Dynagas LNG Partners LP, an owner and operator of LNG carriers, has signed an agreement with Dynagas Holding Ltd., the company’s sponsor, to acquire the 155,000 cubic meter ice class liquefied natural gas carrier Lena River, for USD 240 million.
The 2013-built tanker is currently operating under a charter contract with Gazprom Global LNG Limited, which has an initial term of five years and expires in October 2018.
Dynagas LNG Partners estimates that the Lena River will generate approximately USD 86.6 million of incremental contracted revenues over its remaining minimum charter term, assuming full utilization, and approximately USD 24.8 million of estimated net cash from operations for the first 12 months after the closing of the acquisition, expected to take place on or before December 31, 2015.
“In this short period of two years we have doubled the size of our fleet and increased our cash distributions per common and subordinated unit at a cumulative annualized level consistent with the targets we set out to achieve. In addition our contracted cash flows provide sufficient comfort to support our belief that the aforementioned proposed distributions to our unitholders are sustainable,” Tony Lauritzen, Chief Executive Officer of the Partnership, said.
Dynagas LNG Partners said that the acquisition will be financed with some USD 72 million from the net proceeds of its underwritten offering, approximately USD 133 million from the borrowings under a new USD 200 million senior term loan facility with a group of lenders, and USD 35 million from credit financing provided by the sponsor.
In early 2016, the partnership plans to draw down and utilize the remaining available borrowings under the USD 200 million term loan facility of approximately USD 67 million to repay the sponsor credit financing and for working capital purposes.