The Yenisei River acquisition is subject to the satisfaction of certain customary closing conditions. Closing of the acquisition of the Yenisei River is expected to take place on or before September 30, 2014.
The Partnership expects to finance this acquisition with the net proceeds of its recently completed $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 Limited 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 September 30, 2014, the Partnership’s average remaining charter term would be 5.4 years and the average age of the fleet would be 4.7 years.
The Partnership believes that the Yenisei River acquisition is an accretive transaction consistent with its growth strategy. The Yenisei River acquisition will generate, assuming full utilization, annual net cash from operations of approximately $25.0 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, the Partnership’s management intends to recommend to the Board an increase in the Partnership’s quarterly cash distribution per unit of between $0.03 and $0.035 (or annualized increase of between $0.12 and $0.14 per unit), which would become effective for the distribution with respect to the quarter ending December 31, 2014 after giving effect to the Yenisei River acquisition. Any such increase would be conditioned upon, among other things, the closing of the Yenisei River 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.
Dynagas LNG Partners LP (NASDAQ: DLNG) is a growth-oriented partnership formed by Dynagas Holding Ltd. to own, and operate liquefied natural gas (“LNG”) carriers employed on multi-year charters. The current fleet of Dynagas LNG Partners consists of four LNG carriers, each of which has a carrying capacity of approximately 150,000 to 155,000 cbm.
Source: Dynagas LNG Partners LP