GasLog Ltd. and GasLog Partners LP Announce Agreement to Eliminate Incentive Distribution Rights
24 Juin 2019 - 1:00PM
GasLog Ltd. (“GasLog”, the “General Partner”, or the “GP”) (NYSE:
GLOG) and GasLog Partners LP (“GasLog Partners” or the
“Partnership”) (NYSE: GLOP) announced today an agreement to
eliminate the GP’s incentive distribution rights (“IDRs”) in
exchange for newly issued limited partner (“LP”) units. In exchange
for the IDRs, GasLog will receive 2,532,911 common units and
2,490,000 Class B units. The transaction is expected to close on
June 30, 2019.
The Class B units will be a new class of LP interest and will
not be entitled to receive any cash distributions until they
convert into common units. The Class B units also generally will
not have voting rights until they convert into common units. The
Class B units will become eligible for conversion on a one-for-one
basis into common units at the GP’s option in six tranches of
415,000 units per annum on July 1 of 2020, 2021, 2022, 2023, 2024
and 2025.
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 transaction described above. Evercore
advised the Conflicts Committee of the Board.
The highlights of the transaction are:
- Immediately accretive to the Partnership’s distributable cash
flow per LP unit;
- Cash flow neutral based on current IDR distributions;
- Enhances GasLog Partners’ ability to pursue growth
opportunities by reducing its expected cost of capital;
- Increases GasLog’s ownership in the Partnership, strengthening
GP/LP alignment;
- Reduces complexity in GasLog’s structure and simplifies the
presentation of financial results; and
- Reiteration of GasLog Partners’ distribution growth guidance of
2% to 4% for 2019
Andrew Orekar, Chief Executive Officer of GasLog Partners,
stated, “As the first marine MLP to eliminate IDRs, GasLog Partners
is poised to benefit from a differentiated corporate and financial
structure. The transaction is expected to be immediately accretive
to distributable cash flow per LP unit and to reduce our cost of
capital, facilitating continued execution of our growth objectives.
With no future IDR obligations, we reiterate our distribution
growth guidance of 2% to 4% for 2019.”
Paul Wogan, Chief Executive Officer of GasLog, stated, “Since
its IPO in 2014, GasLog Partners has raised over $2.4
billion of capital and has been both a critical component of
our growth and a key enabler in achieving our strategic goals.
By removing the IDRs, we aim not only to simplify GasLog’s
structure but also to reduce the Partnership’s expected cost of
capital. GasLog Partners remains our preferred equity funding
source and we believe that this transaction will contribute to
its continued growth and success.”
Contacts:
Phil CorbettHead of Investor RelationsPhone:
+44-203-388-3116
Joseph NelsonDeputy Head of Investor RelationsPhone: +1
212-223-0643
Email: ir@gaslogmlp.com
About GasLog Ltd.
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 fleet
consists of 34 LNG carriers and an additional LNG carrier which was
sold to a subsidiary of Mitsui Co. Ltd. and leased back under a
long-term bareboat charter. 20 of these vessels (12 ships on the
water and eight on order) are owned by GasLog with the remaining 15
LNG carriers being owned by the Company’s subsidiary, GasLog
Partners. GasLog’s principal executive offices are at Gildo Pastor
Center, 7 Rue du Gabian, MC 98000, Monaco.
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 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
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 multi-year charter hire rates and vessel values;
-
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 at such time which may
impact the rate at which we can charter such vessels;
-
increased
exposure to the spot market and fluctuations in spot charter
rates;
-
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 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 March 5, 2019 and GasLog
Partners’ Annual Report on Form 20-F filed with the SEC on
February 26, 2019, 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.
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