This increase was mainly due to the ‘Raquel Knutsen’ being included in the fleet commencing 1st December, 2016.
Operating income for 4Q16 was $21.6 mill, compared to $21.2 mill in 3Q16. Net income was $19.5 mill, compared to $19.4 mill for 3Q16.
Net income for the three months ended December 31, 2016 increased by $1.9 million compared to net income for the three months ended December 31, 2015.
As of 31st December, 2016, the Partnership had $37.7 mill in available liquidity which consisted of cash and cash equivalents of $27.7 mill and capacity under its revolving credit facility of $10 mill, which is available until 10th June, 2019.
The Partnership’s total interest bearing debt outstanding at the end of last year was $741.7 mill ($745.7 mill net of debt issuance cost).
On 10th January, 2017, the Partnership sold 2.5 mill common units in a public offering, raising around $54.9 mill in net proceeds.
On 2nd February, 2017, the Partnership issued and sold in a private placement 2,083,333 Series A Preferred Units at a price of $24 per unit. After deducting estimated fees and expenses the net proceeds from the sale were about $48.5 mill.
On 14th February, 2017, the wholly-owned subsidiary, KNOT Shuttle Tankers, entered into a share purchase agreement to acquire KNOT 24, the company that owns the shuttle tanker, ‘Tordis Knutsen’, from Knutsen NYK. The acquisition is expected to close within about 30 days, subject to customary closing conditions.
The purchase price was $147 mill, less about $137.7 mill of outstanding debt related to the vessel, plus around $21.1 mill for a receivable owed by Knutsen NYK to KNOT 24 and around $0.8 mill for certain capitalised fees related to her financing.
On the closing of the deal, KNOT 24 will repay around $42.8 mill of the debt, leaving an aggregate of about $94.9 mill of debt outstanding under the secured credit facility related to the vessel.
‘Tordis Knutsen’ was delivered in November, 2016 and is operating in Brazil under a five-year time charter to a subsidiary of Royal Dutch Shell, which will expire in 1Q22. The charterer has options to extend the charter for two five-year periods.
The Partnership estimated that the purchase will generate around $7.8 mill of net income and about $16.2 mill of EBITDA for the 12 months following the closing of the deal.
Going forward, the Partnership expects to receive options to acquire three additional vessels owned by Knutsen NYK under the terms of the omnibus agreement. These vessels are under construction in South Korea and China.
KNOT also issued guidance for the full year 2017 in which it said that net income was projected to range from $60 mill to $62 mill and EBITDA would range from $160 mill to $165 mill.