Knot Shuttle Tankers, part of NYSE-listed Knot Offshore Partners, is to acquire the registered owner of the shuttle tanker Ingrid Knutsen (111,600 dwt, built 2013) from Knutsen NYK Offshore Tankers.
The company, Knutsen NYK Shuttle Tankers 16, is being acquired for $115m, net of $104.5m of outstanding indebtedness related to the vessel. Knot Offshore says it will repay $27m of the debt, leaving $77.5m of secured debt related to the vessel, comprised of a $22.4m bank loan and an export credit loan of $55.1m.
The Ingrid Knutsen is currently deployed in the North Sea under a ten-year time charter with Standard Marine Tønsberg, a Norway-based subsidiary of ExxonMobil. The timecharter is due to expire in the first quarter of 2024, but includes options to extend for one three-year period and one two-year period.
“The partnership estimates that the acquisition will generate approximately $3.9m of net income and approximately $11.5m of EBITDA in 2016,” parent company Knot Offshore Partners said today.
Separately, Repsol Sinopec Brasil agreed in September to extend its timecharter of Knot’s suezmax shuttle tanker Carmen Knutsen (157,000 dwt, built 2013) by a further five years. The contract maintains Repsol’s three one-year extension options.
“The amended timecharter is effective until February 2023, during which period the average charter rate will be reduced by 6.2%,” Knot Offshore said. The original rate for the fixture has not been disclosed.
“The benign US dollar interest rate environment, while adversely affecting the Carmen Knutsen’s extension rate, continues to limit the partnership’s financial expenses. Offsetting the timecharter rate reduction are significant operating cost savings arising on our time-chartered fleet, because of the strong US dollar exchange rate against the Norwegian kroner,” John Costain, CEO and CFO of Knot Offshore Partners, said.
The NYSE-listed partnership has the option to acquire the Raquel Knutsen and four additional shuttle tankers newbuildings from Knutsen NYK Offshore, following acceptance by each vessel’s respective charterer.