New York-listed Navigator Holdings is forming a joint venture to buy five ethylene carriers from its partner Greater Bay Gas in China.
The new operation will be owned 60% by Navigator and 40% by Greater Bay Gas.
Over the next 15 months, the venture intends to buy five ethylene vessels operated by the Chinese company.
These were not named but appear to be the 17,000-cbm Pacific Jupiter and Pacific Venus (both built 2018), and the 22,000-cbm Pacific Mars, Mercury and Saturn (all built 2019).
They operate the UK-based Luna Pool, formed in March 2020 by Navigator, Greater Bay Gas and Singapore’s Pacific Gas.
Each ship has purchase options held by Greater Bay’s parent Equator Fund.
The total price will be $233m, Navigator said.
The two smaller ships are owned by China’s Bank of Communications Financial Leasing, while Pacific Gas owns the Mars and the Saturn, and China Huarong Financial Leasing controls the Mercury.
VesselsValue assesses the quintet as worth a combined $196m in an open-market transaction.
The purchases will be financed through commercial bank finance, with the remainder sourced from capital contributions from Navigator and Greater Bay Gas.
Navigator expects to finance its share of the capital contributions from available cash resources.
Remaining with pool
The five will continue to be commercially managed by the Luna Pool, benefiting from the experienced team there, Navigator said.
The technical manager remains Pacific Gas.
The pool has 14 ethylene ships under operation. Navigator owns the other nine.
Navigator is already the biggest owner of handysize gas vessels in the world.
Last year, it completed a $390m merger with Chile’s Ultragas to add 18 LPG ships to the fleet, which now numbers 53 vessels, 21 of which are ethylene and ethane-capable.
Mads Peter Zacho, chief executive of Navigator, said the venture was the natural next step following the setting up of the Luna pool.
The alliance will result in a reduction in the average age of Navigator’s fleet and “will allow us to take advantage of more efficient vessels, lowering emissions and offering improved economics to our customers,” he added.
Zacho said: “The joint venture is accretive as it further consolidates the handysize segment and puts us in a strong position for further growth and development in an evolving marketplace.”
Greater Bay director Steven Xiao added that the pool had proved a great success.
“If the Luna Pool experience symbolised falling in love a few years ago, then we witness a happy marriage today,” he added.
