BW LPG expects that a dual listing on the New York Stock Exchange will increase trading in its stock and lift the company’s pricing.
“It is a big milestone. It is a new chapter that begins ... with the New York listing,” chief executive Kristian Sorensen told TradeWinds.
The BW Group-backed VLGC-owner, which is also listed in Oslo, aims to start trading in the US in the second quarter.
It has filed for the listing and is awaiting final approval from US authorities.
“Within this second quarter we should go live on the New York Stock Exchange,” Sorensen said.
Last week, Hafnia, another BW Group-backed company, began trading in New York.
“We believe the US listing will bring more liquidity in the shares. And on the back of higher liquidity, we also anticipate that the pricing of the company will improve,” Sorensen said.
About 10% of BW LPG is currently owned by US investors.
However, a dual listing in New York will offer more visibility in the US market.
“With a listing in the US, you become more investable for US investors. That is something you necessarily are not when you are only listed on the Oslo Stock Exchange,” Sorensen said.
“We will get access to the world’s largest capital market in a completely different way,” he added.
According to Sorensen, BW LPG began considering a dual listing last year after the company’s market capitalisation grew and the dividend capacity was built up.
The market value was about NOK 20bn ($1.8bn) on Wednesday.
“Our market cap and the dividend yield were ticking the boxes for US investors,” Sorensen said.
The increased visibility in the US market could also lead to strategic partnerships and investments longer term, according to the CEO.
Sorensen sees the VLGC market as “very solid” for 2024 and into 2025.
Increased exports from the US and stable exports from the Middle East combined with a small orderbook throughout 2025 support a “robust” market.
VLGC spot rates have fluctuated between $40,000 to $50,000 this year.
BW LPG has a cash breakeven of $22,300 per day.
According to Sorensen, the Panama Canal is the “wild card”.
“The canal is not a significant driver of the market right now. So there is a lot of upside in the market forecast if you think the Panama Canal again will become less available for VLGCs,” he said.
BW LPG is not raising any new equity in connection with the US listing.
The company is not planning to buy any new vessels due to high prices, instead it has sold some older ships.
“We are happy with the fleet we have. We don’t have plans to sell any more vessels at the moment. Although in shipping everything is for sale at the right price,” Sorensen said.
The 82,383-cbm BW Princess (built 2008), which was sold last year, was delivered to its new owners at the end of the first quarter.
“We believe we create more shareholder value by paying dividends rather than investing in historically very high-priced and expensive ships,” he added.
