The LNG carrier support network company GasLog Ltd announced that it was offering the public the chance to place a stake in a total of 9.5 million shares worth US$ 15.75 each. The total common shares offered originally stood at 8.4 million. The company intends to use the net proceeds to fund its recent purchase of three LNG carriers from BG Group affiliate, Methane Services Ltd (MSL).
GasLog announced that it is also selling approximately US$ 36.5 million of common shares at the public offering price in a private placement to in house members and one of its major shareholders.
The net proceeds from the public offering and the private placement are expected to be approximately US$ 178 million. GasLog has also granted the underwriters a 30-day option to purchase up to an additional 1.425 million shares of its common shares.
The purchased ships will be chartered back to MSL for six-year initial terms and MSL will have the option to extend the term of the time charters for two of the three ships for a period of either three or five years. The ships to be purchased will be chosen by MSL from an agreed group of six sister ships built in 2006 and 2007.
GasLog oversaw the construction of all six ships and has provided technical management for the vessels since delivery. The aggregate cost of the purchase is expected to be approximately US$ 468 million.
Each LNG carrier is powered by steam and has a capacity of 145 000 m3. GasLog estimates that when purchases, these ships will represent approximately US$ 426.3 million of incremental contracted revenue over their initial charter terms, and will add over US$ 50 million per year to GasLog’s earnings.
CEO of GasLog, Paul Wogan, said that the company was pleased with the addition of three LNG carriers, noting that the agreement solidified GasLog’s prominence as a consolidator in LNG 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.” The transaction, he said, also strengthened the company’s relationship with BG Group.
GasLog expects the transaction to close in the first or second quarter of 2014.
Edited from various sources by Ted Monroe
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