Scorpio Tankers rolls VLGC newbuilds into Dorian LPG

Scorpio Tankers Chairman and CEO Emanuele Lauro Scorpio Tankers Chairman and CEO Emanuele Lauro

OCTOBER 28, 2013 — Emanuele Lauro's Scorpio Tankers Inc. (NYSE: STNG), which has been on a VLGC ordering spree (see earlier story) today announced that it has entered into an agreement with Dorian LPG Ltd. (N-OTC: DORIAN) that will see it will contribute its entire fleet of newbuilding Very Large Gas Carriers, or VLGCs, together with a cash contribution of $1.9 million in exchange for newly issued shares representing 30% of Dorian's pro-forma outstanding shares immediately following the transaction. As of the date of the transaction, Scorpio will have paid $83.1 million in installment payments for the 11 VLGC contracts.

As part of the transaction Scorpio Tankers will obtain certain protection rights customary for significant shareholders, which will terminate upon Dorian's initial public offering and listing on a national securities exchange, which is expected to take place within 2014.

"We are pleased with this investment in Dorian LPG on several fronts, said Mr. Lauro. "We are participating in significant consolidation in the VLGC sector, creating -- in Dorian -- a preeminent owner/ operator of modern fuel efficient assets. As important, we expect our shareholders will ultimately benefit both from the expected growth of seaborne LPG demand and the success of Dorian LPG as a highly reputable, US listed security."

John Hadjipateras, Chairman of the Board of Dorian LPG commented: "We welcome Scorpio Tankers as our major investor and are pleased to have their vote of confidence in contributing to Dorian LPG all of their VLGC newbuilding contracts. The consolidation of these additional, high quality, fuel-efficient, ECO newbuildings further enhances and validates our commitment to be a very high quality owner and operator in this sector of LPG transportation."

Dorian LPG describes itself as "a pure-play LPG shipping company, combining the LPG shipping activities of Dorian (Hellas) S.A. and SEACOR," that is "set to be a leading owner and operator of modern fuel efficient Very Large Gas Carriers."

Back in May, SEACOR Holdings (NYSE: CKH) reported it had ordered two VLGCs at shipbuilding giant Hyundai Heavy Industries with options for two more. It said that these ships would be managed by Dorian (Hellas) and that Dorian also had an option to acquire or co-invest in up to 50% of the vessels under contract and on option with HHI

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