BW LPG acquires 12 VLGCs from Avance Gas

Singapore-based BW LPG has entered into agreements to acquire 12 modern very large gas carriers (VLGCs) from Avance Gas Holdings for a total consideration of US$1.05 billion.

The acquisition fleet comprises four 91,000-cubic-metre dual-fuel VLGCs, of which two are 2022-built and two are 2023-built, and eight 2015-built 83,000-cubic-metre VLGCs of which six are scrubber-fitted.

The transaction is funded through the issuance of 19.282 million new BW LPG shares to Avance Gas, a cash consideration of US$585.4 million, of which US$368 million is to fund the repayment of the existing bank debt of 10 vessels. Remaining debt in the amount of US$132 million pertaining to two sale-leaseback vessels is to be novated.

US$235.4 million of the cash consideration will be paid from BW LPG’s available cash resources and US$350 million will be financed by a shareholder loan from the BW Group, BW LPG’s largest shareholder.

Following the issuance of the total share consideration, Avance Gas will become a 12.77 per cent shareholder in BW LPG. Avance Gas will have a 40 calendar day lock-up period in respect of the consideration shares received following delivery of each vessel.

The transaction increases the number of owned and operated VLGCs from 41 to 53, of which 22 are LPG dual-fuel capable.

Consent from the lessor of two sale-leaseback facilities, and the charterers of three time-charter parties, is to be obtained prior to delivery of five of the vessels. Closing of the transaction will take place on a vessel-by-vessel basis scheduled to be completed by December 31, 2024.