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    KNOT Offshore Partners raises $156M in IPO

    KNOT Offshore Partners, the world’s second largest owner of shuttle tankers for the offshore oil and gas industry, recently completed its initial public offering (IPO).

    The Aberdeen, UK-based company that owns shuttle tankers under long-term charters (5 years or more) raised $156 million by offering 7.45 million shares at $21. The company is listed on the NYSE under the ticker symbol KNOP. BofA Merrill Lynch, Citi and Barclays acted as lead managers on the deal.

    Arild Vik serves as the company’s CEO and CFO.

    KNOT Offshore Partners LP focuses on owning, acquiring, and operating shuttle tankers. It intends to transport crude oil through its vessels.

    The initial fleet of shuttle tankers will be contributed by Knutsen NYK Offshore Tankers AS, or KNOT, which is jointly owned by TS Shipping Invest AS, and Nippon Yusen Kaisha.

    Upon the closing of the offering, KNOT Offshore Partners will have a modern fleet of shuttle tankers that will operate under long-term charters with major oil and gas companies engaged in offshore production such as BG Group, Statoil and Transpetro.

    The company expects to use approximately $121.9 million of the net proceeds from the IPO to:

    • repay approximately $34.8 million of borrowings under the $160 million senior secured loan facility;
    • repay approximately $9.6 million of borrowings under the $19 million junior secured loan facility;
    • repay approximately $52.1 million of borrowings under the $120 million senior secured loan facility, or the Bodil Facility;
    • repay all of our borrowings outstanding (approximately $22.4 million) under the $27.3 million junior secured loan facility, or the Windsor Conversion Facility; and
    • to pre-fund approximately $3.0 million of our one-time entrance tax into the Norwegian tonnage tax regime.

    It will use the remainder of the net proceeds for general partnership purposes.

    With 22 shuttle tankers (including the vessels in its initial fleet) and four newbuilds on order as of March 15, 2013, KNOT is the second largest owner of shuttle tankers behind Teekay Offshore Partners LP.

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