KNOT Offshore Partners LP Announces Acquisition of Synnøve Knutsen – Form 6-K

KNOT Offshore Partners LP Announces Acquisition of Synnøve Knutsen

July 1, 2022

ABERDEEN, Scotland–(BUSINESS WIRE)–KNOT Offshore Partners LP (the “Partnership”) (NYSE: KNOP) today announced that its wholly owned subsidiary, KNOT Shuttle Tankers AS, has acquired KNOT Shuttle Tankers 35 AS , the company that owns the shuttle tanker, Synnove Knutsen, of Knutsen NYK Offshore Tankers AS (“KNOT” “Sponsor”) (the “Acquisition”). The purchase price for the Acquisition, which was financed on a non-dilutive basis with borrowings under a separate new sale-leaseback agreement relating to the Torill Knutsenis $119 million, less $87.7 million in outstanding debt.

The Synnove Knutsen, a 153,000 deadweight ton Suezmax DP2 class shuttle tanker, was built by Hyundai Heavy Industries and delivered in October 2020. The vessel is operating in Brazil under a five-year time charter with Equinor Shipping Inc., offering firm fixed rate jobs through at least the first quarter of 2027. The charterer has the option to extend the charter for up to an additional 15 years. The Synnove Knutsen is the eighteenth Partnership ship.

The acquisition was approved by the Partnership’s independent Board of Directors and Conflicts Committee, which were supported by an independent outside financial advisor and outside legal counsel.

New Sale and Leaseback Torill Knutsen

On June 30, 2022, the Partnership, through its wholly owned subsidiary, Knutsen Shuttle Tankers 15 AS, which owned the Torill Knutsen, entered into a sale-leaseback agreement with a Japan-based lessor for a ten-year lease term. The gross sale price was $112 million and part of the proceeds were used to repay the outstanding loan and the cancellation of interest rate swap agreements related to the ship. The bareboat lease rate consists of a fixed element per day and there is a fixed price purchase obligation at maturity. After repayment of the loan and related interest rate swaps, the Partnership realized net proceeds of approximately $40 million after fees and expenses and then used approximately $31 million of this net proceeds for the ‘acquisition.

Outlook

Gary Chapman, CEO of the Partnership, commented: “By successfully executing this decline with an attractively priced sale-leaseback, we are pleased to strengthen our distribution coverage and extend the average remaining term of our charter, while considerably reducing our medium-term refinancing needs. and adding excess proceeds raised to our liquidity pool. This drop-down demonstrates not only our ability to deliver accretive fleet growth, but also our commitment to act in the best interest of our unitholders with our distribution priority in mind.

“While the current tanker charter market continues to reflect the effects of the temporary pauses in investment instituted by the oil majors at the start of the COVID-19 pandemic, we are increasingly seeing a catch-up in the offshore development activity in the form of both FPSO orders and deliveries and a marked increase in incoming tanker charter applications for the coming quarters and years in our main market, Brazil Additional discoveries in the deep-water regions dependent on tanker shuttles, substantial development investments committed by our customers and a rapidly shrinking shuttle The tanker order book gives us the assurance that the medium and long-term prospects for our business are very promising .”

About KNOT Offshore Partners LP

KNOT Offshore Partners LP owns, operates and acquires shuttle tankers primarily on long term charters in the offshore oil producing regions of the North Sea and Brazil. KNOT Offshore Partners LP is structured as a publicly traded master limited partnership, but is classified as a corporation for U.S. federal income tax purposes, and therefore issues a Form 1099 to its unitholders, rather than a Form K-1. The common units of KNOT Offshore Partners LP trade on the New York Stock Exchange under the symbol “KNOP”.

Forward-looking statements

This press release contains certain forward-looking statements regarding future events and the operations, performance and financial condition of the Partnership, including the expected impact and benefits of the Acquisition. Forward-looking statements include, but are not limited to, 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”, “will continue”, “will probably result”, “plans”, “intends” or words or phrases with similar meanings. These statements involve known risks and unknown and are based on a number of assumptions and estimates that are inherently subject to important uncertainties and contingencies, many of which are beyond the control of the Partnership. Actual results may differ materially from those expressed or implied. – implied by these forward-looking statements.Important factors that could cause actual results to differ materially include, but are not limited to:

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the ability of the Partnership to make distributions on its Units and the amount of such distributions;

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the Partnership’s ability to implement its growth strategies and other plans and objectives for future operations;

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the Partnership’s future revenues, expenses, financial condition and results of operations;

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the financial condition of existing or future clients of the Partnership and their ability to meet their charter obligations;

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the Partnership’s ability to acquire additional vessels from KNOT;

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the Partnership’s ability to incur additional debt and access the debt and equity markets; and

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other factors listed from time to time in reports and other documents the Partnership files with the United States Securities and Exchange Commission.

Any forward-looking statements included in this release speak only as of the date of this release. New factors emerge from time to time, and it is not possible for the Partnership to anticipate all of these factors. Further, the Partnership cannot assess the impact of each of these factors on its business or the extent to which any one factor, or combination of factors, could cause actual results to differ materially from those contained in any forward-looking statement. . The Partnership does not intend to publicly release any updates or revisions to the 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 about which such a statement is based.

KNOT Partners Offshore LP

Gary Chapman
Chief Executive Officer and Chief Financial Officer
E-mail: [email protected]
Tel: +44 1224 618 420

Source: KNOT Offshore Partners LP

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