GasLog Ltd. entered into an agreement with BG Group affiliate Methane Services Ltd. to acquire two modern tri-fuel diesel electric LNG carriers for $460 million. The two vessels, Methane Becki Anne and Methane Julia Louise, will be chartered back to BG for periods of nine and 11 years with options by the charterer to extend the term of the time charter for each vessel by either three or five years.
The charters add about $580 million of contracted revenue over the charter period and are expected to provide a combined annual EBITDA of about $46 million. Upon completion of the acquisition, the consolidated GasLog group will have total contracted revenues of about $3.3 billion. Both vessels will be eligible for dropdown into GasLog Partners LP due to the length of the charters, potentially increasing future distributions to GasLog in respect of its limited partner and general partner interests in GasLog Partners. The transaction is expected to be immediately accretive to Gaslog’s earnings per share on commencement of the charters.
The LNG carriers were built at Samsung Heavy Industries in South Korea and delivered in 2010. GasLog supervised their construction and has technically managed both ships since delivery. They have TFDE propulsion, a cargo capacity of 170,000 cubic meters and onboard reliquefaction plants, which enable reduced consumption of natural gas at lower speeds.
Connected with the transaction, GasLog obtained commitments from DNB Bank ASA, for a $325 million secured credit facility and a $135 million subordinated two-year loan facility.
Closing is subject to certain conditions, including the completion of definitive documentation. GasLog expects the transaction to close in first-quarter 2015, with the charter commencement expected to take place at the same time.
Poten Capital Services (UK) advised GasLog on the transaction.
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