Höegh LNG Partners has entered into a term-sheet to acquire a 23.5 percent stake in FSRUs Neptune and GDF Suez Cape Ann from Mitsui O.S.K. Lines (MOL).
Höegh said that the transaction would be done through the acquisition of shares in two joint ventures, SRV Joint Gas Ltd. and SRV Joint Gas Two Ltd, by its subsidiary Höegh LNG Partners Operating LLC.
SRV Joint Gas Ltd. and SRV Joint Gas Two Ltd. own the Neptune and GDF Suez Cape Ann, respectively. Neptune and GDF Suez Cape Ann both operate under long-term time charters with Engie with expiration dates in 2029 and 2030 with options for extending the time charters.
Höegh LNG Partners currently owns 50 percent of shares in each vessel while MOL holds 48.5 percent. Following the transaction, MOL will continue to hold a 25 percent stake. The remaining partner is Tokyo LNG Tanker Co. with a 1.5 percent stake in each.
Also, Höegh will purchase 23.5 percent of the outstanding shareholder loans from MOL aggregating to $1.5 million. The closing of the acquisition is subject to the execution of a definitive purchase agreement as well as final board approvals. Höegh expects the acquisition to close by September 30, 2017.
According to the company, the acquisition value is $27.3 million. The 23.5 percent share of third party debt of the JVs less cash and cash equivalents and restricted cash was $101 million as of June 30, 2017.
Management of Höegh LNG Partners believes the acquisition would be accretive and is evaluating whether to recommend an increase in the its quarterly cash distribution to the board as a result.