NYSE-listed GasLog Partners is selling equity to acquire three LNG carriers from parent GasLog Ltd.
On 22 June, GasLog Ltd announced the sale of the 145,000 cbm, 2007-built Methane Alison Victoria, Methane Shirley Elisabeth, and Methane Heather Sally to the partnership for USD483 million. The vessels are on charter to the BG Group for 4.5, 5.0, and 5.5 years respectively.
On 23 June, GasLog Partners priced a public offering of 7.5 million common units at USD23.90/unit, a 4.4% discount to the previous closing price. Gross proceeds will be USD179.25 million or USD206.1 million if the underwriter option for an additional 1.125 million units is fully exercised.
GasLog Partners will pay USD157.5 million of net proceeds to GasLog Ltd for the three vessels. The remaining USD325.5 million of the purchase price is comprised of outstanding indebtedness. That credit facility will be assumed by GasLog Partners, which will use USD20 million in remaining net proceeds to pay the facility down.
The so-called ‘drop down’ transaction between the two related parties transfers ships with long-term charters into a ‘master limited partnership’ structure, which generally achieves a better valuation and thus increases the returns on those vessels.
GasLog Ltd previously completed a five-vessel drop down deal with GasLog Partners. According to GasLog Ltd CEO Paul Wogan, “This second major transaction between GasLog Ltd and GasLog Partners validates the strategy we set out at the time of GasLog Partners’ IPO.”