GasLog Ltd. announces agreement to purchase three LNG carriers from BG Group
GasLog Ltd. today announced an agreement with Methane Services Ltd., an affiliate of BG Group, to purchase three LNG carriers from MSL’s fleet and to charter those ships back to MSL for six-year initial terms, GasLog said Wednesday in a press release.
MSL also will have options to extend the term of the time charters for two of the ships for a period of either three or five years at its election. The ships to be acquired will be nominated by MSL from an agreed group of six sister ships built in 2006 and 2007. GasLog supervised the construction of all six ships and has provided technical management for the ships since delivery. The aggregate cost to GasLog for the ships is expected to be approximately $468 million.
Each LNG carrier to be acquired is modern, steam powered and has a capacity of 145,000 cubic meters. The Company estimates that upon their acquisition, these ships will represent approximately $426.3 million of incremental contracted revenue over their initial charter terms and add over $50.0 million per annum to GasLog’s EBITDA1.
Paul Wogan, CEO of GasLog, commented that “we are very pleased that we will be able to add these LNG carriers to our fleet as it again demonstrates our ability to be a consolidator in this industry. We know these ships well, having supervised their construction and technically operated them since their delivery from Samsung Heavy Industries. We expect the transaction to be accretive to our earnings and support increased dividend capacity. This transaction also further strengthens our long-standing relationship with BG Group.”
The closing of the transaction is subject to the satisfaction of certain conditions, including the completion of definitive documentation and necessary financing. GasLog expects the transaction to close in the first or second quarter of 2014.
In connection with the transaction, GasLog has obtained commitments from Citibank, N.A. London Branch for a $325.5 million credit facility and a bridge loan facility. Although GasLog has obtained the bridge loan facility to maximize transactional certainty, it may pursue one or more alternative capital-raising transactions to fund a portion of the vessel purchase price, in which case it would not expect to borrow under the bridge loan facility.
In a separate press release, GasLog announced that it expects to confidentially submit to the United States Securities and Exchange Commission a draft registration statement for an initial public offering of units in a master limited partnership to be formed to own certain of GasLog’s ships with multi-year charters.
About GasLog Ltd.
GasLog is an international owner, operator and manager of LNG carriers. Following the acquisition of the MSL ships, GasLog’s fleet will include 18 wholly-owned LNG carriers, including eleven ships in operation and seven LNG carriers on order. In addition, GasLog currently has 12 LNG carriers, including the six ships subject to the agreement with MSL, operating under its technical management for third parties. GasLog’s principal executive offices are located at Gildo Pastor Center, 7 Rue du Gabian, MC 98000, Monaco.