GasLog has agreed to cut its rights to incentive distributions from GasLog Partners in exchange for shares.
The New York-traded companies announced Monday that GasLog receive 2.5 million common shares in its master limited partnership spinoff, in addition to an equal number of class B shares.
The class B shares can be converted into common stock beginning next 1 July and for each of the next five years.
They will not be eligible cash distributions nor will they have voting rights until they are converted into common shares.
"As the first marine MLP to eliminate [incentive distribution rights], GasLog Partners is poised to benefit from a differentiated corporate and financial structure," said GasLog Partners chief executive Andrew Orekar.
"The transaction is expected to be immediately accretive to distributable cash flow per LP unit and to reduce our cost of capital, facilitating continued execution of our growth objectives. With no future IDR obligations, we reiterate our distribution growth guidance of 2% to 4% for 2019."
According to GasLog Partners' annual report, GasLog owns 11.8 million shares in the gas carrier owner, good for 26.1% of the company.
Shares in the partnership were down just under 1% in pre-market trading to $21.30. GasLog shares closed last Friday at $13.36, down 0.22%.
