please find attached a Bondholder’s Form from the Securities
Depository (VPS), indicating your bondholding at the printing date.
The Bondholder’s Form will serve as proof of ownership of the Bonds
and of the voting rights at the Bondholders’ meeting. (If the Bonds
are held in custody - i.e. the owner is not registered directly in
the VPS - the custodian must confirm; (i) the owner of the Bonds,
(ii) the aggregate nominal amount of the Bonds and (iii) the
account number in VPS on which the Bonds are registered.)
The individual Bondholder may authorise the Nordic Trustee to
vote on its behalf, in which case the Bondholder’s Form also serves
as a proxy. A duly signed Bondholder’s Form, authorising Nordic
Trustee to vote, must then be returned to Nordic Trustee in due
time before the meeting is scheduled (by scanned e-mail, telefax or
post – please see the first page of this letter for further
details).
In the event that Bonds have been transferred to a new owner
after the Bondholder’s Form was made, the new Bondholder must bring
to the Bondholders’ meeting or enclose with the proxy, as the case
may be, evidence which the Bond Trustee accepts as sufficient proof
of the ownership of the Bonds.
For practical purposes, we request those who intend to attend
the Bondholders’ Meeting, either in person or by proxy other than
to Nordic Trustee, to notify Nordic Trustee by telephone or by
e-mail (www.mail@trustee.no) within 16:00 hours (4 pm) (Oslo time)
the Banking Day before the meeting takes place.
Bondholders are welcome to contact the Issuer with questions to
the proposal. Please contact CFO, Simon Crowe at +377 97975260.
Yours sincerelyNordic Trustee ASA
Fredrik Lundberg
Enclosed: Bondholder’s Form
GasLog Ltd.Paul Wogan (CEO), Phone: +377 9797 5115orSimon
Crowe (CFO), Phone: +377-9797-5115orJamie Buckland (Investor
Relations), Phone: +377 9797 5118
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