BW LPG India Sells 18-Year-Old VLGC BW Loyalty for Over $80m

BW LPG India has agreed to sell the 18-year-old, 84,601 cu m VLGC BW Loyalty for a price in the low-$80m range, booking an expected gain of about $52m on the disposal. The deal, disclosed by parent BW LPG, will deliver roughly $66m in net cash proceeds after taxes and transaction costs, calculated on a 100% ownership basis rather than the group's attributable 52% stake in the Indian subsidiary.

The 2008-built vessel will remain on its existing time charter before changing hands, with completion expected by December. The buyer has not been disclosed. For a ship now well past the 15-year mark that traditionally compresses secondhand values, a low-$80m price underscores how firmly the VLGC resale market still prices older gas tonnage.

How much has BW LPG India raised from ship sales?

The BW Loyalty disposal is the third profitable exit by the Indian operation since July, and the cumulative numbers are striking. Together, the three transactions represent approximately $194m in net cash proceeds and $125m in gains on a 100% basis — although the latest sale has yet to close.

• BW Loyalty (2008-built, 84,601 cu m): low-$80m price, ~$52m gain, ~$66m net cash; completion by December.
• BW Birch (2007-built): agreed in August, ~$64m net cash proceeds, ~$37m gain.
• BW Elm (2007-built): sold in July, ~$64m in cash, $36m book gain.

That cadence — three ships, roughly one per month since mid-summer — signals a deliberate fleet-renewal strategy rather than opportunistic trimming. BW LPG is monetising its oldest VLGCs while the secondhand market pays newbuild-adjacent prices for 2007- and 2008-vintage units.

What is funding the $940m newbuilding programme?

The disposals feed directly into BW LPG's largest newbuilding programme in years. In May, the company contracted eight 90,000 cu m panamax VLGCs at HD Hyundai Heavy Industries for approximately $940m, with deliveries scheduled between 2029 and 2030. That works out to roughly $117.5m per vessel — a figure that makes the low-$80m achieved for an 18-year-old ship look remarkably firm.

The group subsequently raised $300m through a convertible bond offering in September, with the proceeds earmarked partly for financing the newbuilding programme. Layered on top of the ~$194m in disposal proceeds, the funding stack gives BW LPG substantial headroom against the Ulsan shipyard instalments that fall due from 2029.

What does the sell-down mean for the market?

The commercial read-through cuts two ways. For BW LPG and its 52%-owned Indian arm, the sales de-risk the fleet transition: aging steam-era tonnage converts to cash at cycle-high values, and the balance sheet is pre-funded for eight fuel-efficient panamax newbuilds arriving at the turn of the decade.

For buyers — unnamed here, but paying low-$80m for continued trading — the transaction signals confidence that older VLGCs can still earn their keep on LPG routes, likely serving trades where freight economics tolerate higher fuel burn. For competing owners and forwarders watching LPG capacity, the shuffle matters less for tonnage supply — the ships keep trading — and more as a price benchmark for secondhand values across the 2007-2008 vintage cohort.

With the BW Loyalty sale closing by December and the September bond cash already banked, expect BW LPG's next capital-markets disclosures to show how quickly the $940m Hyundai Heavy orderbook begins drawing on the ~$494m raised from disposals and convertibles combined.