Dorian LPG Amends Debt Facility

Dorian LPG US-based owner and operator of very large gas carriers (VLGCs) Dorian LPG has entered into an agreement with its lenders to amend certain terms of the companys debt facility that closed in March 2015. Banks have agreed to relax certain covenants of the 2015 debt facility and release USD 26.8 million of restricted cash to be applied towards future debt repayments, interest and certain fees. Following the prepayment, amounts due under the 2015 debt facility are USD 645.4 million, the company said. With trade fundamentals continuing to develop favorably in the global LPG market and our continued focus on our chartering policy and managing our costs, we are well positioned for the future. We are grateful to our lending banks for their flexibility and contribution to finalizing this amendment, John Hadjipateras, Chairman and Chief Executive Officer of Dorian LPG, commented. We are pleased to have proactively worked with our banks to secure further financial flexibility for Dorian in a manner that also reduces debt and improves our cash breakeven levels. We believe that this amendment will give us greater potential to build our cash reserves at a low point in the cycle, Ted Young, Chief Financial Officer of Dorian LPG, added. As one of the key provisions of the amendment, USD 26.8 million of restricted cash has been released to the company to prepay debt, interest and certain fees. USD 24.8 million of the released restricted cash will be applied to the next two debt principal payments, thereby reducing the companys cash breakeven levels by USD 6,176 per calendar day over the next six months. Dorian LPG has agreed to recontribute USD 22 million to the restricted cash account over the next 12 months unless it raises USD 50 million of common stock. In addition, the maximum level of minimum liquidity has been permanently reduced to USD 40 MM, and the definition thereof has also been expanded for one year to capture other cash balances previously excluded. Furthermore, minimum interest coverage ratio of consolidated EBITDA to consolidated net interest expense would be reduced from 2.00x to 1.25x for the twelve months ending March 31, 2018, and to 1.50x for the twelve months ending March 31, 2019. Thereafter, the covenant will revert to the previously agreed level of 2.50. Minimum value the ratio of the value of the pledged vessels to the outstanding debt has also been amended to 125% for the twelve months ending March 31, 2018, and 130% for the twelve months ending March 31, 2019. Following this, the covenant shall revert to the previously agreed level of 135%. If the company completes a USD 50 million common stock offering, limitations related to the companys ability to declare dividends and repurchase shares of company stock will be eliminated, and the minimum liquidity requirement will be further decreased. In any event, the limitation on dividends and share repurchases will terminate two years from the date hereof, according to Dorian LPG. Currently, Dorian LPG owns and operates a fleet of 22 VLGCs.