Dorian LPG has reached a sale and bareboat charter arrangement for its 84,000 cbm carrier Concorde.
The company entered into the USD 70 million deal that closed on January 31, 2018, resulting in net cash proceeds of USD 56 million. Out of the amount, USD 35.1 million was used to repay a portion of the outstanding principal on the USD 758 million debt financing facility that Dorian LPG entered into in March 2015.
Under the arrangement, the Concorde was delivered to its undisclosed buyer upon completion of the transaction and, on the same day, the company entered into a 13-year bareboat charter for the vessel.
Dorian LPG has a purchase option to re-acquire the Concorde from the third anniversary of the commencement of the bareboat charter through the end of the bareboat charter. The company said it would continue to technically manage, commercially charter, and operate the vessel.
The bareboat charter carries a 4.9% fixed interest rate for the duration of the contract and has a 17.3-year loan profile.
The Concorde Japanese Financing has a mandatory buyout in 2031 with early repurchase options from January 31, 2021 and carries a fixed interest rate of 4.9%.
Dorian LPG unveiled the transaction as part of its third quarter fiscal year 2018 report, in which it said that its net income stood at USD 1.7 million for the three months ended December 31, 2017, compared to a net income of USD 5 million reported in the same quarter a year earlier.
For the first nine months of the fiscal year, the company said that its net loss reached USD 16.9 million, widening significantly from a net loss of USD 3.4 million reported in the same period of the previous year.
Revenues for the quarter increased to USD 44.5 million, compared to USD 35.7 million seen in the previous year’s quarter. For the nine-month period ended December 31, 2017, Dorian LPG’s revenues were at USD 120.3 million, increasing from USD 119.8 reported a year earlier.
Highlights for the Third Quarter Fiscal Year 2018
- Revenues of $44.5 million and Daily Time Charter Equivalent (“TCE”) rate for our fleet of $22,833 for the three months ended December 31, 2017, compared to revenues of $35.7 million and TCE rate of $17,796 for the three months ended December 31, 2016.
- Net income of $1.7 million, or $0.03 earnings/(loss) per basic and diluted share (“EPS”), and adjusted net loss(1) of $(2.1) million, or $(0.04) adjusted diluted earnings/(loss) per share (“adjusted EPS”),(1) for the three months ended December 31, 2017.
- Adjusted EBITDA(1) of $24.7 million for the three months ended December 31, 2017, which increased by $10.8 million from $13.9 million for the three months ended December 31, 2016.
- Entered into a $65.0 million sale and bareboat charter arrangement for the Corsair (“Corsair Japanese Financing”) resulting in net cash proceeds of $52.0 million, $30.1 million of which we used to repay a portion of our existing bridge loan agreement with DNB Capital LLC (the “2017 Bridge Loan”). The Corsair Japanese Financing has a mandatory buyout in 2029 with purchase options from November 7, 2019 onwards and carries a fixed interest rate of 4.9%.
- Entered into an agreement to amend the maturity date and margin on the 2017 Bridge Loan. The remaining outstanding principal amount is due on or before December 31, 2018 and accrues interest on the outstanding principal amount at a rate of LIBOR plus 2.50% for the period ending March 31, 2018; LIBOR plus 6.50% for the period April 1, 2018 until June 30, 2018, and LIBOR plus 8.50% from July 1, 2018 until December 31, 2018.
John Hadjipateras, Chairman, President and Chief Executive Officer of the Company, commented, “The performance of our fleet reflects the strength of our commercial and technical management platforms as well as the premium our modern ships earn compared to older ships. We have taken further steps to ensure the continued robustness of our balance sheet through a second sale and bareboat charter arrangement. We are cautiously optimistic about the outlook for the LPG tanker sector as industry fundamentals continue to improve.”