KNOT Offshore To Buy Dan Sabia

(RTTNews) - KNOT Offshore Partners LP (KNOP) on Wednesday said its subsidiary, KNOT Shuttle Tankers AS, had entered into a share purchase agreement to acquire KNOT Shuttle Tankers 21 AS, the company that owns the shuttle tanker, Dan Sabia, from Knutsen NYK Offshore Tankers AS. The purchase price of the deal is $103.0 million, net of $64.5 million of outstanding indebtedness related to the Dan Sabia.

The Partnership expects the Acquisition to close within approximately 30 days, subject to customary closing conditions.

The Dan Sabia is operating under a bareboat charter with Petrobras Transporte S.A. The Dan Sabia charter commenced upon delivery of the vessel in the first quarter of 2012 and will terminate in the first quarter of 2024.

As a result of the deal, the Partnership's management has recommended to the board an increase in quarterly cash distribution of between $0.01 and $0.015 per unit, which would become effective for the distribution with respect to the quarter ending September 30, 2015. Any such increase would be conditioned upon, among other things, the closing of the acquisition.

Separately, KNOT said it plans to offer 5,000,000 common units, representing limited partner interests, in a public offering. The Partnership expects to grant the underwriters a 30-day option to purchase up to an additional 750,000 common units.

The Partnership intends to use the net proceeds in the offering and the related capital contribution by its general partner to maintain its 2% general partner interest to fund the cash portion of the purchase price of its acquisition of the shuttle tanker, Dan Sabia, and a prepayment on the senior secured loan facility related to the Dan Sabia, and the remainder for general partnership purposes.