BW LPG has announced the acquisition of 12 modern Very Large Gas Carriers (VLGCs) from Avance Gas Holdings for a total of $1.05bn.
The fleet being acquired includes four dual-fuel 91,000 CBM VLGCs—two of which were built in 2022 and two in 2023—along with eight 83,000 CBM VLGCs from 2015, six of which are equipped with scrubbers.
The transaction will be financed through the issuance of 19.282 million new BW LPG shares to Avance Gas, along with a cash payment of $585.4m.
Of this cash amount, $368m will be used to repay the existing bank debt of ten vessels, while the remaining $132m in debt related to two sale-leaseback vessels will be novated.
BW LPG plans to cover $235.4m of the cash consideration using its available cash reserves, with the additional $350m being financed through a shareholder loan from BW Group, BW LPG’s largest shareholder.
After the issuance of the shares, Avance Gas will hold a 12.77% stake in BW LPG.
The consideration shares received by Avance Gas will be subject to a 40-day lock-up period following the delivery of each vessel.
The transaction significantly expands BW LPG’s fleet, increasing the number of owned and operated VLGCs from 41 to 53, including 22 LPG dual-fuel vessels.
This expansion reinforces BW LPG’s position as the world’s leading owner and operator of VLGCs, boasting the largest fleet of LPG dual-fuel powered vessels. The fleet growth is well-timed, as new VLGC deliveries are slowing down and global LPG export volumes continue to rise.
Prior to the delivery of five of the vessels, consent must be obtained from the lessor of two sale-leaseback facilities and the charterers of three time-charter parties. The transaction will be completed on a vessel-by-vessel basis, with the entire process expected to conclude by December 2024.
