Dorian LPG Inks Sale and Bareboat Deal for Tanker
Owner and operator of modern very large gas carriers Dorian LPG has entered into a sale and bareboat charter arrangement for its LPG tanker Corsair.
Under the deal, which is expected to close during November 2017, the ship would be sold for USD 65 million. Corsair will be delivered to the buyer upon completion of the transaction and, on the same day, Dorian LPG will enter into a 12-year bareboat charter for the vessel.
The company also has a purchase option to re-acquire Corsair from the second anniversary of the commencement of the bareboat charter through the end of the bareboat charter.
Dorian LPG said that the transaction would result in net cash proceeds of USD 52 million, USD 30.1 million of which will be used to repay a portion of the USD 97 million outstanding under the bridge loan agreement with DNB Capital LLC.
The company unveiled the agreement as part of its financial report for the second quarter ended September 30, 2017. During the three-month period, the company’s net loss expanded to USD 11.9 million, compared to a net loss of USD 7.1 million reported for the three months ended September 30, 2016.
Revenues stood at USD 34.7 million at the end of the period, rising from USD 33.6 million seen in the second quarter a year earlier. The TCE rate for the company’s fleet was USD 18,015 in the period, representing a 5.9% decrease from a TCE rate of USD 19,137 from the same period in 2016, primarily driven by increased bunker costs.
“Despite near term market headwinds, we continue to focus on our financial and commercial activities. The latter is reflected in our improving fleet utilization rate and the operating performance of our vessels relative to benchmarks,” John Hadjipateras, Chairman, President and Chief Executive Officer of Dorian LPG, said.
“We have also taken further steps to enhance our financial profile through a sale and bareboat charter arrangement that improves our liquidity and has also been structured to provide us optionality to a market recovery,” Hadjipateras added.