BW LPG Limited Announces Strategic Fleet Renewal Through Sale and Acquisition of Large Gas Carriers

BW LPG Limited has unveiled two significant transactions as part of its strategic fleet renewal initiative, aimed at optimizing its operational efficiency and maintaining a competitive edge in the global shipping market. The company’s 52%-owned subsidiary, BW LPG India, has agreed to sell the 2007-built Very Large Gas Carrier (VLGC) *BW Cedar* for further trading. The sale is valued at approximately USD 65 million on a 100% basis and is expected to yield a substantial net book gain of around USD 33 million. Additionally, the transaction is anticipated to generate approximately USD 51 million in net cash proceeds after the repayment of the vessel’s existing bank loan. The *BW Cedar* is set to be delivered to its new owners during the first quarter of 2025, marking an important milestone in BW LPG’s fleet optimization efforts.

Simultaneously, BW LPG has exercised a purchase option to acquire the 2019-built VLGC *BW Kizoku*, constructed in Japan. This modern vessel, which is currently under a time charter agreement with BW LPG, will be purchased for a total consideration of USD 69.8 million. Upon delivery in January 2025, the *BW Kizoku* will join BW LPG’s conventional fleet, continuing to support the company’s core trading operations. The acquisition of this relatively new and efficient vessel underscores BW LPG’s commitment to ensuring its fleet remains modern, capable, and aligned with evolving market demands.

Kristian Sørensen, Chief Executive Officer of BW LPG, emphasized the strategic value of these transactions, stating, “Through these transactions, we are renewing our fleet by capitalizing on strong asset prices in the second-hand market for older vessels while acquiring a modern vessel at a competitive price, translating to a new building equivalent of USD mid-80 million. This example of asset play shows the optionality and ability for value creation that our platform and business model provide.”

These transactions reflect BW LPG’s proactive approach to fleet management, leveraging favorable market conditions to maximize value while minimizing costs. The sale of the *BW Cedar* highlights the company's ability to capitalize on strong demand for second-hand vessels, unlocking significant financial gains that can be reinvested into newer assets. Conversely, the acquisition of the *BW Kizoku* demonstrates a forward-looking strategy to enhance fleet efficiency and reduce operational costs through the integration of modern, fuel-efficient vessels.

Overall, these strategic moves not only strengthen BW LPG’s position as a leading player in the global gas shipping industry but also underline its commitment to sustainable and profitable growth. By aligning its fleet with market dynamics and operational goals, the company continues to deliver value to its stakeholders while maintaining its competitive edge in the VLGC sector.