GasLog Partners LP and GasLog Ltd. announced that the Boards of Directors of both companies and the Conflicts Committee of GasLog Partners have approved entering into an agreement for the Partnership to purchase from GasLog 100% of the shares in the entity that owns and charters the GasLog Glasgow. The aggregate purchase price for the Acquisition will be $214 million, which includes $1 million for positive net working capital balances to be transferred with the vessel, the company said in its release.
The Partnership 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 drop-downs and third-party acquisitions. GasLog Partners estimates that the GasLog Glasgow will add approximately $23.5 million to EBITDA in the first 12 months after closing. Accordingly, the Acquisition purchase price represents a multiple of approximately 9.1x estimated EBITDA. Upon closing, the Acquisition will be supportive of GasLog Partners' guidance of 2% to 4% year-on-year distribution growth in 2019.
The GasLog Glasgow is a 174,000 cubic meter tri-fuel diesel electric liquefied natural gas (“LNG”) carrier built in 2016 and operated by GasLog since delivery. The vessel is currently on a multi-year time charter with a wholly owned subsidiary of Royal Dutch Shell plc (“Shell”) through June 2026. Shell has the option to extend the charter for a period of five years.
GasLog Partners expects to finance the Acquisition from its available sources of liquidity, including proceeds from its 8.500% Series C Cumulative Redeemable Perpetual Fixed to Floating Rate Preference Units issued in November 2018, and the assumption of the GasLog Glasgow’s $134 million of existing debt. The Acquisition is expected to close early in the second quarter of 2019 and is subject to the satisfaction of certain customary closing conditions.
