GasLog Ltd. (NYSE:GLOG) announced an agreement has been reached today with BG Group affiiate, Methane Services Ltd. (MSL), to purchase three of MSL’s LNG carriers at an aggregate cost of $468 million.
The three ships targeted by GasLog will come from a group of six, steam powered, 145,000 cbm sister ships built between 2006 and 2007 at Samsung Heavy Industry, all of which have been under GasLog’s technical management since delivery. Upon delivery to GasLog, the ships will then be chartered back to MSL under an initial six-year charter contract with extension options.
Funds for the acquisition come in combination from a Citibank $325.5 million credit facility and a bridge loan facility as well as a public and private offering of common shares by GasLog announced concurrently. GasLog announced today 8,400,000 of its common shares will made available to the public as well as $30 million in shares available in a private placement.
GasLog projects 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 EBITDA.
Paul Wogan, CEO of GasLog, comments:
“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 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.”
GasLog expects the transaction to close in the first or second quarter of 2014.
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.