LPG shipping heavyweight Epic Gas, and Lauritzen Kosan A/S, the gas carrier division of J. Lauritzen, have entered into a deal to combine their fleet and business activities to create BW Epic Kosan.
The combination will create a genuine powerhouse in the last mile delivery of LPG and other speciality gases and petrochemicals.
Under the agreement, Lauritzen Kosan will contribute 34 gas carriers to Epic Gas’ fleet of 43 pressurised gas vessels, in addition to certain other assets, in exchange for new shares in Epic Gas equivalent to a 27% stake.
The new company will be headquartered in Singapore, with Copenhagen as a regional office alongside offices in London, Manila, and Tokyo.
The current CEO of Epic Gas Charles Maltby will be CEO of the combined entity, Lauritzen Kosan’s CEO Thomas Wøidemann will lead the commercial organisation, and Epic Gas CFO Uta Urbaniak-Sage will be CFO.
BW Epic Kosan will have the combined fleet of 77 LPG/ethylene vessels that will range in size from 3,500 cbm to 12,000 cbm.
Of these, 53 of the vessels will be wholly-owned, with a gross asset value of $900 million.
“This transaction combines two well reputed operators into a strong new entity in the sector. We welcome our colleagues from Lauritzen Kosan and look forward to working together to build a great company delivering cleaner energy and feedstock to communities around the world,” Andreas Sohmen-Pao , Chairman of Epic Gas, said.
“This will help to improve operational efficiencies and deliver an enhanced service offering to our customers. With a large and modern fleet spanning LPG and other petrochemical gases, BW Epic Kosan will be well positioned to deliver value for customers, while meeting IMO objectives for decarbonisation,” Tommy Thomsen , CEO of the Lauritzen Foundation and Chairman of Lauritzen Kosan, added.
As a part of this transaction, BW Epic Kosan has secured committed finance for the Lauritzen Kosan fleet at $ 155 million from SEB, Danske Bank, Nordea, Danish Ship Finance and Crédit Agricole CIB.
Post-completion, BW Group will be the largest shareholder in BW Epic Kosan with 58%, followed by J. Lauritzen A/S with 27%, Tailwind, and Epic’s existing minority shareholders. The shares will continue to trade on Euronext Growth Oslo as EPIC.
Completion of the transaction is subject to obtaining necessary competition clearances, as well as other customary closing conditions. The transaction is expected to close by the end of Q1 2021.