Singapore: BW LPG has signed a $290m deal to acquire the resale contracts for four VLGCs being built at South Korea’s Daewoo Shipbuilding and Marine Engineering (DSME).
The contracts were acquired from an unnamed existing client of DSME, and the vessels will be delivered in the third and fourth quarters of 2016.
Likely sellers include China Peace Petroleum and Shandong Shipping Corporation, which both have a number of VLGCs on order at DSME for 2016 delivery, according to data from VesselsValue.com. Scorpio Tankers has one vessel, STI Tokyo, on order at the yard for delivery next year, which could also be a likely resale candidate.
“Whilst the exceptionally high rates of today are not likely to last forever, there are many years of anticipated growth in export volumes in this market, which elicits our desire to enhance our fleet and its capability,” Nicholas Gleeson, CEO of BW LPG, said in a statement today.
“These contracts now provide us an opportunity to grow or renew our VLGC fleet in the coming years, without adding further to the newbuilding fleet on order.”
BW LPG says it will use free cash to meet the contracts’ initial payments and use a revolving credit facility to finance the rest.
Martin Ackermann was announced as the new incoming CEO of BW LPG on March 12, but it remains unclear as to when he will begin his tenure in the position.
Nicholas Gleeson is set to return to his previous position as CFO once Ackermann has joined from his current position as CEO of Evergas.