| BW LPG extends VLGC fleet expansion by exercising |
| BW LPG, the world's largest VLGC owner, says it has exercised a purchase option for a vessel it has operated on charter about a fortnight after it announced the purchase of four newbuilds. The company, which is listed in Oslo and controlled by the Singapore based BW Maritime group, has exercised a purchase option for the 78,489 m3 capacity Berge Summit, which was built in 1990. "The transaction will be settled from free cash. Aggregate consideration for the transaction is USD8 million. Including unamortised lease rentals and dry-docking expenses on this vessel, its book value, when it is delivered into the fleet in May 2015, is expected to be approximately USD23 million. The vessel will continue to be available for employment within our contract portfolio," BW LPG said in a statement. About two weeks ago, BW LPG said it would be taking over four VLGC newbuilds. These were ordered by a Chinese principal at Daewoo Shipbuilding and Marine Engineering (DSME), at what can be considered [to be] a remarkably good price, said DNB Markets shipping analysts Nicolay Dyvik, Petter Haugen and Oyvind Berle. "From what we understand, the company that placed the original order has defaulted on its second yard instalment, and DSME then approached BW directly giving them the opportunity to pay the remaining USD72.5 million for the 3Q14 and 4Q14 deliveries. A classic win-win-win situation, where BW gets great ships at a great price, DSME exchanges one weak client for a solid one, and the VLGC market wins as we get more vessels under the umbrella of a consolidator rather than a speculator. In other segments: Product tanker rates are holding firm, VLCC rates are above USD60,000/day again, and the drybulk market remains lacklustre," the three analysts said in a market report on 13 April. |