LNG

GasLog Ltd, the LNG fleet owner with 35 carriers split with its US affiliate GasLog Partners, said the group had signed three new loan agreements amounting to $1.1 billion arranged by 12 banks as it confirmed jobs cuts, reductions in expenses and the delivery of a new vessel.

GasLog Ltd, the LNG carrier fleet owner with 36 ships split with its US affiliate GasLog Partners, has held a private share placement “par excellence” with the participation of Greek and Chinese shipping dynasties, including the Tung family of China, the Onassis Foundation and the Greek Livanos family.

“I’m pleased to welcome the Tung family, with their long maritime history and roots in Asia, as shareholders,” said Paul Wogan, Chief Executive of GasLog.

“We look forward to working with them to deliver the value inherent in the GasLog fleet and our leading operating and commercial platform,” he added.

In 2017, the Tung family sold its controlling block of shares in Orient Overseas (International), the shipping company led by Tung Chee-hwa to China’s Cosco Shipping and Shanghai International Port Group.

The family received HK$34 billion (US$4.4Bln) from the transaction.

Orient Overseas was founded by Tung Chee-hwa's father, Tung Chao-yung, in 1969 and became the seventh-largest container shipping company in the world.

Clarksons Platou Securities AS acted as financial advisor to GasLog during the placement.

A special committee of the board of directors of GasLog, comprised entirely of independent members, reviewed the transaction.

Evercore served as financial advisor to the special committee.

In the placement, GasLog sold 14.40 million common shares at a price of $2.50 per share for total gross proceeds of $36.0M. The net proceeds of the placement are expected to be used for general corporate purposes.

About 75 percent of shares issued in the placement were purchased by GasLog’s directors and affiliates, including 6.50M shares purchased by Blenheim Holdings, wholly owned by the Livanos family and 4.0M common shares were purchased by an affiliate of the Onassis Foundation.

GasLog had posted a first-quarter 2020 loss as LNG demand faced multiple headwinds.

GasLog reported a quarterly net loss of $39.43 million versus a profit of $5.89M in the same three months a year ago.

In between the two earnings statements, GasLog brought in cost-cutting measures and among them was moving its headquarters from Monaco to the Greek port of Piraeus.

In the share placement, Blenheim Holdings also agreed not to sell the shares purchased for a period of 180 days.

“Our first-quarter results announcement set out a series of management actions to address the unprecedented market disruption caused by the Covid 19 pandemic,” said GasLog.

“We also updated the market on the progress of the refinancing of our 2021 debt maturities and the status of our interest rate and foreign exchange swap exposures,” it added.

In order to further supplement the management actions announced on May 6, 2020, the board has decided to raise $36M, or 17.8 percent percent of shares outstanding of the company prior to the private placement, to increase liquidity and further strengthen the capital structure of GasLog.

The board decided to execute the financing on a private placement basis with its core shareholders to provide both certainty and minimise any disruption against a volatile market backdrop.

CEO Wogan explained that he was delighted two of the major shareholders had provided this level of support to the company at this time and as they had done since GasLog’s initial public offering in 2012.

GasLog Ltd., the LNG carrier fleet owner with 19 vessels and with another 15 ships held by its US affiliate GasLog Partners, reported annual and quarterly losses as it started cost-cutting measures by moving its headquarters to the Greek port of Piraeus from Monaco and wrote-down some asset values.

GasLog posted a fourth-quarter loss of $119.9 million versus a profit of $30.3M in the same quarter of 2018.

For the year, GasLog’s losses came to $114.6M compared with a profit of $126.4M in 2018.

Annual revenues rose to $668.8M from $618.3M in the previous year, while fourth-quarter revenues slipped to $182.2M from $188.6M in the prior-year quarter.

“GasLog implemented a plan to relocate GasLog’s senior management and more of its employees to the Piraeus, Greece office, to enhance execution and efficiency and to reduce overheads,” said the company.

At the same time, the carrier operator as of December 31, 2019, recognized an impairment loss of $162.1M on its six steam-turbine propulsion vessels built in 2006 and 2007, including five US GasLog Partners LP vessels and one GasLog directly-owned vessel, due to negative market conditions.

Paul Wogan, Chief Executive, said he was pleased with the performance of the company in 2019.

“It represented another year of excellent execution for GasLog. We took delivery of two newbuild LNG carriers and signed long-term charters with the principal LNG shipping entity of JERA Co. (Japan) and a subsidiary of Endesa SA (Spain), both new customers for GasLog,” said Wogan.

“We also chartered two on-the-water vessels to Gunvor Group Ltd. and secured up to 10 years employment for one of our vessels as a floating storage unit,” added the CEO.

Wogan noted that the company also successfully completed a new debt facility for its newbuild deliveries in 2020 and 2021.

GasLog signed an export credit agency-backed debt financing facility in December 2019 for $1.05 billion with 12 international banks.

The newbuild facility covers the balance due to the shipyard on delivery and consequently the final instalments of the seven newbuild are fully funded.

Five of these seven ships are scheduled to deliver from the yards into firm multi-year charters in 2020 and the remaining two into firm multi-year charters in 2021. 

The company said one of its charters was for 10 years for one TFDE ship to act as a Floating Storage Unit for a power project being developed in Panama.

GasLog said that while spot rates for LNG carriers had improved in 2018 and 2019 compared to prior years, the term charter market for on-the-water vessels has not developed as anticipated, resulting in reduced expectations for future vessel utilization and earnings.

The company said this was particularly the case for the five steam vessels owned by GasLog Partners and one owned by GasLog after the expiry of their current term charters.

“As we continue to execute on our efficiency improvements and cost reductions, we will continue to look for further opportunities to enhance shareholder returns, on top of the special dividends paid in 2018 and 2019,” said Wogan.

GasLog said that in the LNG shipping spot market, tri-fuel diesel electric vessel headline rates, as reported by brokers averaged $70,000 per day in 2019, a 23 percent decrease on 2018 levels. 

“Low gas prices during much of 2019 limited the arbitrage opportunities for transporting LNG between the Atlantic and Pacific basins,” said the company.

“However, the market balance remains tight, as evidenced by the quick run up in TFDE rates in the fourth quarter of 2019 when they reached a peak of $140,000 per day in November, following a marked decrease in spot ship availability,” added GasLog.

“While headline spot rates in the first quarter of 2020 to date have fallen from their peaks in the fourth quarter of 2019, current headline rates are in line with or above the comparable dates of recent years,” it stated.

GasLog said that brokers currently assess headline spot rates for TFDE and Steam LNG carriers at $65,000 per day and $43,500 per day respectively. 

March 12 (LNG) - GasLog, the Monaco-based LNG shipping company with a fleet of 27 LNG carriers including 22 on the water and five on order, has signed a contract for another newbuild with Samsung Heavy Industries of South Korea. GasLog said the 180,000 cubic metres capacity vessel was scheduled for delivery in the second quarter of 2020 and is currently unchartered. “Given that the outlook for LNG shipping demand remains robust, and with increasing evidence that newbuild prices are starting to rise, we have moved to lock in a very attractive price for our second newbuild order in 2018,” said Paul Wogan, Chief Executive of GasLog. “We remain confident that the unit freight cost advantage offered by the latest generation vessels will make this ship highly attractive,” he added.