Dynagas LNG Partners LP has entered into an agreement to purchase from Dynagas Holding Ltd., the Partnership's sponsor, 100% of the ownership interests in the entity that owns and operates the Yenisei River and the related time charter contract for an aggregate purchase price of US$ 257.5 million.
The acquisition of the Yenisei River, a 2013 built ice class LNG carrier, is subject to the satisfaction of certain customary closing conditions. Closing of the acquisition of the LNG carrier is expected to take place on or before 30 September 2014.
Dynagas LNG Partners expects to finance this acquisition with the net proceeds of its recently completed US$ 250 million public offering of senior unsecured notes due 2019 and available cash on hand.
The Yenisei River is currently operating under a time charter with Gazprom Global LNG Ltd with an initial term of five years that expires in July 2018. After giving effect to the acquisition of the Yenisei River and based on a scheduled delivery date of 30 September 2014, Dynagas LNG Partners’ average remaining charter term would be 5.4 years and the average age of the fleet would be 4.7 years.
Dynagas LNG Partners believes that the Yenisei River acquisition is an accretive transaction consistent with its growth strategy. The LNG carrier acquisition will generate, assuming full utilisation, annual net cash from operations of approximately US$ 25 million. The Board of Directors of the Partnership and the Conflicts Committee of the Board have approved the Yenisei River acquisition.
Following the completion of this acquisition, Dynagas LNG Partners’ management intends to recommend to the Board an increase in the Partnership's quarterly cash distribution per unit of between US$ 0.03 and US$ 0.035 (or annualised increase of between US$ 0.12 and US$ 0.14 per unit), which would become effective for the distribution with respect to the quarter ending 31 December 2014 after giving effect to the Yenisei River acquisition. Any such increase would be conditioned upon, among other things, the closing of the LNG carrier acquisition, the approval of such increase by the Board and the absence of any material adverse developments or potentially attractive acquisition opportunities that would make such an increase inadvisable.
Adapted from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/lng-shipping/24092014/dynagas-lng-partners-acquires-lng-carrier-1457/