ABERDEEN, United Kingdom--(BUSINESS WIRE)--
KNOT Offshore Partners LP (the "Partnership") (NYSE:KNOP) announced
today that it has entered into agreements to acquire from Knutsen NYK
Offshore Tankers AS all of the ownership interests in the companies that
own and operate the shuttle tankers Hilda Knutsen and Torill
Knutsen (the “Acquisitions”). The purchase price of the Hilda
Knutsen is $166.0 million, net of $109.6 million of outstanding
indebtedness related to the vessel. The purchase price of the Torill
Knutsen is $169.0 million, net of $112.1 million of outstanding
indebtedness related to the vessel. The Partnership expects to fund the
cash portion of the purchase prices by issuing equity. The Partnership
expects the Acquisitions to close within approximately 30 days, subject
to customary closing conditions.
Each of the Hilda Knutsen and the Torill Knutsen is
operating in the North Sea under time charters (the “Hilda Charter” and
the “Torill Charter,” together, the “Hilda and Torill Charters”) with
Eni Trading & Shipping S.p.A. (“Eni”). The Hilda and Torill Charters
commenced upon delivery of the Hilda Knutsen and the Torill
Knutsen in the third quarter of 2013 and each will terminate five
years after delivery. Eni has options to extend each of the charters for
up to five one-year periods. In the case of the Torill Charter, Eni has
the option, at any time before May 31, 2016, to extend the charter term
to ten years in exchange for a reduction in the hire rate.
The Partnership’s board of directors (the “Board”) is pleased that the
Partnership has entered into these purchase agreements in connection
with its second and third acquisitions since the Partnership’s initial
public offering in April 2013.
The Board and the conflicts committee of the Board (the “Conflicts
Committee”) have approved the purchase prices of the Acquisitions. The
Conflicts Committee retained an outside financial advisor to assist with
its evaluation of the Acquisitions.
As a result of the Acquisitions, the Partnership’s management has
recommended to the Board an increase in the Partnership’s quarterly cash
distribution of $0.035 (corresponding to an annualized increase of
$0.14), which would become effective for the distribution with respect
to the quarter ending September 30, 2014. Any such increase would be
conditioned upon, among other things, the closing of the Acquisitions,
the approval of such increase by the Board and the absence of any
material adverse developments or potentially attractive opportunities
that would make such an increase inadvisable.
As previously announced on June 10, 2014 and as a result of the
Partnership’s entry into new senior secured credit facilities, the
Partnership’s management has recommended to the Board an increase in the
Partnership’s quarterly cash distribution of $0.02 (an annualized
increase of $0.08), which would become effective for the distribution
with respect to the quarter ending September 30, 2014. This recommended
increase is in addition to the increase recommended as a result of the
Acquisitions. Any such increase would be conditioned on, among other
things, the closing of the senior secured credit facilities, approval of
such increase by the Board and the absence of any material adverse
developments or potentially attractive opportunities that would make
such an increase inadvisable.
The Partnership owns, operates and acquires shuttle tankers under
long-term charters in the offshore oil production regions of the North
Sea and Brazil. The Partnership is structured as a master limited
partnership. The Partnership’s common units trade on the New York Stock
Exchange under the symbol “KNOP.”
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements
concerning future events and the Partnership’s operations, performance
and financial condition. Forward-looking statements include, without
limitation, any statement that may predict, forecast, indicate or imply
future results, performance or achievements, and may contain the words
“believe”, “anticipate”, “expect”, “estimate”, “project”, “will be”,
“will continue”, “will likely result”, “plan”, “intend” or words or
phrases of similar meanings. These statements involve known and unknown
risks and are based upon a number of assumptions and estimates that are
inherently subject to significant uncertainties and contingencies, many
of which are beyond the Partnership’s control. Actual results may differ
materially from those expressed or implied by such forward-looking
statements. Important factors that could cause actual results to differ
materially include, but are not limited to:
-
the Partnership’s ability to consummate the Acquisitions on a timely
basis or at all, and to integrate and realize the expected benefits
from the Acquisitions;
-
the Partnership’s ability to increase distributions to unitholders and
the amount of any such increase;
-
the Partnership’s ability to implement its growth strategies and other
plans and objectives for future operations;
-
the Partnership’s future revenues, expenses, financial condition and
results of operations;
-
the Partnership’s ability to make additional borrowings and to access
debt and equity markets; and
-
other factors listed from time to time in the reports and other
documents the Partnership files with the United States Securities and
Exchange Commission.
New factors emerge from time to time, and it is not possible for the
Partnership to predict all of these factors. Further, the Partnership
cannot assess the impact of each such factor on its business or the
extent to which any factor, or combination of factors, may cause actual
results to be materially different from those contained in any
forward-looking statement. The Partnership does not intend to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Partnership’s expectations
with respect thereto or any change in events, conditions or
circumstances on which any such statement is based.

Source: KNOT Offshore Partners LP