GasLog Ltd. (“GasLog”) (NYSE:GLOG) has entered into an agreement
with Methane Services Ltd. (“MSL”), an affiliate of BG Group
(“BG”), to acquire two modern tri-fuel diesel electric (“TFDE”) LNG
carriers for a cost of $460 million. The two vessels, Methane Becki
Anne and Methane Julia Louise, will be chartered back to BG for
periods of nine and eleven years with further options by the
charterer to extend the term of the time charter for each vessel by
either three or five years.
The nine and eleven year charters are very much in line with our
expectations. They add approximately $580 million of contracted
revenue(1) over the charter period and are expected to provide a
combined annual EBITDA of approximately $46 million(2). Upon
completion of the acquisition, the consolidated GasLog group will
have total contracted revenues of approximately $3.3 billion. Due
to the length of the charters, both vessels will be eligible for
dropdown into GasLog Partners LP, potentially increasing future
distributions to GasLog in respect of its limited partner and
general partner interests in GasLog Partners. On commencement of
the charters the transaction is expected to be immediately
accretive to Gaslog’s earnings per share.
The two vessels were built at Samsung Heavy Industries and
delivered in 2010. GasLog supervised their construction and has
technically managed both ships since delivery. They have TFDE
propulsion, a cargo capacity of 170,000 cubic meters and have
on-board reliquefaction plants, which enable reduced consumption of
natural gas at lower speeds.
In connection with the transaction, GasLog has obtained
commitments from DNB Bank ASA, for a $325 million secured credit
facility and a $135 million subordinated two-year loan facility at
rates in line with recent GasLog financings.
Paul Wogan, CEO of GasLog, commented, “This is the third
accretive transaction we have been fortunate enough to enter into
with BG Group in 2014. The acquisition of these two latest modern
LNG ships is a great start to the 40:17 strategy put forward at our
recent investor conference. We believe this reaffirms our
commitment to BG and their appreciation of GasLog as a long-term
service provider to their growing LNG story.
By agreeing fully funded debt financing for these ships it also
demonstrates our ability to continue to do accretive deals as and
when the opportunity arises without the need for additional equity
at GasLog Ltd. These ships will be added to the Gaslog Partners
drop down pipeline, extending the built-in growth for longer.
Including this transaction, we will have added twelve ships to
the GasLog fleet in 2014. We continue actively to develop
additional opportunities and look forward to 2015 as a year that
will see GasLog well on the way to achieving its stated goals.”
The closing of the transaction is subject to the satisfaction of
certain conditions, including the completion of definitive
documentation. GasLog expects the transaction to close in the first
quarter of 2015. The charter commencement is expected to take place
at the same time.
Poten Capital Services (UK) advised GasLog on this
transaction.
About GasLog Ltd.
GasLog is an international owner, operator and manager of
liquefied natural gas (“LNG”) carriers. GasLog’s wholly owned fleet
consists of 20 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. Following the
completion of this transaction, GasLog’s wholly owned fleet will
consist of 22 LNG carriers and GasLog will have four 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.
Forward-Looking Statements
This 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 of GasLog,
cash available for dividend payments, 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 dividend payments and our
ability to make such payments; 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
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; 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;
potential liability from future litigation; and the announced
acquisition may not be consummated, it may not be consummated on
schedule or it may not be as profitable as expected. A further list
and description of these risks, uncertainties and other factors can
be found in our Annual Report filed with the SEC on March 27, 2014.
Copies of the Annual Report, as well as subsequent filings, are
available online at www.sec.gov or on request from us. We do not
undertake to update any forward-looking statements as a result of
new information or future events or developments except as may be
required by law.
_______________
(1) Contracted revenue calculations assume:a) 365 revenue days
per annum, with 30 off-hire days when the ship undergoes scheduled
drydocking;b) all LNG carriers on order are delivered on
schedule;c) no exercise of any option to extend the terms of
charters.
(2) EBITDA, which represents earnings before interest income and
expense, gain/loss on interest rate swaps, taxes, depreciation and
amortization, is a non-GAAP financial measure. Please refer to
GasLog’s third quarter 2014 financial results for guidance on the
underlying assumptions used to derive EBITDA.
GasLog LtdPaul Wogan (CEO), Phone: +377 9797 5115orSimon
Crowe (CFO), Phone: +377 9797 5115orJamie Buckland (Investor
Relations), Phone: +33 607 93 75 23
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