The transaction will add significant scale to BW LPG’s fleet. It increases the number of owned and operated VLGCs to 53 from 41, of which 22 are LPG dual fuel. (Source: BW LPG Ltd.)
BW LPG Ltd. has agreed to acquire 12 modern very large gas carriers (VLGC) from Avance Gas Holdings in a cash-and-stock deal for $1.05 billion, Singapore-based BW said on Aug. 15.
BW will acquire a fleet comprising four 91,000 Bcm capacity dual fuel VLGCs, of which two are 2022-built and two are 2023-built, and eight 2015-built 83,000 Bcm VLGCs of which six are scrubber-fitted.
BW’s transaction will be funded through the issuance of 19.282 million new BW shares to Avance Gas, a cash consideration of $585.4 million, of which $368 million is to fund the repayment of the existing bank debt of 10 vessels.
Remaining debt of $132 million pertaining to two sale-leaseback vessels is to be novated with new contracts. Additionally, the $235.4 million cash portion of the deal will be paid from BW's available cash resources and $350 million will be financed by a shareholder loan from BW Group, BW LPG’s largest shareholder.
Following the issuance of the total share consideration, Avance Gas will become a 12.77% shareholder in BW. Avance Gas will have a 40 calendar day lock-up period in respect of the consideration shares received following delivery of each vessel.
BW is expected to increase its net leverage ratio from 7% in first-quarter 2024 to a range of 30% to 35%, maintaining a robust balance sheet to support continued shareholder distributions.
The transaction will add significant scale to BW LPG’s fleet. It increases the number of owned and operated VLGCs to 53 from 41, of which 22 are LPG dual fuel.
“This further solidifies BW LPG’s position as the world’s leading owner and operator of VLGCs, with the largest number of LPG dual-fuel powered VLGC’s,” the company said. “This fleet expansion comes at an opportune time with VLGC newbuild deliveries abating and continued growth in global LPG export volumes.”
Closing of the transaction will take place on a vessel-by-vessel basis targeted to be completed by Dec. 31.
Recommended Reading
VTX Energy Quickly Ramps to 42,000 bbl/d in Southern Delaware Basin
2024-09-24 - VTX Energy’s founder was previously among the leadership that built and sold an adjacent southern Delaware operator, Brigham Resources, for $2.6 billion.
US Drillers Cut Oil, Gas Rigs for Third Week in a Row
2024-10-04 - The oil and gas rig count fell by two to 585 in the week to Oct. 4.
Hurricane Helene Shuts in Nearly 30% of GoM Crude Production
2024-09-25 - Bumped up to hurricane classification on Sept. 25, Hurricane Helene has shut in 29% of crude and 17% of natural gas production in the Gulf of Mexico as it nears landfall in Florida tomorrow.
TotalEnergies Awards SBM Offshore FPSO GranMorgu Development Contract
2024-11-15 - SBM will construct and install a floating production, storage and offloading vessel for TotalEnergies alongside its partner Technip Energies, the company said.
Utica’s Encino Boasts Four Pillars to Claim Top Appalachian Oil Producer
2024-11-08 - Encino’s aggressive expansion in the Utica shale has not only reshaped its business, but also set new benchmarks for operational excellence in the sector.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.