Peter Livanos-controlled LNG shipowner GasLog and its key private equity investor BlackRock could soon part company if an ongoing sales process continues to advance.
Those following the Greek owner said an effort is ongoing under which BlackRock is looking at options for the sale of its 45% stake in GasLog, which it acquired in 2021.
Documentation is understood to have been circulated to potential buyers, and a deadline is set for this month.
One LNG shipowner said that it is no surprise that a private equity investor like BlackRock is looking for the exit door. He suggested a normal window for a fund manager to hang onto its shareholding would be between three and eight years.
The situation, however, is compounded by recent interest rate hikes.
Private equity flooded in to buy up shareholdings when interest rates were low and valuations of companies high in the post-Covid pandemic era. Investors are now looking to get out.
Reporting on a recent conference in Berlin, the Financial Times said: “Funds face a challenge to sell off more than $3 trillion worth of companies they own in order to return capital to their institutional backers, which include the likes of pension, sovereign wealth and endowment funds.”
But in GasLog and BlackRock’s case, there are also understood to be differences of opinion between the two companies.
A devoted industry follower of GasLog indicated that while Livanos is not as keen to reinvest, its key shareholder, BlackRock, wants to see growth and return on its capital.
“BlackRock are sellers,” a broking source said. “But they will chase it all the way down.”
GasLog did not respond to TradeWinds’ request for confirmation and comment.
Asked about the sales process, a spokesman for BlackRock replied: “We don’t have any comment.”
Perfect partners
Then US-listed GasLog unveiled its planned merger with BlackRock’s Global Energy & Power Infrastructure (GEPIF) grouping in February 2021 in what it said would be “a transformative next step” for the LNG shipowning company.
Livanos said at the time that BlackRock’s GEPIF team made “an ideal complement” to GasLog’s management team. Analysts and industry observers said the Greek owner had wanted to take the company private for some time and pointed to over $300m worth of debt that was due to mature the following year.
BlackRock said it was investing in GasLog as it moved to meet the growing demand for LNG with vessels fixed on long-term contracts with leading energy companies in support of the global energy transition.
The GasLog-BlackRock take-private deal closed out on 4 June 2021 with the Onassis Foundation and Livanos family-controlled Blenheim Holdings left controlling the remaining 55% of the company.
Hot stuff
Private equity buy-ins of LNG shipowners were proving hot three years ago.
New Fortress Energy’s $5bn buyout of Tor Olav Troim’s Hygo Energy Transition and Golar LNG Partners in January 2021 was something of a forerunner. New Fortress has since spun off its LNG shipping assets into Apollo-controlled Energos Infrastructure.
BlackRock dived in with GasLog a month after the Hygo sale.
Another few weeks on and in March 2021, funds managed by Morgan Stanley Infrastructure Partners paired with Hoegh LNG Holdings owner Leif Hoegh & Co.
The resulting 50:50 joint venture, Larus Holding, went on to acquire 50.4% of the shares not controlled by Leif Hoegh & Co, valuing the LNG shipowner and regasification specialist at around $214m and delisting it from the Oslo Stock Exchange.
Earlier this year, talk emerged that Morgan Stanley and Leif Hoegh & Co were speaking with an adviser about different options for their partnership. But little information emerged about the process.
Investment firm Stonepeak rounded off the buying frenzy in January 2022 by completing its $6.2bn take-private merger with Teekay LNG gas shipowner Seapeak.
