DORIAN LPG LTD. (NYSE:LPG) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
On June 8, 2017, the Company entered into a $97.0 million
agreement providing for a senior secured bridge term loan (the
“2017 Bridge Loan”) by and among Corsair LPG Transport LLC,
CNML LPG Transport LLC, CMNL LPG Transport LLC, CJNP LPG
Transport LLC, as borrowers, the Company, as parent guarantor,
DNB Markets, Inc., as mandated lead arranger and book runner, DNB
Bank ASA, New York Branch, as facility agent and security
trustee, and DNB Capital LLC, as lender.
agreement providing for a senior secured bridge term loan (the
“2017 Bridge Loan”) by and among Corsair LPG Transport LLC,
CNML LPG Transport LLC, CMNL LPG Transport LLC, CJNP LPG
Transport LLC, as borrowers, the Company, as parent guarantor,
DNB Markets, Inc., as mandated lead arranger and book runner, DNB
Bank ASA, New York Branch, as facility agent and security
trustee, and DNB Capital LLC, as lender.
The principal amount of the 2017 Bridge Loan is due on or before
August 8, 2018 (the “Maturity Date”) and accrues interest on
the outstanding principal amount at a rate of LIBOR plus 2.50%
for the period ending December 7, 2017; LIBOR plus 4.50% for the
period from December 8, 2017 until March 7, 2018; LIBOR plus
6.50% for the period March 8, 2018 until June 7, 2018, and 8.50%
from June 8, 2018 until the Maturity Date.
August 8, 2018 (the “Maturity Date”) and accrues interest on
the outstanding principal amount at a rate of LIBOR plus 2.50%
for the period ending December 7, 2017; LIBOR plus 4.50% for the
period from December 8, 2017 until March 7, 2018; LIBOR plus
6.50% for the period March 8, 2018 until June 7, 2018, and 8.50%
from June 8, 2018 until the Maturity Date.
The proceeds of the 2017 Bridge Loan were used to repay in full
the Company’s term loans with the Royal Bank of Scotland (the
“RBS Loan Facility”) at approximately 96% of the then
outstanding principal amount. The remaining proceeds were used to
pay accrued interest, legal, arrangement and advisory fees
related to the 2017 Bridge Loan. As part of this transaction,
$6.0 million of cash previously restricted under the RBS Loan
Facility was released as unrestricted cash for use in operations.
the Company’s term loans with the Royal Bank of Scotland (the
“RBS Loan Facility”) at approximately 96% of the then
outstanding principal amount. The remaining proceeds were used to
pay accrued interest, legal, arrangement and advisory fees
related to the 2017 Bridge Loan. As part of this transaction,
$6.0 million of cash previously restricted under the RBS Loan
Facility was released as unrestricted cash for use in operations.
The 2017 Bridge Loan provides that it be secured by, among other
things, (i) first priority mortgages on the four Very Large Gas
Carriers (“VLGCs”) that were financed under the RBS Loan
Facility (the Captain John NP, Captain Markos NL, Captain
Nicholas ML and Corsair), (ii) first assignments of all freights,
earnings and insurances relating to these four VLGCs and (iii)
pledges of membership interests of the borrowers.
things, (i) first priority mortgages on the four Very Large Gas
Carriers (“VLGCs”) that were financed under the RBS Loan
Facility (the Captain John NP, Captain Markos NL, Captain
Nicholas ML and Corsair), (ii) first assignments of all freights,
earnings and insurances relating to these four VLGCs and (iii)
pledges of membership interests of the borrowers.
The 2017 Bridge Loan also contains customary covenants that
require us to maintain adequate insurance coverage, properly
maintain the vessels and to obtain the lender’s prior consent
before changes are made to the flag, class or management of the
vessels. The 2017 Bridge Loan includes customary events of
default, including those relating to a failure to pay principal
or interest, breaches of covenants, representations and
warranties, a cross-default to other indebtedness and
non-compliance with security documents, and customary
restrictions on the borrowers paying dividends if an event of
default has occurred and is continuing, or if an event of default
would result therefrom.
require us to maintain adequate insurance coverage, properly
maintain the vessels and to obtain the lender’s prior consent
before changes are made to the flag, class or management of the
vessels. The 2017 Bridge Loan includes customary events of
default, including those relating to a failure to pay principal
or interest, breaches of covenants, representations and
warranties, a cross-default to other indebtedness and
non-compliance with security documents, and customary
restrictions on the borrowers paying dividends if an event of
default has occurred and is continuing, or if an event of default
would result therefrom.
The following financial covenants are the most restrictive from
the 2017 Bridge Loan with which the Company is required to
comply, calculated on a consolidated basis, determined and
defined according to the provisions of the loan agreement:
the 2017 Bridge Loan with which the Company is required to
comply, calculated on a consolidated basis, determined and
defined according to the provisions of the loan agreement:
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Consolidated liquidity of at least $50.0 million,
provided cash and cash equivalents, including restricted cash and all cash held in accounts by Helios LPG Pool LLC attributable to the vessels owned directly or indirectly by the Company, including no less than $10.0 million of which shall at all times be held on a freely available and unencumbered basis; |
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The ratio of consolidated net debt to consolidated total
capitalization shall not exceed 0.60 to 1.00; |
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Minimum interest coverage ratio of consolidated earnings
before interest, tax, depreciation and amortization to consolidated net interest expense must be maintained greater than or equal to (i) 1.25 until and including the quarter ended March 31, 2018, and (ii) 1.50 thereafter; |
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Minimum shareholders’ equity must be equal to the
aggregate of (i) $400.0 million, (ii) 50% of new equity raised after June 8, 2017, and (iii) 25% of the positive net income for the immediately preceding fiscal year; |
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The ratio of current assets and long-term restricted cash
divided by current liabilities less the current portion of long-term debt shall always be greater than 1.00; and |
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The ratio of the aggregate market value of the vessels
securing the loan to the principal amount outstanding under such loan at all times shall be in excess of 150%. |
The foregoing description of the 2017 Bridge Loan does not
purport to be complete and is qualified in its entirety by
reference to the full text thereof, which is filed as Exhibit
10.1 to this Current Report on Form 8-K and incorporated by
reference into this Item 1.01.
purport to be complete and is qualified in its entirety by
reference to the full text thereof, which is filed as Exhibit
10.1 to this Current Report on Form 8-K and incorporated by
reference into this Item 1.01.
Item 1.02 Termination of a Material Definitive Agreement
The information set forth in Item 1.01 above is incorporated by
reference into this Item 1.02.
reference into this Item 1.02.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The information set forth in Item 1.01 above is incorporated by
reference into this Item 2.03.
reference into this Item 2.03.
Item 8.01 Other Events
On June 9, 2017, the Company issued a press release announcing
the 2017 Bridge Loan.
the 2017 Bridge Loan.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
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Exhibit Number
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Description
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10.1
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Loan Agreement providing for a Senior Secured Bridge Term
Loan of US$97,000,000, dated June 8, 2017, by and among Corsair LPG Transport LLC, CNML LPG Transport LLC, CMNL LPG Transport LLC, CJNP LPG Transport LLC, as borrowers, the Company, as parent guarantor, DNB Markets, Inc., as mandated lead arranger and book runner, DNB Bank ASA, New York Branch, as facility agent and security trustee, and DNB Capital LLC, as lender. |
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99.1
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Press Release dated June 9, 2017
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About DORIAN LPG LTD. (NYSE:LPG)
Dorian LPG Ltd. is a holding company. The Company, through its subsidiaries, is focused on owning and operating very large gas carrier (VLGCs) in the liquefied petroleum gas (LPG) shipping industry. The Company is engaged in the transportation of LPG across the world through its ownership and operation of LPG tankers. As of March 31, 2016, the Company owned and operated a fleet of 22 VLGCs, including 19 84,000 cubic meter (cbm) ECO-design VLGCs (ECO VLGCs) and three 82,000 cbm VLGCs. The VLGCs in its fleet had an aggregate carrying capacity of approximately 1.8 million cbm at May 26, 2016. It provides in-house commercial and technical management services for all of its vessels. As of May 26, 2016, its VLGCs included Captain Nicholas ML; Captain John NP; Comet; Corsair; Corvette; Cougar; Concorde; Cobra; Continental; Commodore; Constellation; Cheyenne; Cratis; Chaparral; Commander, and Challenger. The Company’s customers include global energy companies, commodity traders and importers.
