BW LPG India, a subsidiary of the major gas transportation company BW LPG, has sold an 18-year-old VLGC for over $80 million. This deal is part of the company's extensive fleet renewal program.
Deal Details and Financial Forecasts
The company stated that the BW Loyalty vessel, built in 2008 and with a capacity of 84,601 cubic meters, was sold for less than $80 million. This deal is expected to yield a profit of approximately $52 million and a net cash revenue of about $66 million after tax and transaction costs.
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Continuity of Operations and Fleet Renewal Program
The BW Loyalty vessel will remain under its current lease until the transfer to the new owner, and this sale is expected to be completed by the end of December. The identity of the buyer has not yet been disclosed. The sale of this vessel adds to a series of other profitable transactions by BW LPG's Indian operations. In August, BW LPG India also agreed to sell the BW Birch vessel, built in 2007, for approximately $64 million with a profit of $37 million.
Additionally, the company sold another vessel, the BW Elm, in July for about $64 million with a profit of $36 million. Including the sale of BW Loyalty, these three transactions have generated a total net cash revenue of approximately $194 million and a profit of $125 million.
These sales occur as BW LPG enters its largest newbuilding program in recent years. In May, the company signed a contract to build eight VLGCs with a capacity of 90,000 cubic meters with HD Hyundai Heavy Industries for approximately $940 million, with delivery scheduled between 2029 and 2030. Furthermore, the group raised $300 million through the sale of convertible bonds in September, part of which will be used to finance the newbuilding program.
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