Gas shipping company Navigator Holdings has signed a non-binding Letter of Intent with Naviera Ultranav Limitada to merge its fleet and business activities with Ultragas ApS.
The merger of the two gas shipping companies would bring the combined fleet to a total 56 vessels.
Specifically, Ultragas has a fleet of seven 22,000 cbm semi-refrigerated vessels, five 12,000 cbm ethylene vessels and six gas carriers in the 3,770-9,000 cbm range.
Furthermore, the combination would have reduced the average age of Navigator’s fleet to nine years.
Under the merger terms, Navigator would issue approximately 21.2 million new shares of its common stock to Ultranav, and assume Ultragas’ net debt of approximately $197 million, as well as its net working capital.
Upon share issuance, Navigator is expected to have a total of approximately 77.1 million shares of common stock outstanding, of which Ultranav would own 27.5% and BW Group would own 28.4%.
The combined entity would have an aggregate net asset value of approximately $1.3 billion.
“We are delighted that the von Appen family, with its long history in global shipping, are entrusting their modern LPG fleet to Navigator. The combination will result in a LPG and petrochemical shipping company with unmatched scale and diversification,” David Butters , Executive Chairman of the Board of Navigator.
“ The Ultragas fleet will significantly strengthen our position in the handysized sector and provide our customers with greater flexibility in transporting smaller parcels in a cost-advantaged basis.”
Ultranav’s Chairman Dag von Appen would join Navigator’s Board of Directors at the time of closing of the proposed merger together with Peter Stokes, a current board member of Ultranav and former Senior Advisor and head of Shipping at Lazard.
Andreas Sohmen-Pao , Chairman of BW Group Limited, is also expected to join the board.
“We look forward to joining Navigator Gas with its sound values and strong governance which fits well with our value to be a ‘partner you can trust’ in all respects. We believe this new setup will provide additional value to our customers by increasing flexibility, geographical coverage and access to a modern fleet of 56 vessels,” Dag von Appen commented.
The transaction is subject to the execution of a definitive share purchase agreement, approval by the boards of directors of both Navigator and Ultragas, regulatory approvals and other customary closing conditions.
It is expected that the merger would be closed by the end of the second quarter of 2021.