We aim to maintain a strong financial position, maintaining our competitiveness at all levels.
Our cash position combined with a long track record sets us apart as a reliable and safe partner for customers and other stakeholders in weak market conditions.
Addition of nine Aurora LPG vessels at a discount to net asset value
In 2016, BW LPG made a strategic move to acquire Aurora LPG. The acquisition of Aurora LPG illustrates our strategy of investing counter cyclically and growing through market downturns. We executed the acquisition at the lowest point in the cycle since 2009 and acquired the company for US$57.6 million. As a result of this acquisition, nine Aurora vessels were added into our wider fleet in January 2017.
Source: Clarksons and BW LPG Analysis
Refinancing of BW LPG vessels with market leading financing terms
In March 2017, the Group secured US$290 million for the re-financing of six 2016-built ex-Aurora ships at an all-in cost of LIBOR plus 1.88% per annum with a 16-year amortisation profile. In February 2018, the Group further signed a US$150 million five year Senior Secured Term Loan Agreement to refinance its existing US$150 million revolving credit facility maturing in March 2018. The new US$150 million loan facility was raised from a syndication of five banks at an all-in cost of LIBOR plus 1.7% per annum with an eight-year amortisation profile. These financings exemplify our strategy of cost leadership, and our ability to leverage the BW LPG platform value to obtain market leading financing. The ex-Aurora fleet is now refinanced at similar competitive terms and structure as the rest of the BW LPG fleet, which further strengthens our competitive edge in a challenging market.
Financing – Repayment Profile (US$ million)
Strategic vessel divestments to increase liquidity – Sale of five vessels at US$185 million
- In January 2017, the Group recycled the 1991-built LGC BW Havfrost and completed the sale and leaseback of the 2017-built VLGC BW Messina.
- In July 2017, the Group sold the 2001-built VLGC BW Vision. The vessel was delivered to her new owner in September 2017.
- In July 2017, the Group sold the 2002-built VLGC BW Energy and the 2001-built VLGC BW Boss to BW LPG’s joint venture (JV) with Global United Shipping India Private Limited. BW Energy was delivered into the JV in October 2017 whilst BW Boss was delivered to the JV in January 2018.
The divestment of these vessels were part of our strategy to rejuvenate our fleet. As a result of these sales, the average fleet age of BW LPG’s vessels have improved to 7.3 years against the global fleet age of 8.8 years.
[Data as of 31 January 2018]
Maintaining a comfortable leverage of 56% in a low market
As at 31 December 2017, our net debt position stands at US$1.3 billion. Total liquid cash and undrawn facilities was at US$266.5 million which consisted of US$56.5 million in cash, and undrawn amounts under revolving credit facilities of US$210 million.