DLNG turns on the tap

Dynagas LNG Partners of Greece has turned to the capital markets for the cash it needs to acquire an LNG carrier from its sponsor, Dynagas Holdings.

Nasdaq-quoted DLNG on Wednesday announced plans to sell 4.8 million units in a public offering backed by underwriters that will be given an option to purchase an additional 720,000.

In a statement the operator said proceeds from the fundraiser will be used to finance a portion of the purchase price of the 154,800-cbm Arctic Aurora (built 2013).

DLNG told investors that the balance will likely be covered by cash from a new $340m senior secured revolving credit facility, which will also be used to refinance $214.2m worth of outstanding debt tied to an existing facility.

“In the event that the acquisition is not consummated, the net proceeds from this offering will be used for general partnership purposes,” the company added in Wednesday’s announcement, which was published after the close of trading on Wall Street.

The Athens-based operator identified Credit Suisse, BofA Merrill Lynch, Morgan Stanley and Deutsche Bank Securities and joint book-running managers. ABN AMRO and DNB Markets were named as co-managers.

DLNG, which is led by chief executive Tony Lauritzen, first announced plans to acquire the Arctic Aurora from its sponsor in late April. When the deal made TradeWinds headlines it said the ship would cost roughly $235m.

At last check the partnership’s units were commanding $24.41 a piece. At that price the operator would walk away with gross proceeds of more than $117m from the sale of 4.8 million units but observers note the net total from the follow-on fundraiser will likely be lower.