Oslo-listed BW Epic Kosan (BWEK) revealed on Monday that it bought two ethylene carriers in a deal that marks the exit of seller Odfjell SE from the gas carrier market.
The 9,000-cbm Bow Guardian and Bow Gallant (both built 2008) are changing hands for an undisclosed amount of cash and nearly 6.9m in freely transferable shares that BWEK plans to issue.
Following completion of the transaction by the end of October, Odfjell will own a 4.3% stake in BWEK.
Odfjell may receive a further 362,611 shares in the 18 months following delivery of the two vessels, subject to “certain conditions”. Neither of the companies elaborated on the terms.
Odfjell considers its BWEK stake a “non-strategic financial investment”, as it has decided to quit the gas market.
“The transaction concludes Odfjell SE’s exit from the gas segment,” the company said.
The BW Group will continue calling the shots at BWEK following Odfjell's entry, remaining BWEK's biggest shareholder with a controlling 56% stake.
This is BWEK's first acquisition since the company was created in March after completion of a merger between Lauritzen Kosan and BW Group's Epic Gas.
The deal also helps bolster BWEK’s position as the world’s largest owner of ships carrying LPG and other specialty gases.
The Bow Guardian and Bow Gallant boost to 16 the number of ethylene carriers in BWEK's fleet with a capacity between 8,000 cbm and 10,000 cbm, making that the company’s biggest single vessel category.
Apart from that, BWEK owns another 62 ships, from small pressurised and semi-refrigerated carriers to 12,000-cbm ships carrying ethylene and LNG.
Back in the market, and then out again
The Bow Guardian and Bow Gallant had been the only gas ships in the Odfjell fleet.
The company made no secret of its intention to offload the two vessels, especially after acquiring partner Celsius Shipping's stake in joint venture Odfjell Gas.
The ships, which had been on the sales block for nearly two-and-a-half years, were fixed in November 2020 "on good-earning time charters" for 18 months by Brazil's Braskem, Odfjell chief executive Kristian Morch said in March, adding the company was in "no rush" to conclude a deal.
Odfjell had bought the two ships in the summer of 2012, in a deal that marked its return to the LPG market after more than 20 years.
The company was expected to expand further in the sector with newbuilding orders, but no such plans materialised.
The sale of its only two gas carries now will boost Odfjell’s profit and liquidity just marginally, the company said.
The deal may be more significant in highlighting the Odfjell family’s focus on its traditional chemical tanker business and its expansion into new sectors.
In February, Odfjell said it would stop ordering newbuildings for at least two years, given regulatory uncertainty and a just completed fleet-renewal programme, which was the largest in its history.
At the end of March, the Norwegian clan bought Dutch offshore vessel owner Oceanteam to gain exposure in offshore wind markets.
