o
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
March 31, 2014
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _________________ to _________________
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o
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of event requiring this shell company report _________________
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Dorian LPG Ltd.
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(Exact name of Registrant as specified in its charter)
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(Translation of Registrant's name into English)
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Republic of the Marshall Islands
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(Jurisdiction of incorporation or organization)
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Dorian LPG Ltd., c/o Dorian LPG (USA) LLC, 27 Signal Road, Stamford, Connecticut 06902
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(Address of principal executive offices)
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Mr. Theodore B. Young
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(203) 674-9695
Dorian LPG Ltd., c/o Dorian LPG (USA) LLC, 27 Signal Road, Stamford, Connecticut 06902
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(Name, Telephone, E-mail and/or Facsimile, and address of Company Contact Person)
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Title of each class
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Name of each exchange on which registered
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Common stock, par value $0.01 per share
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New York Stock Exchange
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NONE
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(Title of class)
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NONE
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(Title of class)
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Yes
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No
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X
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Yes
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X
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No
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Yes
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X
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No
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Yes
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X
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No
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
x
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X
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U.S. GAAP
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International Financial Reporting Standards as issued by the international Accounting Standards Board
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Other
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Item 17
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Item 18
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Yes
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No
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X
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PART I
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1
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||
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ITEM 1.
|
1
|
|
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ITEM 2.
|
1
|
|
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ITEM 3.
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1
|
|
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ITEM 4.
|
22
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ITEM 4A.
|
35
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|
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ITEM 5.
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35
|
|
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ITEM 6.
|
48
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|
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ITEM 7.
|
52
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|
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ITEM 8.
|
54
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|
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ITEM 9.
|
55
|
|
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ITEM 10.
|
56
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|
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ITEM 11.
|
65
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|
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ITEM 12.
|
65
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PART II
|
66
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||
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ITEM 13.
|
66
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ITEM 14.
|
66
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ITEM 15.
|
66
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ITEM 16A.
|
66
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ITEM 16B.
|
66
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ITEM 16C.
|
67
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|
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ITEM 16D.
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67
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ITEM 16E.
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67
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ITEM 16F.
|
67
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|
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ITEM 16G.
|
67
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|
|
ITEM 16H.
|
68
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PART III
|
69
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||
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ITEM 17.
|
69
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|
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ITEM 18.
|
69
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|
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ITEM 19.
|
69
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|
• | future operating or financial results; |
• | our limited operating history; |
• | pending or recent acquisitions, business strategy and expected capital spending or operating expenses; |
• | future production of LPG, refined petroleum products and oil prices; |
• | infrastructure to support marine transportation of LPG, including pipelines and terminals; |
• | competition in the marine transportation industry; |
• | oversupply of LPG vessels comparable to ours; |
• | future supply and demand for oil and refined petroleum products and natural gas of which LPG is a byproduct; |
• | global and regional economic and political conditions; |
• | shipping market trends, including charter rates, factors affecting supply and demand and world fleet composition; |
• | ability to employ our vessels profitably; |
• | our limited number of assets and small number of customers; |
• | performance by the counterparties to our charter agreements; |
• | termination of our customer contracts; |
• | delays and cost overruns in vessel construction projects; |
• | our ability to incur additional indebtedness under and compliance with restrictions and covenants in our debt agreements; |
• | our need for cash to meet our debt service obligations and to pay installments in connection with our newbuilding vessels; |
• | our levels of operating and maintenance costs; |
• | our dependence on key personnel; |
• | availability of skilled workers and the related labor costs; |
• | compliance with governmental, tax, environmental and safety regulation; |
• | changes in tax laws, treaties or regulations; |
• | any non‑compliance with the U.S. Foreign Corrupt Practices Act of 1977 ("the FCPA"), the U.K. Bribery Act 2010, or other applicable regulations relating to bribery; |
• | general economic conditions and conditions in the oil and natural gas industry; |
• | effects of new products and new technology in our industry; |
• | operating hazards in the maritime transportation industry; |
• | adequacy of insurance coverage in the event of a catastrophic event; |
• | the volatility of the price of our common shares; |
• | our incorporation under the laws of the Republic of the Marshall Islands and the limited rights to relief that may be available compared to other countries, including the United States; |
• | our financial condition and liquidity, including our ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate activities, the terms of such financing and our ability to comply with covenants set forth in our existing and future financing arrangements; and |
• | expectations regarding vessel acquisitions. |
A. | Selected Financial Data |
|
Dorian LPG Ltd.
|
Predecessor Businesses of Dorian LPG Ltd.
|
||||||||||||||
|
Period July 1
(inception) To March 31, |
Period April 1,
2013 To |
Years Ended March 31,
|
|||||||||||||
|
2014
|
July 28, 2013
|
2013
|
2012
|
||||||||||||
|
(in U.S. dollars, except fleet data)
|
|||||||||||||||
|
|
|
|
|
||||||||||||
Statement of Operations Data
|
|
|
|
|
||||||||||||
Revenues
|
$
|
29,633,700
|
$
|
15,383,116
|
$
|
38,661,846
|
$
|
34,571,042
|
||||||||
Expenses
|
||||||||||||||||
Voyage expenses
|
6,670,971
|
3,623,872
|
8,751,257
|
2,075,698
|
||||||||||||
Voyage expenses‑related party
|
—
|
198,360
|
505,926
|
448,683
|
||||||||||||
Vessel operating expenses
|
8,394,959
|
4,638,725
|
12,038,926
|
14,410,349
|
||||||||||||
Management fees‑related party
|
3,122,356
|
601,202
|
1,824,000
|
1,824,000
|
||||||||||||
Depreciation and amortization
|
6,620,372
|
3,955,309
|
12,024,829
|
11,847,628
|
||||||||||||
General and administrative expenses
|
433,674
|
28,204
|
157,039
|
80,552
|
||||||||||||
Total expenses
|
25,242,332
|
13,045,672
|
35,301.977
|
30,686,910
|
||||||||||||
Operating income
|
4,391,368
|
2,337,444
|
3,359,869
|
3,884,132
|
||||||||||||
Other income/(expenses)
|
||||||||||||||||
Interest and finance costs
|
(1,579,206
|
)
|
(762,815
|
)
|
(2,568,985
|
)
|
(2,415,855
|
)
|
||||||||
Interest income
|
428,201
|
98
|
598
|
504
|
||||||||||||
(Loss)/Gain on derivative, net
|
(1,104,001
|
)
|
2,830,205
|
(5,588,479
|
)
|
(10,943,316
|
)
|
|||||||||
Foreign currency gain/(loss), net
|
697,481
|
(5
|
)
|
(53,700
|
)
|
2,215
|
||||||||||
Total other income/(expenses), net
|
(1,557,525
|
)
|
2,067,483
|
(8,210,566
|
)
|
(13,356,452
|
)
|
|||||||||
Net income/(loss)
|
$
|
2,833,843
|
$
|
4,404,927
|
$
|
(4,850,697
|
)
|
$
|
(9,472,320
|
)
|
||||||
Earnings per common share, basic and diluted
|
$
|
0.09
|
—
|
—
|
—
|
|||||||||||
Other Financial Data
|
||||||||||||||||
Adjusted EBITDA(1)
|
$
|
12,137,422
|
$
|
6,292,846
|
$
|
15,331,596
|
$
|
15,734,479
|
||||||||
Fleet Data
|
||||||||||||||||
Calendar days
|
984
|
476
|
1,460
|
1,464
|
||||||||||||
Available days
|
964
|
476
|
1,447
|
1,421
|
||||||||||||
Operating days
|
941
|
449
|
1,359
|
1,405
|
||||||||||||
Fleet utilization
|
97.7
|
%
|
94.3
|
%
|
93.9
|
%
|
98.9
|
%
|
||||||||
Average Daily Results
|
||||||||||||||||
Time charter equivalent rate
|
$
|
24,402
|
$
|
25,748
|
$
|
21,637
|
$
|
22,809
|
||||||||
Daily vessel operating expenses
|
$
|
8,531
|
$
|
9,745
|
$
|
8,246
|
$
|
9,843
|
|
Dorian LPG Ltd.
|
Predecessor Businesses of Dorian LPG Ltd.
|
||||||
|
As of
March 31, 2014
|
As of
March 31, 2013
|
||||||
|
(in U.S. dollars)
|
|||||||
Balance Sheet Data
|
|
|
||||||
Cash and cash equivalents
|
$
|
279,131,795
|
$
|
1,041,644
|
||||
Restricted cash, current
|
30,948,702
|
—
|
||||||
Restricted cash, non‑current
|
4,500,000
|
—
|
||||||
Total assets
|
840,245,766
|
194,447,604
|
||||||
Total liabilities
|
148,046,334
|
181,689,814
|
||||||
Total shareholders' / owners' equity
|
692,199,432
|
12,757,790
|
(1) | Adjusted EBITDA represents net income before interest and finance costs, loss/(gain) on derivatives and depreciation and amortization and is used as a supplemental financial measure by management to assess our financial and operating performance. We believe that adjusted EBITDA assists our management and investors by increasing the comparability of our performance from period to period. This increased comparability is achieved by excluding the potentially disparate effects between periods, and depreciation and amortization expense, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect net income between periods. We believe that including adjusted EBITDA as a financial and operating measure benefits investors in selecting between investing in us and other investment alternatives. |
|
Dorian LPG Ltd.
|
Predecessor Businesses of Dorian LPG Ltd.
|
||||||||||||||
|
Period July 1
(inception) To March 31, |
Period April 1,
2013 To |
Years Ended March 31,
|
|||||||||||||
|
2014
|
July 28, 2013
|
2013
|
2012
|
||||||||||||
|
(in U.S. dollars)
|
|||||||||||||||
Net income/(loss)
|
$
|
2,833,843
|
$
|
4,404,927
|
$
|
(4,850,697
|
)
|
$
|
(9,472,320
|
)
|
||||||
Interest and finance costs
|
1,579,206
|
762,815
|
2,568,985
|
2,415,855
|
||||||||||||
Loss /(Gain) on derivatives, net
|
1,104,001
|
(2,830,205
|
)
|
5,588,479
|
10,943,316
|
|||||||||||
Depreciation and amortization
|
6,620,372
|
3,955,309
|
12,024,829
|
11,847,628
|
||||||||||||
Adjusted EBITDA
|
$
|
12,137,422
|
$
|
6,292,846
|
$
|
15,331,596
|
$
|
15,734,479
|
B. | Capitalization and Indebtedness |
C. | Reasons for the Offer and Use of Proceeds |
D. | Risk Factors |
• | the operator's industry relationships, experience and reputation for customer service, quality operations and safety; |
• | the quality, experience and technical capability of the crew; |
• | the experience of the crew with the operator and type of vessel; |
• | the operator's relationships with shipyards and the ability to get suitable berths; |
• | the operator's construction management experience, including the ability to obtain on‑time delivery of new vessels according to customer specifications; |
• | the operator's willingness to accept operational risks pursuant to the charter, such as allowing termination of the charter for force majeure events; and |
• | the competitiveness of the bid in terms of overall price. |
• | maintain a ratio of cash flow from operations before interest expense to cash debt service costs of not less than 0.8:1 through December 31, 2014; and 1:1 at all times thereafter; |
• | maintain minimum shareholders' equity, as adjusted for any reduction in the vessel fair market value, of not less than $85 million; |
• | maintain a minimum cash balance of $10 million at the end of each quarter and minimum cash balances of $1.5 million per mortgaged vessel in a pledged account with the lender at all times; |
• | ensure that our debt to adjusted equity ratio does not at any time exceed 150%; |
• | maintain a ratio of the aggregate market value of the vessels securing the loan to the principal amount outstanding under such loan, plus 50% of the related swap exposure up to September 30, 2014 and 100% of such exposure thereafter, at all times in excess of 125%; and |
• | not pay dividends in excess of free cash flow if an event of default is occurring. |
• | locating and acquiring suitable vessels; |
• | identifying and completing acquisitions or joint ventures; |
• | integrating any acquired LPG carriers or businesses successfully with our existing operations; |
• | hiring, training and retaining qualified personnel and crew to manage and operate our growing business and fleet; |
• | expanding our customer base; and |
• | obtaining required financing. |
• | supply and demand for LPG products; |
• | worldwide production of natural gas; |
• | global and regional economic conditions; |
• | the distance LPG products are to be moved by sea; |
• | availability of competing LPG vessels; |
• | availability of alternative transportation means; |
• | changes in seaborne and other transportation patterns; |
• | development and exploitation of alternative fuels and non‑conventional hydrocarbon production; |
• | governmental regulations, including environmental or restrictions on offshore transportation of natural gas; |
• | local and international political, economic and weather conditions; |
• | domestic and foreign tax policies; |
• | accidents, severe weather, natural disasters and other similar incidents relating to the natural gas industry; and |
• | weather. |
• | the number of newbuilding deliveries; |
• | the scrapping rate of older vessels; |
• | LPG vessel prices; |
• | changes in environmental and other regulations that may limit the useful lives of vessels; and |
• | the number of vessels that are out of service. |
• | adverse global or regional economic or political conditions, particularly in LPG consuming regions, which could reduce energy consumption; |
• | a reduction in global or general industrial activity specifically in the plastics and chemical industries; |
• | increases in the cost of petroleum and natural gas from which LPG is derived; |
• | decreases in the consumption of LPG or natural gas due to availability of new, alternative energy sources or increases in the price of LPG or natural gas relative to other energy sources or other factors making consumption of LPG or natural gas less attractive; and |
• | increases in pipelines for LPG, which are currently few in number, linking production areas and industrial and residential areas consuming LPG, or the conversion of existing non‑petroleum gas pipelines to petroleum gas pipelines in those markets. |
• | authorizing our board of directors to issue "blank check" preferred shares without shareholder approval; |
• | providing for a classified board of directors with staggered, three‑year terms; |
• | authorizing the removal of directors only for cause; limiting the persons who may call special meetings of shareholders; |
• | establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by shareholders at shareholder meetings; and |
• | restricting business combinations with interested stockholders. |
A. | History and Development of the Company |
B. | Business Overview |
|
Capacity
(Cbm) |
Shipyard
|
Sister
Ships |
Year Built/
Scheduled Delivery(1) |
ECO
Vessel(2) |
Charterer
|
Charter
Expiration(1) |
OPERATING FLEET
|
|
|
|
|
|
|
|
VLGC
|
|
|
|
|
|
|
|
Captain Nicholas ML
(3)
|
82,000
|
Hyundai
|
A
|
2008
|
—
|
Spot
|
—
|
Captain John NP
(3)
|
82,000
|
Hyundai
|
A
|
2007
|
—
|
Spot
|
—
|
Captain Markos NL
(3)(4)
|
82,000
|
Hyundai
|
A
|
2006
|
—
|
Statoil
|
Q4 2014
|
|
|
|
|
|
|
Shell
|
Q4 2019
|
Comet
(5)
|
84,000
|
Hyundai
|
B
|
2014
|
X
|
Shell
|
Q4 2019
|
|
|
|
|
|
|
|
|
Small Pressure
|
|
|
|
|
|
|
|
Grendon
|
5,000
|
Higaki
|
|
1996
|
—
|
Spot
|
—
|
NEWBUILDING VLGCs
|
|
|
|
|
|
|
|
Corsair
(6)
|
84,000
|
Hyundai
|
B
|
Q3 2014
|
X
|
—
|
—
|
Corvette
|
84,000
|
Hyundai
|
B
|
Q4 2014
|
X
|
—
|
—
|
Cougar
|
84,000
|
Hyundai
|
B
|
Q2 2015
|
X
|
—
|
—
|
Cobra
|
84,000
|
Hyundai
|
B
|
Q2 2015
|
X
|
—
|
—
|
Continental
|
84,000
|
Hyundai
|
B
|
Q2 2015
|
X
|
—
|
—
|
Concorde
|
84,000
|
Hyundai
|
B
|
Q2 2015
|
X
|
—
|
—
|
Constitution
|
84,000
|
Hyundai
|
B
|
Q2 2015
|
X
|
—
|
—
|
Commodore
|
84,000
|
Hyundai
|
B
|
Q3 2015
|
X
|
—
|
—
|
Constellation
|
84,000
|
Hyundai
|
B
|
Q3 2015
|
X
|
—
|
—
|
Cresques
|
84,000
|
Daewoo
|
C
|
Q3 2015
|
X
|
—
|
—
|
Cheyenne
|
84,000
|
Hyundai
|
B
|
Q4 2015
|
X
|
—
|
—
|
Clermont
|
84,000
|
Hyundai
|
B
|
Q4 2015
|
X
|
—
|
—
|
Chaparral
|
84,000
|
Hyundai
|
B
|
Q4 2015
|
X
|
—
|
—
|
Commander
|
84,000
|
Hyundai
|
B
|
Q4 2015
|
X
|
—
|
—
|
Cratis
|
84,000
|
Daewoo
|
C
|
Q4 2015
|
X
|
—
|
—
|
Copernicus
|
84,000
|
Daewoo
|
C
|
Q4 2015
|
X
|
—
|
—
|
Challenger
|
84,000
|
Hyundai
|
B
|
Q1 2016
|
X
|
—
|
—
|
Caravel
|
84,000
|
Hyundai
|
B
|
Q1 2016
|
X
|
—
|
—
|
Total
|
1,847,000
|
|
|
|
|
|
|
(1) | Represents calendar year quarters. |
(2) | Represents vessels with very low revolutions per minute, long‑ stroke, electronically controlled engines, larger propellers, advanced hull design, and low friction paint. |
(3) | Restricted cash of $4.5 million pledged against these VLGCs as of March 31, 2014. Each of the vessels is secured and cross-collaterallized by first priority mortgages. |
(4) | Currently on time charter at a base rate of $500,000 per month and a 100% profit share based on average spot market rates between the base rate of $500,000 per month and a maximum rate of $1,050,000 per month. Commencing on or about November 1, 2014, on time charter to Shell at a rate of $850,000 per month for a period of 5 years. |
(5) | Delivered on July 25, 2014 and on time charter beginning July 25, 2014 at a rate of $945,000 per month. |
(6) | Restricted cash of $30.9 million pledged against this vessel as of March 31, 2014. The vessel will be mortgaged as security upon delivery as described in Note 11 to our consolidated financial statements included herein. |
• | natural resource damages and related assessment costs; |
• | real and personal property damages; |
• | net loss of taxes, royalties, rents, profits or earnings capacity; |
• | lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; |
• | net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards; and |
• | loss of subsistence use of natural resources. |
• | on‑board installation of automatic identification systems to provide a means for the automatic transmission of safety‑related information from among similarly equipped ships and shore stations, including information on a ship's identity, position, course, speed and navigational status; |
• | on‑board installation of ship security alert systems, which do not sound on the vessel but only alerts the authorities on shore; |
• | the development of vessel security plans; |
• | ship identification number to be permanently marked on a vessel's hull; |
• | a continuous synopsis record kept onboard showing a vessel's history including, the name of the ship and of the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship's identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and |
• | compliance with flag state security certification requirements. |
C. | Organizational Structure |
D. | Property, Plant and Equipment |
• | reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values; |
• | news and industry reports of similar vessel sales; |
• | approximate market values for our vessels or similar vessels that we have received from shipbrokers, whether solicited or unsolicited, or that shipbrokers have generally disseminated; |
• | offers that we may have received from potential purchasers of our vessels; and |
• | vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and various other shipping industry participants and observers. |
Vessels
|
Capacity
(Cbm) |
Year Built
|
Date of
Acquisition |
Purchase Price
|
Carrying value(1)
|
|||||||||||||||
Captain Nicholas ML
|
82,000
|
2008
|
7/29/2013
|
67,848,473
|
66,123,231
|
|||||||||||||||
Captain John NP
|
82,000
|
2007
|
7/29/2013
|
65,187,174
|
63,117,421
|
|||||||||||||||
Captain Markos NL
|
82,000
|
2006
|
7/29/2013
|
61,421,882
|
59,448,443
|
|||||||||||||||
Grendon
|
5,000
|
1996
|
7/29/2013
|
6,625,000
|
6,145,771
|
|||||||||||||||
|
201,082,529
|
194,834,866
|
(1) | Our vessels are stated at carrying values (refer to our accounting policy in Note 2 to our financial statements). As of March 31, 2014, the estimated market value of each of our vessels is greater than its carrying value and hence no impairment was recorded. Impairment charges, if any, would be determined as described above. |
A. | Operating Results |
• | Increases of $4.4 million in charter revenue and $0.5 million in demurrage revenue relating to one VLGC as it transitioned from time charter to voyage charter; |
• | A decrease in profit share revenue of $0.8 million relating to one VLGC as it transitioned from time charter to voyage charter |
• | An increase of $0.4 million in the year ended March 31, 2013 due to no drydockings in the year ended March 31, 2013. |
B. | Liquidity and Capital Resources |
|
Dorian LPG Ltd.
|
Predecessor
|
||||||||||||||
|
July 1, 2013
to March 31, |
April 1, 2013
to |
Years ended March 31,
|
|||||||||||||
|
2014
|
July 28, 2013
|
2013
|
2012
|
||||||||||||
Net cash provided by operating activities
|
$
|
7,236,422
|
$
|
4,670,470
|
$
|
8,255,783
|
$
|
10,329,677
|
||||||||
Net cash used in investing activities
|
(221,434,724
|
)
|
(90,492
|
)
|
(469,929
|
)
|
(309,717
|
)
|
||||||||
Net cash provided by/(used) in financing activities
|
493,322,093
|
(5,606,000
|
)
|
(8,784,500
|
)
|
(10,397,000
|
)
|
|||||||||
Net increase/(decrease) in cash and cash equivalents
|
279,131,795
|
(1,026,022
|
)
|
(998,646
|
)
|
(377,040
|
)
|
• | The ratio of cash flow from operations before interest expense to cash debt service costs (Debt Service Coverage Ratio) shall not be less than 0.8:1 through December 31, 2014; and 1:1 at all times thereafter. |
• | The Minimum Shareholders' Funds as adjusted for any reduction in the vessel fair market value shall not be less than $85 million; |
• | The ratio of Total Debt to Shareholders Funds shall not exceed 150% at all times; |
• | Minimum cash of $10 million at the end of each quarter and $1.5 million per mortgaged vessel at all times. |
C. | Research and Development, Patents and Licenses, Etc. |
D. | Trend Information |
E. | Off-Balance Sheet Arrangements |
F. | Tabular Disclosure of Contractual Obligations |
|
|
Payments due by period
|
||||||||||||||||||
|
Total
|
Less than
1 Year |
1 to 3 Years
|
3 to 5 Years
|
More than
5 Years |
|||||||||||||||
Long‑term debt obligations
|
$
|
128,718,500
|
$
|
9,612,000
|
$
|
19,224,000
|
$
|
66,880,000
|
$
|
33,002,500
|
||||||||||
Interest payments(1)
|
39,421,118
|
7,564,124
|
15,070,732
|
12,593,009
|
4,193,253
|
|||||||||||||||
Management Fees(2)
|
1,980,000
|
1,980,000
|
—
|
—
|
—
|
|||||||||||||||
Remaining payments on vessels under construction(3)
|
1,157,128,931
|
327,577,240
|
829,551,691
|
—
|
—
|
|||||||||||||||
Total
|
$
|
1,327,248,549
|
$
|
346,733,364
|
$
|
863,846,423
|
$
|
79,473,009
|
$
|
37,195,753
|
(1) | Our interest commitment on our long‑term debt is calculated based on an as assumed LIBOR rate of 0.329% (the six‑month LIBOR rate as of March 31, 2014), plus the applicable margin for the respective period as per the loan agreement and the estimated net settlement of our interest rate swaps. |
(2) | Includes management fees under the management agreements through June 30, 2014 to reflect the extension of the termination date of the management agreements. |
(3) | Includes $9.8 million of commitments for additional features not included in the contract price of the vessels and $0.7 million of supervision fees. |
G. | Safe Harbor |
A. | Directors and Senior Management |
Name
|
Age
|
Position
|
Term
Expiration |
||||||
John C. Hadjipateras
|
64
|
Chairman, President, Chief Executive Officer and Principal Executive Officer; President, Dorian LPG (USA) LLC
|
2016
|
||||||
Nigel D. Widdowson(1)
|
68
|
Director
|
2017
|
||||||
Charles Fabrikant
|
70
|
Director
|
2016
|
||||||
Øivind Lorentzen
|
64
|
Director
|
2015
|
||||||
Thomas J. Coleman(1)
|
48
|
Director
|
2017
|
||||||
Eric Fabrikant(1)
|
33
|
Director
|
2017
|
||||||
Robert Bugbee(2)
|
54
|
Director
|
2015
|
||||||
John C. Lycouris
|
64
|
Director; Chief Executive Officer, Dorian LPG (USA) LLC
|
2015
|
||||||
David G. Savett
|
33
|
Director
|
2016
|
||||||
Alexander C. Hadjipateras
|
35
|
Executive Vice President and Secretary, Dorian LPG (USA) LLC
|
|||||||
Theodore B. Young
|
46
|
Chief Financial Officer, Treasurer and Principal Financial and Accounting Officer; Chief Financial Officer and Treasurer, Dorian LPG (USA) LLC
|
(1) | At the June 30, 2014 Annual General Meeting, these directors were elected to extend their term until the 2017 Annual General Meeting. |
(2) | Scorpio Tankers has the right to appoint one director on our board of directors, which is currently Mr. Bugbee, so long as Scorpio Tankers owns at least 10% of our outstanding common shares. |
B. | Compensation |
C. | Board Practices |
D. | Employees |
E. | Share ownership |
A. | Major Shareholders |
|
Shares Beneficially
Owned as of July 23, 2014 |
|||||||
Name and Address of Beneficial Owner
|
Number
|
Percentage(1)
|
||||||
Scorpio Tankers Inc.
|
9,392,083
|
16.4
|
%
|
|||||
SeaDor Holdings LLC(2)(3)
|
9,327,135
|
16.3
|
%
|
|||||
Kensico Capital Management Corporation(5)
|
8,014,837
|
14.0
|
%
|
|||||
Dorian Holdings LLC(2)(4)
|
5,642,823
|
9.9
|
%
|
|||||
Directors and executive officers as a group
|
*
|
*
|
* | Less than 1% |
(1) | Calculated based on 57,128,494 shares issued and outstanding. |
(2) | Deemed to beneficially own these shares through Concord LPG Holdings LLC. |
(3) | SeaDor Holdings LLC is wholly-owned by SEACOR Holdings Inc. |
(4) | Dorian Holdings LLC is wholly-owned by Astromar LLC, of which John Hadjipateras, our Chairman, President and Chief Executive Officer, is a shareholder. The members of the Board of Directors of Astromar LLC are John Hadjipateras, Olympia Kedrou, Chrysanthi Xyla, Kyveli Lykouri and Eirini Dampasi. |
(5) | Michael Lowenstein and Thomas J. Coleman serve as Co‑Presidents of Kensico Capital Management Corporation and may be deemed to have voting and dispositive power over the shares held by Kensico Capital Management Corporation. |
B. | Related Party Transactions |
• | 100% of the interests in three vessel‑owning subsidiaries (these subsidiaries own the Captain Nicholas ML , Captain John NP and Captain Markos NL , respectively); |
• | 100% of the interests in two subsidiaries which collectively have newbuilding contracts for two VLGCs, option rights to construct an additional 1.5 VLGCs and $2.65 million in cash; and |
• | $9.7 million in cash ($7.4 million of which was used to reimburse Dorian Holdings for an advance for vessels under construction and $2.3 million was used for the reimbursement of the cost of onboard inventories and LPG coolant). |
C. | Interests of Experts and Counsel |
A. | Consolidated Statements and Other Financial Information |
B. | Significant Changes |
A. | Offer and Listing Details |
|
NYSE
|
Norwegian OTC List
|
||||||||||||||
|
High
(US$) |
Low
(US$) |
High
(NOK) |
Low
(NOK) |
||||||||||||
For the Fiscal Year Ended
|
|
|
|
|
||||||||||||
March 31, 2014 (from July 30, 2013)
|
$
|
—
|
$
|
—
|
127.50
|
70.00
|
||||||||||
|
NYSE
|
Norwegian OTC List
|
||||||||||||||
|
High
(US$) |
Low
(US$) |
High
(NOK) |
Low
(NOK) |
||||||||||||
For the Quarter Ended
|
||||||||||||||||
Third quarter 2013 (from July 30, 2013, the initial listing date, through September 30, 2013)
|
—
|
—
|
80.00
|
70.00
|
||||||||||||
Fourth quarter 2013
|
—
|
—
|
115.00
|
75.00
|
||||||||||||
First quarter 2014*
|
—
|
—
|
127.50
|
106.25
|
|
NYSE
|
Norwegian OTC List
|
||||||||||||||
|
High
(US$) |
Low
(US$) |
High
(NOK) |
Low
(NOK) |
||||||||||||
For the Month
|
|
|
|
|
||||||||||||
January 2014
|
—
|
—
|
127.50
|
114.00
|
||||||||||||
February 2014
|
—
|
—
|
122.50
|
107.50
|
||||||||||||
March 2014
|
—
|
—
|
108.75
|
106.25
|
||||||||||||
April 2014
|
—
|
—
|
118.75
|
107.50
|
||||||||||||
May 2014*
|
20.55
|
17.95
|
118.00
|
105.00
|
||||||||||||
June 2014
|
24.93
|
20.19
|
132.00
|
117.00
|
||||||||||||
July 2014 (through and including July 28
,
2014)
|
24.20
|
21.38
|
132.00
|
132.00
|
|
*
|
Period for the NYSE begins on May 9, 2014
|
B. | Plan of Distribution |
C. | Markets |
D. | Selling Shareholders |
E. | Dilution |
F. | Expenses of the Issue |
A. | Share capital. |
B. | Memorandum and Articles of Association. |
C. | Material contracts |
D. | Exchange controls |
E. | Taxation |
(1) | it is organized in a "qualified foreign country" which is one that grants an "equivalent exemption" from tax to corporations organized in the United States in respect of each category of shipping income for which exemption is being claimed under Section 883; and |
(2) | one of the following tests is met: |
(A) | more than 50% of the value of its shares is beneficially owned, directly or indirectly, by "qualified shareholders," which as defined includes individuals who are "residents" of a qualified foreign country, to which we refer as the "50% Ownership Test"; or |
(B) | its shares are "primarily and regularly traded on an established securities market" in a qualified foreign country or in the United States, to which we refer as the "Publicly‑Traded Test." |
• | we have, or are considered to have, a fixed place of business in the United States involved in the earning of United States source shipping income; and |
• | substantially all of our United States source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States. |
• | at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or |
• | at least 50% of the average value of our assets during such taxable year produce, or are held for the production of, passive income. |
• | the excess distribution or gain would be allocated ratably over the Non‑Electing Holder's aggregate holding period for the common shares; |
• | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, would be taxed as ordinary income and would not be "qualified dividend income"; and |
• | the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. |
• | the dividend income is effectively connected with the Non‑United States Holder's conduct of a trade or business in the United States; or |
• | the Non‑United States Holder is an individual who is present in the United States for 183 days or more during the taxable year of receipt of the dividend income and other conditions are met. |
• | the gain is effectively connected with the Non‑United States Holder's conduct of a trade or business in the United States; or |
• | the Non‑United States Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met. |
• | fails to provide an accurate taxpayer identification number; |
• | is notified by the IRS that it has have failed to report all interest or dividends required to be shown on its federal income tax returns; or |
• | in certain circumstances, fails to comply with applicable certification requirements. |
F. | Dividends and paying agents |
G. | Statement by experts |
H. | Documents on display |
I. | Subsidiary Information |
B. | Management's Report on Internal Control over Financial Reporting |
C. | Attestation Report of the Registered Public Accounting Firm |
D. | Changes in internal control over financial reporting |
(amounts in U.S. Dollars)
|
|
|||
Audit fees
|
$
|
653,391
|
||
Audit-related fees
|
—
|
|||
Tax fees
|
—
|
|||
All other fees
|
2,020
|
|||
Total Fees
|
$
|
655,411
|
||
|
ITEM 18. | FINANCIAL STATEMENTS |
Exhibit Number
|
|
Description
|
1.1
|
|
Articles of Incorporation, incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
1.2
|
|
Bylaws, incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
1.3
|
|
Amendment to Articles of Incorporation, incorporated by reference to Exhibit 3.3 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
2.1
|
|
Form of Common Share Certificate, incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.1
|
|
Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.2
|
|
Shareholders Agreement Dorian LPG Ltd., Scorpio Tankers Inc., SeaDor Holdings LLC and Dorian Holdings LLC, incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
Purchase Agreement between Dorian LPG Ltd. and Scorpio Tankers Inc., dated November 26, 2013, incorporated by reference to Exhibit 10.3 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
|
4.4
|
|
Management Agreement, dated July 26, 2013, between CMNL LPG Transport LLC and Dorian (Hellas), SA, incorporated by reference to Exhibit 10.4 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.5
|
|
Management Agreement, dated July 26, 2013, between CJNP LPG Transport LLC and Dorian (Hellas), SA, incorporated by reference to Exhibit 10.5 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.6
|
|
Management Agreement, dated July 26, 2013, between CNML LPG Transport LLC and Dorian (Hellas), SA, incorporated by reference to Exhibit 10.6 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.7
|
|
Management Agreement, dated July 26, 2013, between Grendon Tanker LLC and Dorian (Hellas), SA, incorporated by reference to Exhibit 10.7 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.8
|
|
Option and Assignment Agreement among Dorian LPG Ltd., Dorian Holdings, Dorian (Hellas) and Seacor Gas Transport Corporation, dated July 29, 2013, incorporated by reference to Exhibit 10.8 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.9
|
|
Contribution and Release Agreement between Dorian LPG Ltd. and, Dorian (Hellas), SA and SeaDor Holdings LLC, dated July 29, 2013, incorporated by reference to Exhibit 10.9 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.10
|
|
$135.2 million Term Loan Facility, dated July 29, 2013, between CJNP LPG Transport LLC, CMNL LPG Transport LLC, CNML LPG Transport LLC, Corsair LPG Transport LLC, Dorian LPG Ltd. and The Royal Bank of Scotland plc, incorporated by reference to Exhibit 10.10 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.11
|
|
Contribution and Conveyance Agreement, dated July 29, 2013, between Dorian LPG Ltd. and Dorian Holdings LLC, incorporated by reference to Exhibit 10.11 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.12
|
|
Charter Party Agreement with Petredec Limited with respect to
Grendon
, dated May 27, 2011, as amended, incorporated by reference to Exhibit 10.12 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.13
|
|
Charter Party Agreement with Statoil ASA with respect to
Captain Markos NL
, dated October 20, 2010, incorporated by reference to Exhibit 10.13 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.14
|
|
Charter Party Agreement with Statoil ASA with respect to
Captain Nicholas ML
, dated April 7, 2008, incorporated by reference to Exhibit 10.14 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.15
|
|
Transition Agreement, dated July 29, 2013, as amended, by and between Dorian LPG (USA) LLC and Eagle Ocean Transport Inc., incorporated by reference to Exhibit 10.15 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.16
|
|
Transition Agreement, dated July 29, 2013, as amended, by and between Dorian LPG (USA) LLC. and Highbury Shipping Services Ltd., incorporated by reference to Exhibit 10.16 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.17
|
|
Transition Agreement, dated July 29, 2013, as amended, by and between Dorian LPG Management Corp. and Dorian (Hellas) S.A., incorporated by reference to Exhibit 10.17 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.18
|
|
Newbuilding Services Agreement, dated July 26, 2013, by and between Dorian LPG Ltd. and Dorian (Hellas) S.A., incorporated by reference to Exhibit 10.18 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.19
|
|
Supplemental Letter to $135.2 million Term Loan Facility, dated October 18, 2013, incorporated by reference to Exhibit 10.19 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.20
|
|
Form of Registration Rights Agreement by and between Dorian LPG Ltd. and Kensico Capital Management Corporation, incorporated by reference to Exhibit 10.20 to the Company's Registration Statement on Form F-1 (Registration Number 333- 194434)
|
|
|
|
4.21
|
|
Form of Vessel Management Agreement with Dorian LPG Management Corp. (Captain Markos NL)
|
4.22 | Form of General Agency Agreement with Dorian LPG Management Corp. (Captain Markos NL) | |
4.23 | Newbuilding Service Agreement between Dorain LPG Ltd. and Dorian LPG (USA) LLC | |
4.24 | Administrative, Advisory and Support Services Agreement between Dorian LPG Ltd. and Dorian LPG (USA) LLC | |
8.1
|
|
List of Subsidiaries
|
|
|
|
12.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
|
|
|
|
12.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
|
|
|
|
13.1
|
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
13.2
|
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101.INS*
|
|
XBRL Document
|
101.SCH* | XBRL Taxonomy Extension Schema | |
101.CAL* | XBRL Taxonomy Extension Schema Calculation Linkbase | |
101.DEF* | XBRL Taxonomy Extension Schema Definition Linkbase | |
101.LAB* | XBRL Taxonomy Extension Schema Label Linkbase | |
101.PRE* | XBRLTaxonomy Extension Schema Presentation Linkbase |
*
|
Pursuant to Rule 406T of Regulation S-T, those interactive data files are deemed not filed or part of a registration statement or prospectus for purpose of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under such sections.
|
|
|
|
|
|
Dorian LPG Ltd.
|
|
(Registrant)
|
|
|
|
/s/
John Hadjipateras
|
|
John Hadjipateras
|
|
Chief Executive Officer
|
|
|
Page
|
F‑1
|
|
F‑2
|
|
F‑3
|
|
F‑4
|
|
F‑5
|
|
F‑6
|
|
Page
|
F‑21
|
|
F‑22
|
|
F‑23
|
|
F‑24
|
|
F‑25
|
|
F‑26
|
|
Notes
|
March 31,
2014 |
||||||
Assets
|
|
|
||||||
Current assets
|
|
|
||||||
Cash and cash equivalents
|
|
279,131,795
|
||||||
Restricted cash
|
11
|
30,948,702
|
||||||
Trade receivables, net and accrued revenue
|
1,966,746
|
|||||||
Prepaid expenses and other receivables
|
343,047
|
|||||||
Due from related parties
|
3
|
1,639,497
|
||||||
Inventories
|
5
|
1,058,329
|
||||||
Total current assets
|
315,088,116
|
|||||||
Fixed assets
|
||||||||
Vessels, net
|
6
|
194,834,866
|
||||||
Vessels under construction
|
7
|
323,206,206
|
||||||
Other fixed assets, net
|
8
|
60,904
|
||||||
Total fixed assets
|
518,101,976
|
|||||||
Other non‑current assets
|
||||||||
Deferred charges, net
|
9
|
2,555,674
|
||||||
Restricted cash
|
11
|
4,500,000
|
||||||
Total assets
|
840,245,766
|
|||||||
Liabilities and Shareholders' equity
|
||||||||
Current liabilities
|
||||||||
Trade accounts payable
|
2,401,456
|
|||||||
Accrued expenses
|
10
|
2,196,386
|
||||||
Due to related parties
|
3
|
113,465
|
||||||
Deferred income
|
554,111
|
|||||||
Current portion of long‑term debt
|
11
|
9,612,000
|
||||||
Total current liabilities
|
14,877,418
|
|||||||
Long‑term liabilities
|
||||||||
Long‑term debt—net of current portion
|
11
|
119,106,500
|
||||||
Derivative instruments
|
19
|
14,062,416
|
||||||
Total long‑term liabilities
|
133,168,916
|
|||||||
Total liabilities
|
148,046,334
|
|||||||
Shareholders' equity
|
||||||||
Preferred stock, $.01 par value, 50,000,000 shares authorized, none issued nor outstanding
|
12
|
—
|
||||||
Common stock, $.01 par value, 450,000,000 shares authorized, 48,365,012
shares issued and outstanding March 31, 2014
|
12
|
483,650
|
||||||
Additional paid‑in‑capital
|
12
|
688,881,939
|
||||||
Retained earnings
|
2,833,843
|
|||||||
Total shareholders' equity
|
692,199,432
|
|||||||
Total liabilities and shareholders' equity
|
840,245,766
|
|
Notes
|
|
||||||
Revenues
|
13
|
29,633,700
|
||||||
Expenses
|
||||||||
Voyage expenses
|
14
|
6,670,971
|
||||||
Vessel operating expenses
|
15
|
8,394,959
|
||||||
Management fees—related party
|
3
|
3,122,356
|
||||||
Depreciation and amortization
|
6, 9
|
6,620,372
|
||||||
General and administrative expenses
|
433,674
|
|||||||
Total expenses
|
25,242,332
|
|||||||
Operating income
|
4,391,368
|
|||||||
Other income/(expenses)
|
||||||||
Interest and finance costs
|
16
|
(1,579,206
|
)
|
|||||
Interest income
|
428,201
|
|||||||
Loss on derivatives—net
|
19
|
(1,104,001
|
)
|
|||||
Foreign currency gain, net
|
697,481
|
|||||||
Total other income/(loss), net
|
(1,557,525
|
)
|
||||||
Net income
|
2,833,843
|
|||||||
Earnings per common share, basic and diluted
|
21
|
0.09
|
||||||
Weighted average common shares outstanding,—basic and diluted
|
32,075,897
|
|
Number of
common shares |
Common
stock |
Additional
paid‑in capital |
Retained
Earnings |
Due from
shareholder |
Total
|
||||||||||||||||||
Issuance on inception
|
100
|
1
|
99
|
—
|
(100
|
)
|
—
|
|||||||||||||||||
Cancellation—July 29, 2013
|
(100
|
)
|
(1
|
)
|
(99
|
)
|
—
|
100
|
—
|
|||||||||||||||
Issuance—July 29, 2013
(refer Note 12)
|
18,644,324
|
186,443
|
229,804,569
|
—
|
—
|
229,991,012
|
||||||||||||||||||
Issuance—November 26,
2013 (refer Note 12)
|
24,071,506
|
240,715
|
361,957,921
|
—
|
—
|
362,198,636
|
||||||||||||||||||
Issuance—February 12,
2014 (refer Note 12)
|
5,649,200
|
56,492
|
97,119,449
|
—
|
—
|
97,175,941
|
||||||||||||||||||
Fractional shares cancelled
|
(18
|
)
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||
Net income for the period
|
—
|
—
|
2,833,843
|
—
|
2,833,843
|
|||||||||||||||||||
Balance, March 31, 2014
|
48,365,012
|
483,650
|
688,881,939
|
2,833,843
|
—
|
692,199,432
|
Cash flows from operating activities:
|
|
|||
Net income
|
2,833,843
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||
Depreciation and amortization
|
6,620,372
|
|||
Amortization of financing costs
|
800,806
|
|||
Unrealized gain on derivatives
|
(2,623,456
|
)
|
||
Unrealized exchange differences on cash and cash equivalents
|
(8,004
|
)
|
||
Changes in operating assets and liabilities
|
||||
Trade receivables
|
(1,966,746
|
)
|
||
Prepaid expenses and other receivables
|
(343,047
|
)
|
||
Due from related parties
|
(1,639,497
|
)
|
||
Inventories
|
396,776
|
|||
Trade accounts payable
|
1,799,616
|
|||
Accrued expenses and deferred income
|
2,043,523
|
|||
Due to related parties
|
(292,687
|
)
|
||
Payments for drydocking costs
|
(385,077
|
)
|
||
Net cash from operating activities
|
7,236,422
|
|||
Cash flows from investing activities:
|
||||
Payments for vessels and vessels under construction
|
(172,237,529
|
)
|
||
Net payments to acquire Predecessor Businesses
|
(13,732,896
|
)
|
||
Payments to acquire other fixed assets
|
(15,597
|
)
|
||
Increase in restricted cash
|
(35,448,702
|
)
|
||
Net cash used in investing activities
|
(221,434,724
|
)
|
||
Cash flows from financing activities:
|
||||
Repayment of long‑term debt
|
(6,506,000
|
)
|
||
Financing costs paid
|
(1,516,847
|
)
|
||
Cash proceeds from common shares issuances
|
510,496,990
|
|||
Payments relating to issuance costs
|
(9,152,050
|
)
|
||
Net cash from financing activities
|
493,322,093
|
|||
Effects of exchange rates on cash and cash equivalents
|
8,004
|
|||
Net increase in cash and cash equivalents
|
279,131,795
|
|||
Cash and cash equivalents at the beginning of the period
|
—
|
|||
Cash and cash equivalents at the end of the period
|
279,131,795
|
|||
Supplemental disclosure of cash flow information
|
||||
Cash paid during the period for interest
|
1,242,500
|
|||
Non cash consideration of shares issued to acquire Predecessor businesses and acquisitions of assets
|
187,495,680
|
1. | Basis of Presentation and General Information |
• | DLPG completed a private placement of 9,310,054 shares of its common stock with institutional investors and other investors in Norway ("NPP"). The shares were issued at NOK 75.00 per share, equivalent to USD 12.66 per share and realized gross proceeds of $117.9 million based on the exchange rate on July 29, 2013. |
• | DLPG acquired from Dorian Holdings the following in exchange for 4,667,135 shares of its common stock and $9.7 million in cash: |
(a) | 100% interest in three ship owning entities, CNML LPG Transport LLC ("CNML"), CJNP LPG Transport LLC ("CJNP") and CMNL LPG Transport LLC ("CMNL"), which each owned a Very Large Gas Carrier ("VLGC") (the Captain Nicholas ML , the Captain John NP and the Captain Markos NL respectively), the related bank debt, interest rate swaps, and the inventory on board each vessel. The Captain Nicholas ML , Captain John NP and Captain Markos NL were previously owned by Cepheus Transport Ltd, Lyra Gas Transport Ltd and Cetus Transport Ltd., all owned by principals of Dorian Holdings until July 29, 2013 on which date they were sold to CNML, CJNP and CMNL, respectively. The sale of the vessels required approval from the bank that had provided the related financing that was assumed by the Company in connection with the transaction and resulted in a modification of the financing terms in connection with the acquisition. A further description of the loan arrangements is provided in Note 11. |
(b) | 100% interest in two entities, each a party to a contract for the construction of one VLGC, option rights to construct an additional 1.5 VLGCs and $2.67 million in cash. |
• | DLPG issued 4,667,135 shares of its common stock to SEACOR Holdings Inc., through its subsidiary, SeaDor Holdings LLC ("SeaDor") as consideration for the following: |
(a) | 100% interest in a subsidiary company, SEACOR LPGI LLC, a party to a contract for the construction of one VLGC |
(b) | $49.9 million in cash and |
(c) | the assignment to DLPG of option rights to purchase 1.5 VLGC vessels. |
Subsidiary
|
Acquisition
Date |
Type of
vessel(2) |
Vessel's name
|
Built
|
CBM(1)
|
CNML LPG Transport LLC
|
July 29, 2013
|
VLGC
|
Captain Nicholas ML
|
2008
|
82,000
|
CJNP LPG Transport LLC
|
July 29, 2013
|
VLGC
|
Captain John NP
|
2007
|
82,000
|
CMNL LPG Transport LLC
|
July 29, 2013
|
VLGC
|
Captain Markos NL
|
2006
|
82,000
|
Grendon Tanker LLC
|
July 29, 2013
|
PGC
|
LPG Grendon
|
1996
|
5,000
|
Subsidiary
|
(
Vessel's Name
)
|
Acquisition
Date |
Type of
vessel(2) |
Hull
number |
Estimated
vessel delivery date |
CBM(1)
|
SeaCor LPG I LLC (
Comet
)
|
July 29, 2013
|
VLGC
|
2656
|
July 2014
|
84,000
|
|
SeaCor LPG II LLC (
Corsair
)
|
July 29, 2013
|
VLGC
|
2657
|
September 2014
|
84,000
|
|
Corvette LPG Transport LLC
|
July 29, 2013
|
VLGC
|
2658
|
December 2014
|
84,000
|
|
Dorian Shanghai LPG Transport LLC (
Cougar
)
|
November 26, 2013
|
VLGC
|
S749
|
April 2015
|
84,000
|
|
Dorian Houston LPG Transport LLC (
Cobra
)
|
November 26, 2013
|
VLGC
|
S750
|
April 2015
|
84,000
|
|
Dorian Sao Paulo LPG Transport LLC (
Continental
)
|
November 26, 2013
|
VLGC
|
S753
|
June 2015
|
84,000
|
|
Dorian Ulsan LPG Transport LLC (
Constitution
)
|
November 26, 2013
|
VLGC
|
S755
|
June 2015
|
84,000
|
|
Concorde LPG Transport LLC
|
February 12, 2014
|
VLGC
|
2660
|
June 2015
|
84,000
|
|
Dorian Amsterdam LPG Transport LLC (
Commodore
)
|
November 26, 2013
|
VLGC
|
S751
|
July 2015
|
84,000
|
|
Dorian Dubai LPG Transport LLC (
Cresques
)
|
November 26, 2013
|
VLGC
|
2336
|
August 2015
|
84,000
|
|
Dorian Monaco LPG Transport LLC (
Cheyenne
)
|
November 26, 2013
|
VLGC
|
S756
|
September 2015
|
84,000
|
|
Constellation LPG Transport LLC
|
February 12, 2014
|
VLGC
|
2661
|
September 2015
|
84,000
|
|
Dorian Geneva LPG Transport LLC (
Cratis
)
|
November 26, 2013
|
VLGC
|
2337
|
October 2015
|
84,000
|
|
Dorian Barcelona LPG Transport LLC (
Clermont
)
|
November 26, 2013
|
VLGC
|
S752
|
September 2015
|
84,000
|
|
Dorian Cape Town LPG Transport LLC (
Chaparral
)
|
November 26, 2013
|
VLGC
|
S754
|
October 2015
|
84,000
|
|
Dorian Tokyo LPG Transport LLC (
Copernicus
)
|
November 26, 2013
|
VLGC
|
2338
|
November 2015
|
84,000
|
|
Commander LPG Transport LLC
|
February 12, 2014
|
VLGC
|
2662
|
November 2015
|
84,000
|
|
Dorian Explorer LPG Transport LLC (
Challenge
r)
|
November 26, 2013
|
VLGC
|
S757
|
December 2015
|
84,000
|
|
Dorian Exporter LPG Transport LLC (
Caravel
)
|
November 26, 2013
|
VLGC
|
S758
|
January 2016
|
84,000
|
|
|
|
|
|
|
|
|
Dormant Subsidiaries
|
|
|
|
|
|
|
Subsidiary
|
|
Incorporation
Date |
|
|
|
|
Capricorn LPG Transport LLC
|
November 15, 2013
|
|
|
|
|
|
Comet LPG Transport LLC
|
November 11, 2013
|
|
|
|
|
|
Constitution LPG Transport LLC
|
February 17, 2014
|
|
|
|
|
|
Corsair LPG Transport LLC
|
June 24, 2013
|
|||||
Dorian LPG Management Corp | July 2, 2013 | |||||
Dorian LPG (USA) Ltd (incoporated in USA) | July 2, 2013 | |||||
Dorian LPG (UK) Ltd (incorporated in UK) | November 18, 2013 | |||||
(1) | CBM: Cubic meters, a standard measure for LPG tanker capacity. |
(2) | Very Large Gas Carrier ("VLGC"), Pressurized Gas Carrier ("PGC") |
Charterer
|
% of revenue
|
|||
Statoil ASA
|
51
|
|||
Naftomar Shipping and Trading Co. Ltd
|
13
|
|||
Kuwait Petroleum Corporation
|
10
|
2. | Significant Accounting Policies |
(a) | Principles of consolidation: The consolidated financial statements incorporate the financial statements of the Company and its wholly‑owned subsidiaries. Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statements of income from the effective date of acquisition and up to the effective date of disposal, as appropriate. All intercompany balances and transactions have been eliminated. |
(b) | Use of estimates: The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
(c) | Other comprehensive income/(loss): The Company follows the accounting guidance relating to Comprehensive Income, which requires separate presentation of certain transactions that are recorded directly as components of stockholders' equity. The Company has no other comprehensive income/(loss) and accordingly, comprehensive income/(loss) equals net income/(loss) for the period presented and thus has not presented this in the statement of operations or in a separate statement. |
(d) | Foreign currency translation: The functional currency of the Company is the U.S. Dollar. Foreign currency transactions are measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. As of balance sheet date, monetary assets and liabilities that are denominated in a currency other than the functional currency are adjusted to reflect the exchange rate at the balance sheet date and any gains or losses are included in the statement of operations. For the period presented, the Company had no foreign currency derivative instruments. |
(e) | Cash and cash equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents. |
(f) | Restricted cash: Restricted cash represents pledged cash deposits or minimum liquidity to be maintained with certain banks under the Company's borrowing arrangements. In the event that the obligation relating to such deposits is expected to be terminated within the next twelve months or relates to general minimum liquidity requirements with no obligation to retain such funds in retention accounts, these deposits are classified as current assets otherwise they are classified as non‑current assets. |
(g) | Trade receivables (net): Trade receivables (net), reflect receivables from vessel charters, net of an allowance for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. Provision for doubtful accounts for the period presented was zero. |
(h) | Inventories: Inventories consist of bunkers on board the vessels when vessels are unemployed or are operating under voyage charters and lubricants and stores on board the vessels. Inventories are stated at the lower of cost or market. Cost is determined by the first in, first out method. |
(i) | Vessels: Vessels are stated at cost, less accumulated depreciation. The costs of the vessels acquired as part of a business acquisition are recorded at their fair value on the date of acquisition. The cost of vessels purchased consists of the contract price, less discounts, plus any direct expenses incurred upon acquisition, including improvements, commission paid, delivery expenses and other expenditures to prepare the vessel for her initial voyage. The initial purchase of LPG coolant for the refrigeration of cargo is also capitalized. Interest costs incurred to finance the cost of vessels during their construction period are capitalized. Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Repairs and maintenance are expensed as incurred. |
(j) | Impairment of long‑lived assets: The Company reviews their vessels "held and used" for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of future undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, the asset is evaluated for an impairment loss. Measurement of the impairment loss is based on the fair value of the asset. |
(k) | Vessel depreciation: Depreciation is computed using the straight‑line method over the estimated useful life of the vessels, after considering the estimated salvage value. Each vessel's salvage value is equal to the product of its lightweight tonnage and estimated scrap rate. Management estimates the useful life of its vessels to be 25 years from the date of initial delivery from the shipyard. Second hand vessels are depreciated from the date of their acquisition through their remaining estimated useful life. |
(l) | Drydocking and special survey costs: Drydocking and special survey costs are accounted under the deferral method whereby the actual costs incurred are deferred and are amortized on a straight‑line basis over the period through the date the next survey is scheduled to become due. We are required to drydock each of our vessels every five years until it reaches 15 years of age, after which we are required to drydock the applicable vessel every two and one‑half years. Costs deferred are limited to actual costs incurred at the yard and parts used in the drydocking or special survey. Costs deferred include expenditures incurred relating to shipyard costs, hull preparation and painting, inspection of hull structure and mechanical components, steelworks, machinery works, and electrical works. If a survey is performed prior to the scheduled date, the remaining unamortized balances are immediately written off. Unamortized balances of vessels that are sold are written‑off and included in the calculation of the resulting gain or loss in the period of the vessel's sale. The amortization charge is presented within Depreciation and amortization in the consolidated statement of operations. |
(m) | Financing costs: Financing fees incurred for obtaining new loans and credit facilities are deferred and amortized to interest expense over the respective term of the loan or credit facility using the effective interest rate method. Any unamortized balance of costs relating to loans repaid or refinanced is expensed in the period the repayment or refinancing is made, subject to the accounting guidance regarding Debt—Modifications and Extinguishments. Any unamortized balance of costs related to credit facilities repaid is expensed in the period. Any unamortized balance of costs relating to credit facilities refinanced are deferred and amortized over the term of the respective credit facility in the period the refinancing occurs, subject to the provisions of the accounting guidance relating to Debt—Modifications and Extinguishments. The unamortized financing costs are reflected in Deferred charges in the accompanying consolidated balance sheet. |
(n) | Revenues and expenses: Revenue is recognized when an agreement exists, the vessel is made available to the charterer or services are provided, the charter hire is determinable and collection of the related revenue is reasonably assured. |
(o) | Repairs and maintenance: All repair and maintenance expenses, including underwater inspection costs are expensed in the period incurred. Such costs are included in Vessel operating expenses. |
(p) | Segment reporting: Each of the Company's vessels serve the same type of customer, have similar operations and maintenance requirements, operate in the same regulatory environment, and are subject to similar economic characteristics. Based on this, the Company has determined that it operates in one reportable segment, the international transportation of liquid petroleum gas with its fleet of vessels. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographic information is impracticable. |
(q) | Derivative Instruments: The Company enters into interest rate swap agreements to manage its exposure to fluctuations of interest rate risk associated with its borrowings. All derivatives are recognized in the consolidated financial statements at their fair value, as either a derivative asset or a liability. The fair value of the interest rate derivatives is based on a discounted cash flow analysis. When such derivatives do not qualify for hedge accounting, the Company recognizes their fair value changes in current period earnings. When the derivatives do qualify for hedge accounting, depending upon the nature of the hedge, changes in fair value of the derivatives are either offset against the fair value of assets, liabilities or firm commitments through income, or recognized in other comprehensive income/(loss) (effective portion) until the hedged item is recognized in the consolidated statements of income. For the periods presented, no derivatives were accounted for as accounting hedges. |
(r) | Fair value of financial instruments: In accordance with the requirements of accounting guidance relating to Fair Value Measurements, the Company classifies and discloses its assets and liabilities carried at fair value in one of the following three categories: |
Level 1:
|
Quoted market prices in active markets for identical assets or liabilities.
|
Level 2:
|
Observable market based inputs or unobservable inputs that are corroborated by market data.
|
Level 3:
|
Unobservable inputs that are not corroborated by market data.
|
(s) | Recent accounting pronouncements: On May 28, 2014, the FASB issued ASU 2014-09, Revenue From Contracts With Customers, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This standard is effective for public entities with reporting periods beginning after December 15, 2016. Early adoption is not permitted. The Company has not yet evaluated the impact, if any, of the adoption of this new standard. |
3. | Transactions with Related Parties |
(a) | Dorian Holdings: Dorian LPG Ltd. was formed by Dorian Holdings on July 1, 2013, to acquire and operate LPG tankers and initially to acquire the LPG tankers held by affiliates of Dorian Holdings. The acquisitions of the vessels from affiliates of Dorian Holdings were treated as a business acquisition, refer Notes 1 and 4. In addition on July 29, 2013, we entered into a license agreement with Dorian Holdings pursuant to which Dorian Holdings has granted us a non‑transferable, non‑exclusive, perpetual (subject to termination for material breach or a change of control event), world‑wide, royalty‑free right and license to use the Dorian logo and "Dorian LPG" in connection with our LPG business. |
(b) | SEACOR Holdings Inc. ("SEACOR"): On April 29, 2013, affiliates of the Company entered into a series of agreements with subsidiaries of SEACOR under which the affiliates of the Company granted certain rights to SEACOR to purchase newbuilding contracts for VLGCs and associated options. The affiliates of the Company had the right to repurchase a portion of those contracts and the associated options. As part of these agreements, subsidiaries of SEACOR paid the first installment under the newbuilding contracts to the shipyard, which, under the terms of the agreements, could be partially acquired by Dorian affiliates for the amount of the installments paid, certain agreed third party expenses, and a capital charge of 6% per annum. |
Cash
|
49,854,870
|
|||
Purchase contract for one VLGC newbuilding contract (includes advance payment)
|
7,009,675
|
|||
Purchase option contracts
|
2,529,126
|
|||
|
59,393,671
|
(c) | Scorpio Tankers Inc. ("Scorpio"): On November 26, 2013, the Company issued 7,990,425 shares of its common stock to Scorpio as consideration for 100% interest in thirteen subsidiary companies, (each a party to a contract for the construction of one VLGC) and $1.9 million in cash. This transaction was accounted for as an asset acquisition. |
Cash
|
1,930,000
|
|||
Purchase contract for thirteen VLGC newbuilding contracts
(includes advance payments)
|
119,386,040
|
|||
|
121,316,040
|
(d) | Dorian (Hellas) S.A.: |
(e) | Eagle Ocean Transport Inc.: As part of the series of agreements with SEACOR, Eagle Ocean Transport, a company 100% owned by Mr. John Hadjipateras, is entitled to retain 100% of any portion of the shipbroker fee rebated to it as compensation for its services in securing the newbuilding contracts. To the extent that any fees are received in respect of option vessels under such agreements, the fees shall be shared evenly between SEACOR and Eagle Ocean Transport. For the period from July 1, 2013 to March 31, 2014 Eagle Ocean Transport received $457,940 of shipbroker rebates for its services in securing the newbuilding contracts. In addition, Eagle Ocean Transport was reimbursed for an amount of $293,869, representing costs incurred on behalf of the Company relating to equity issuances and debt restructuring for the period July 1, 2013 to March 31, 2014. |
4. | Acquisition of Business |
|
Acquisition
from Dorian Holdings |
Grendon
acquisition |
Total
|
|||||||||
Cash
|
9,732,911
|
6,672,485
|
16,405,396
|
|||||||||
Equity instruments (4,667,135 common shares of the
Company at NOK 75.00 per share)
|
59,092,499
|
—
|
59,092,499
|
|||||||||
Total consideration
|
68,825,410
|
6,672,485
|
75,497,895
|
|||||||||
Fair value of identifiable assets and liabilities acquired:
|
||||||||||||
Cash
|
2,672,500
|
—
|
2,672,500
|
|||||||||
Vessels
|
194,457,529
|
6,625,000
|
201,082,529
|
|||||||||
Inventories on board the vessels
|
1,407,622
|
47,485
|
1,455,107
|
|||||||||
Newbuilding vessels contracted for construction
|
17,593,130
|
—
|
17,593,130
|
|||||||||
Other assets—Vessel purchase options
|
4,605,000
|
—
|
4,605,000
|
|||||||||
Long term bank debt
|
(135,224,500
|
)
|
—
|
(135,224,500
|
)
|
|||||||
Interest rate swaps
|
(16,685,871
|
)
|
—
|
(16,685,871
|
)
|
|||||||
Net assets acquired—fair value
|
68,825,410
|
6,672,485
|
75,497,895
|
$ in 000's
|
For the year ended
March 31, 2014 |
For the year ended
March 31, 2013 |
||||||
Net revenues
|
$
|
45,017
|
$
|
38,662
|
||||
Net income/ (loss)
|
$
|
6,613
|
$
|
(6,639
|
)
|
5. | Inventories |
|
March 31, 2014
|
|||
Bunkers
|
596,768
|
|||
Lubricants
|
358,381
|
|||
Victualing
|
83,840
|
|||
Bonded stores
|
15,354
|
|||
Communication cards
|
3,986
|
|||
Total
|
1,058,329
|
6. | Vessels, Net |
|
Vessel cost
|
Accumulated
depreciation |
Net book Value
|
|||||||||
Balance, July 1, 2013
|
—
|
—
|
—
|
|||||||||
Vessel acquisitions through business combinations (Refer Note 4)
|
201,082,529
|
—
|
201,082,529
|
|||||||||
Other
|
307,606
|
—
|
307,606
|
|||||||||
Depreciation
|
—
|
(6,555,269
|
)
|
(6,555,269
|
)
|
|||||||
Balance, March 31, 2014
|
201,390,135
|
(6,555,269
|
)
|
194,834,866
|
7. | Vessels Under Construction |
8. | Other Fixed Assets, Net |
9. | Deferred Charges, Net |
|
Financing
costs |
Drydocking
costs |
||||||
On inception , July 1, 2013
|
—
|
—
|
||||||
Additions
|
1,516,847
|
600,394
|
||||||
Amortization
|
(800,807
|
)
|
(65,103
|
)
|
||||
Balance, March 31, 2014
|
716,040
|
535,291
|
10. | Accrued Expenses |
|
March 31,
2014 |
|||
Accrued loan and swap interest
|
1,439,237
|
|||
Accrued IPO charges
|
469,707
|
|||
Accrued voyage and vessel operating expenses
|
87,029
|
|||
Other
|
200,413
|
|||
Total
|
2,196,386
|
11. | Long‑Term Debt |
Secured bank debt
|
|
|||
Royal Bank of Scotland plc. (RBS)
|
|
|||
Tranche A
|
44,200,000
|
|||
Tranche B
|
33,241,000
|
|||
Tranche C
|
51,277,500
|
|||
Total
|
128,718,500
|
|||
Presented as follows:
|
||||
Current portion of long‑term debt
|
9,612,000
|
|||
Long‑term debt—net of current portion
|
119,106,500
|
|||
Total
|
128,718,500
|
Year ending March 31,:
|
|
|||
2015
|
9,612,000
|
|||
2016
|
9,612,000
|
|||
2017
|
9,612,000
|
|||
2018
|
9,612,000
|
|||
2019
|
57,268,000
|
|||
Thereafter
|
33,002,500
|
|||
Total
|
128,718,500
|
• | The ratio of cash flow from operations before interest and finance costs to cash debt service costs (Debt Service Coverage Ratio) shall not be less than 0.75:1 through December 31, 2013, 0.8:1 through December 31, 2014; and 1:1 at all times thereafter. |
• | The Minimum Shareholders' Funds as adjusted for any reduction in the vessel fair market value shall not be less than $85 million; |
• | The ratio of Total Debt to Shareholders Funds shall not exceed 150% at all times; |
• | Minimum cash of $10 million at the end of each quarter and $1.5 million per mortgaged vessel at all times. |
12. | Capital Structure |
• | 9,310,054 common shares on completion of its NPP, at NOK75.00 per share, equivalent to USD12.66 per share based on the exchange rate on July 29, 2013 |
• | 4,667,135 common shares to Dorian Holdings (refer Note 4) |
• | 4,667,135 common shares to SeaDor Holdings LLC (refer Note 3) |
• | 16,081,081 common shares on completion of a second Private Placement in Norway ("NPP2"), at NOK92.50 per share, equivalent to USD15.16 per share based on the exchange rate on November 26, 2013 |
• | 7,990,425 common shares to Scorpio Tankers Inc. (refer Note 3) |
• | 5,649,200 common shares on completion of a third Private Placement in Norway ("NPP3"), at NOK110.00 per share, equivalent to USD17.92 per share based on the exchange rate on February 12, 2014 |
13. | Revenues |
Time charter revenue
|
17,602,137
|
|||
Voyage charter revenue
|
11,210,785
|
|||
Other revenue
|
820,778
|
|||
Total
|
29,633,700
|
14. | Voyage Expenses |
Bunkers
|
5,271,126
|
|||
Port charges and other related expenses
|
552,634
|
|||
Brokers' commissions
|
386,244
|
|||
Security cost
|
298,820
|
|||
War risk insurances
|
37,001
|
|||
Other voyage expenses
|
125,146
|
|||
Total voyage expenses
|
6,670,971
|
15. | Vessel Operating Expenses |
Crew wages and related costs
|
5,306,441
|
|||
Spares and stores
|
1,395,287
|
|||
Lubricants
|
480,279
|
|||
Insurance
|
566,021
|
|||
Repairs and maintenance costs
|
502,424
|
|||
Miscellaneous expenses
|
144,507
|
|||
Total
|
8,394,959
|
16. | Interest and Finance Costs |
17. | Income Taxes |
18. | Commitments and Contingencies |
Period ending March 31,:
|
|
|||
2015
|
327,577,240
|
|||
2016
|
829,551,691
|
|||
Total
|
1,157,128,931
|
19. | Derivative Instruments |
Subsidiary
|
Termination Date
|
Fixed
interest rate |
Nominal value
March 31, 2014 |
||||||
CMNL(1)
|
Nov 2018
|
5.395
|
%
|
20,456,000
|
|||||
CMNL(1)
|
Nov 2018
|
4.936
|
%
|
12,785,000
|
|||||
CJNP(2)
|
March 2019
|
4.772
|
%
|
33,067,125
|
|||||
CJNP(2)
|
March 2019
|
2.960
|
%
|
11,132,875
|
|||||
CNML(3)
|
July 2020
|
4.350
|
%
|
49,880,000
|
|||||
|
|
127,321,000
|
(1) | reduces semi‑annually by $1,278,500 with a final settlement of $21,734,500 due in November 2018. |
(2) | reduces semi‑annually by $1,700,000 with a final settlement of $28,900,000 due in March 2019. |
(3) | RBS exercised its right to extend the interest rate swap until July 2020 and based on the extension reduces semi-annually by $1,720,000 with a final settlement of $27,520,000 due in July 2020. |
|
|
March 31, 2014
|
|||||||
Derivatives not designated as hedging instruments
|
Balance sheet Location
|
Asset
derivatives |
Liability
derivatives |
||||||
Interest rate swap agreements
|
Long-term liabilities—Derivatives instruments
|
—
|
14,062,416
|
Derivatives not designated as hedging instruments
|
Location of gain/(loss) recognized
|
July 1, 2013 to
March 31, 2014 |
|||
Interest Rate Swap—Change in fair value
|
Loss on derivatives—net
|
2,623,456
|
|||
Interest Rate Swap—Realized loss
|
Loss on derivatives—net
|
(3,727,457
|
)
|
||
Loss on derivatives—net
|
|
(1,104,001
|
)
|
20. | Financial Instruments |
21. | Earnings Per Share |
22. | Subsequent Events |
|
Note
|
March 31, 2013
|
||||||
Assets
|
|
|
||||||
Current assets
|
|
|
||||||
Cash and cash equivalents
|
|
1,041,644
|
||||||
Trade receivables, net
|
|
1,036,187
|
||||||
Prepaid expenses and other receivables
|
|
64,576
|
||||||
Due from related parties
|
3
|
2,198,820
|
||||||
Inventories
|
4
|
1,708,241
|
||||||
Accrued revenue
|
108,551
|
|||||||
Total current assets
|
6,158,019
|
|||||||
Fixed assets
|
||||||||
Vessels, net
|
5
|
187,077,722
|
||||||
Total fixed assets
|
187,077,722
|
|||||||
Other non‑current assets
|
||||||||
Deferred charges, net
|
6
|
1,211,863
|
||||||
Accrued revenue
|
—
|
|||||||
Total assets
|
194,447,604
|
|||||||
Liabilities and owners' equity
Current liabilities
|
||||||||
Trade accounts payable
|
3,314,624
|
|||||||
Accrued expenses
|
7
|
1,418,585
|
||||||
Due to related parties
|
3
|
14,115,179
|
||||||
Deferred income
|
641,048
|
|||||||
Current portion of long‑term debt
|
8
|
12,112,000
|
||||||
Total current liabilities
|
31,601,436
|
|||||||
Long‑term liabilities
|
||||||||
Long‑term debt—net of current portion
|
8
|
128,718,500
|
||||||
Derivative instruments
|
16
|
21,369,878
|
||||||
Total long‑term liabilities
|
150,088,378
|
|||||||
Total liabilities
|
181,689,814
|
|||||||
Owners' equity
|
||||||||
Owners' capital
|
9
|
73,880,910
|
||||||
Accumulated deficit
|
(61,123,120
|
)
|
||||||
Total owners' equity
|
12,757,790
|
|||||||
Total liabilities and owners' equity
|
194,447,604
|
|
|
April 1,
2013 to |
Year ended March 31,
|
|||||||||||||
|
Note
|
July 28, 2013
|
2013
|
2012
|
||||||||||||
Revenues
|
10
|
15,383,116
|
38,661,846
|
34,571,042
|
||||||||||||
Expenses
|
||||||||||||||||
Voyage expenses
|
11
|
3,623,872
|
8,751,257
|
2,075,698
|
||||||||||||
Voyage expenses—related party
|
3,11
|
198,360
|
505,926
|
448,683
|
||||||||||||
Vessel operating expenses
|
12
|
4,638,725
|
12,038,926
|
14,410,349
|
||||||||||||
Management fees—related party
|
3
|
601,202
|
1,824,000
|
1,824,000
|
||||||||||||
Depreciation and amortization
|
5,6
|
3,955,309
|
12,024,829
|
11,847,628
|
||||||||||||
General and administrative expenses
|
28,204
|
157,039
|
80,552
|
|||||||||||||
Total expenses
|
13,045,672
|
35,301,977
|
30,686,910
|
|||||||||||||
Operating income
|
2,337,444
|
3,359,869
|
3,884,132
|
|||||||||||||
Other income/(expenses)
|
||||||||||||||||
Interest and finance cost
|
13
|
(762,815
|
)
|
(2,568,985
|
)
|
(2,415,855
|
)
|
|||||||||
Interest income
|
98
|
598
|
504
|
|||||||||||||
Gain/(Loss) on derivatives—net
|
16
|
2,830,205
|
(5,588,479
|
)
|
(10,943,316
|
)
|
||||||||||
Foreign currency (loss)/gain, net
|
(5
|
)
|
(53,700
|
)
|
2,215
|
|||||||||||
Total other income/(expenses), net
|
2,067,483
|
(8,210,566
|
)
|
(13,356,452
|
)
|
|||||||||||
Net income/(loss)
|
4,404,927
|
(4,850,697
|
)
|
(9,472,320
|
)
|
|
Owners'
capital |
Accumulated
deficit |
Total
|
||||||||||
Balance, April 1, 2011
|
73,880,910
|
(46,800,103
|
)
|
27,080,807
|
|||||||||
Net loss for the year
|
—
|
(9,472,320
|
)
|
(9,472,320
|
)
|
||||||||
Balance, March 31, 2012
|
73,880,910
|
(56,272,423
|
)
|
17,608,487
|
|||||||||
Net loss for the year
|
—
|
(4,850,697
|
)
|
(4,850,697
|
)
|
||||||||
Balance, March 31, 2013
|
73,880,910
|
(61,123,120
|
)
|
12,757,790
|
|||||||||
Net income for the period
|
—
|
4,404,927
|
4,404,927
|
||||||||||
Balance, July 28, 2013
|
73,880,910
|
(56,718,193
|
)
|
17,162,717
|
|
April 1,
2013 to |
Year ended March 31,
|
||||||||||
|
July 28, 2013
|
2013
|
2012
|
|||||||||
Cash flows from operating activities:
|
|
|
|
|||||||||
Net income/(loss)
|
4,404,927
|
(4,850,697
|
)
|
(9,472,320
|
)
|
|||||||
Adjustments to reconcile net income/
(loss) to net cash provided by operating activities: |
||||||||||||
Depreciation and amortization
|
3,955,309
|
12,024,829
|
11,847,628
|
|||||||||
Amortization of financing costs
|
15,437
|
48,307
|
50,286
|
|||||||||
Unrealized gain/(loss) on derivatives
|
(4,684,006
|
)
|
13,681
|
4,607,769
|
||||||||
Changes in assets and liabilities:
|
||||||||||||
Trade receivables
|
(3,431,789
|
)
|
(735,261
|
)
|
(58,795
|
)
|
||||||
Prepaid expenses and other receivables
|
8,646
|
487,966
|
(770,805
|
)
|
||||||||
Due from related parties
|
853,214
|
(2,198,820
|
)
|
1,035,053
|
||||||||
Inventories
|
415,631
|
(660,068
|
)
|
(317,947
|
)
|
|||||||
Trade accounts payable
|
759,262
|
153,322
|
2,375,081
|
|||||||||
Accrued expenses and other liabilities
|
(336,312
|
)
|
(384,265
|
)
|
(473,196
|
)
|
||||||
Due to related parties
|
2,710,151
|
4,755,938
|
2,585,806
|
|||||||||
Payment for drydocking costs
|
—
|
(399,149
|
)
|
(1,078,883
|
)
|
|||||||
Net cash from operating activities
|
4,670,470
|
8,255,783
|
10,329,677
|
|||||||||
Cash flows from investing activities:
|
||||||||||||
Payments for vessel improvements
|
(90,492
|
)
|
(469,929
|
)
|
(309,717
|
)
|
||||||
Net cash used in investing activities
|
(90,492
|
)
|
(469,929
|
)
|
(309,717
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Repayment of long‑term debt
|
(5,606,000
|
)
|
(8,784,500
|
)
|
(10,397,000
|
)
|
||||||
Net cash used in financing activities
|
(5,606,000
|
)
|
(8,784,500
|
)
|
(10,397,000
|
)
|
||||||
Net (decrease)/increase in cash and cash equivalents
|
(1,026,022
|
)
|
(998,646
|
)
|
(377,040
|
)
|
||||||
Cash and cash equivalents at the
beginning of the period
|
1,041,644
|
2,040,290
|
2,417,330
|
|||||||||
Cash and cash equivalents at the end of the period
|
15,622
|
1,041,644
|
2,040,290
|
|||||||||
Supplemental disclosure of cash flow information
|
||||||||||||
Cash paid during the period for interest
|
1,002,958
|
2,472,386
|
2,196,621
|
1.
|
Basis of Presentation and General Information
|
Vessel owning Company
|
Date of
incorporation |
Type of
vessel(3) |
Vessel's name
|
Built
|
CBM(2)
|
|||
Cepheus Transport Ltd. (Cepheus)
(1)
|
March 17, 2004
|
VLGC
|
Captain Nicholas ML
|
2008
|
82,000
|
|||
Lyra Gas Transport Ltd (Lyra)
(1)
|
January 30, 2005
|
VLGC
|
Captain John NP
|
2007
|
82,000
|
|||
Cetus Transport Ltd. (Cetus)
(1)
|
January 27, 2004
|
VLGC
|
Captain Markos NL
|
2006
|
82,000
|
Orion Tankers Limited (Orion)
(1)
|
October 26, 2005
|
PGC
|
Grendon
|
1996
|
5,000
|
(1) | Incorporated in Republic of Liberia. |
(2) | CBM: Cubic meters, a standard measure for LPG tanker capacity. |
(3) | Very Large Gas Carrier ("VLGC"), Pressurized Gas Carrier ("PGC") |
|
% of total revenues
|
|||||||||||
|
April 1, 2013
|
Year ended March 31,
|
||||||||||
Charterer
|
to
July 28, 2013
|
2013
|
2012
|
|||||||||
Statoil Hydro ASA
|
49
|
53
|
89
|
|||||||||
Petredec Ltd.
|
18
|
19
|
10
|
|||||||||
E1Corp.
|
19
|
17
|
—
|
|||||||||
Astomos Energy Corporation
|
12
|
—
|
—
|
2. | Significant Accounting Policies |
(a) | Principles of combination: The accompanying combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and include the accounts and operating results of the legal entities comprising the Owning Companies as discussed in Note 1, which were all under common management. The combined statements represent an aggregation of the U.S. GAAP financial information of the entities comprising the Owning Companies. All intercompany balances and transactions have been eliminated upon combination. |
(b) | Use of estimates: The preparation of the Predecessor combined financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
(c) | Other comprehensive income/(loss): The Company follows the accounting guidance relating to Comprehensive Income , which requires separate presentation of certain transactions that are recorded directly as components of stockholders' equity. The Company has no other comprehensive income/(loss) and accordingly, comprehensive income/(loss) equals net income/(loss) for the periods presented. |
(d) | Foreign currency translation: The functional currency of the Company is the U.S. Dollar. Each foreign currency transaction is measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. As of the balance sheet date, monetary assets and liabilities that are denominated in a currency other than the functional currency are adjusted to reflect the exchange rate at the balance sheet date and any gains or losses are included in the combined statement of operations. |
(e) | Cash and cash equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents. |
(f) | Trade receivables (net): Trade receivables (net), reflect receivables from vessel charters, net of an allowance for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. No allowance for doubtful accounts was recorded for the periods presented. |
(g) | Inventories: Inventories consist of bunkers on board the vessels when vessels are unemployed or are operating under voyage charters and lubricants and stores on board the vessels. Inventories are stated at the lower of cost or market. Cost is determined by the first in, first out method. |
(h) | Vessels: Vessels are stated at cost, less accumulated depreciation. The cost of the vessels consists of the contract price, less discounts, plus any direct expenses incurred upon acquisition, including improvements, commission paid, delivery expenses and other expenditures to prepare the vessel for her initial voyage. The cost of vessels constructed includes financing costs incurred during the construction period. Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Repairs and maintenance are expensed as incurred. |
(i) | Impairment of long‑lived assets: The Company reviews their vessels "held and used" for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of future undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, the asset is evaluated for an impairment loss. Measurement of the impairment loss is based on the fair value of the asset. In this respect, management regularly reviews the carrying amount of the vessels in connection with the estimated recoverable amount for each of the Company's vessels. |
(j) | Vessel depreciation: Depreciation is computed using the straight‑line method over the estimated useful life of the vessels, after considering the estimated salvage value. Each vessel's salvage value is equal to the product of its lightweight tonnage and estimated scrap rate, which is estimated to be $ 400 per lightweight ton. Management of the Owning Companies estimates the useful life of its vessels to be 20 years from the date of initial delivery from the shipyard for VLGC's and 25 years for PGC vessels. Secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful life. |
(k) | Drydocking and special survey costs: Drydocking and special survey costs are accounted under deferral method whereby actual costs incurred are deferred and are amortized on a straight‑line basis over the period through the date the next survey is scheduled to become due. We are required to drydock a vessel once every five years until it reaches 15 years of age, after which we are required to drydock the applicable vessel every two and one‑half years. Costs deferred are limited to actual costs incurred at the yard and parts used in the drydocking or special survey. Costs deferred include expenditures incurred relating to shipyard costs, hull preparation and painting, inspection of hull structure and mechanical components, steelworks, machinery works, and electrical works. If a survey is performed prior to the scheduled date, the remaining unamortized balances are immediately written off. Unamortized balances of vessels that are sold are written‑off and included in the calculation of the resulting gain or loss in the period of the vessel's sale. The amortization charge is presented within "Depreciation and amortization" in the combined statements of operations. |
(l) | Financing costs: Financing fees incurred for obtaining new loans and credit facilities are deferred and amortized to interest expense over the respective loan or credit facility using the effective interest rate method. Any unamortized balance of costs relating to loans repaid or refinanced is expensed in the period the repayment or refinancing is made, subject to the accounting guidance regarding debt extinguishment. Any unamortized balance of costs related to credit facilities repaid is expensed in the period. Any unamortized balance of costs relating to credit facilities refinanced are deferred and amortized over the term of the respective credit facility in the period the refinancing occurs, subject to the provisions of the accounting guidance relating to debt extinguishment. The unamortized financing costs are reflected in Deferred Charges in the accompanying combined balance sheets. |
(m) | Revenue and expenses: Revenue is recognized when an agreement exists, the vessel is made available to the charterer or services are provided, the charter hire is determinable and collection of the related revenue is reasonably assured. |
(n) | Repairs and maintenance: All repair and maintenance expenses, including underwater inspection costs are expensed in the period incurred. Such costs are included in Vessel operating expenses. |
(o) | Segment reporting: Each of the Owning Company's vessels serve the same type of customer, have similar operations and maintenance requirements, operate in the same regulatory environment, and are subject to similar economic characteristics. Based on this, the Company has determined that it operates in one reportable segment, the international transportation of liquid petroleum gas with its fleet of vessels. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographic information is impracticable. |
(p) | Derivative Instruments: The Company enters into interest rate swap agreements to manage its exposure to fluctuations of interest rate risk associated with its borrowings. All derivatives are recognized in the combined financial statements at their fair value, as either a derivative asset or a liability. The fair value of the interest rate derivatives is based on a discounted cash flow analysis. When such derivatives do not qualify for hedge accounting, the Company recognizes their fair value changes in current period earnings. |
(q) | Fair value of financial instruments: |
Level 1:
|
Quoted market prices in active markets for identical assets or liabilities
|
Level 2:
|
Observable market based inputs or unobservable inputs that are corroborated by market data
|
Level 3:
|
Unobservable inputs that are not corroborated by market data.
|
(r) | Recent accounting pronouncements: There are no recent accounting pronouncements the adoption of which would have a material effect on the Company's combined financial statements in the current period or expected to have an impact on future periods. |
3. | Transactions with Related Parties |
|
April 1,
2013 to July 28, |
Year ended March 31,
|
||||||||||
|
2013
|
2013
|
2012
|
|||||||||
(i) Charter hire commissions , included in Voyage expenses—related party
|
198,360
|
505,926
|
448,683
|
|||||||||
(ii) Management fees
|
601,202
|
1,824,000
|
1,824,000
|
4. | Inventories |
|
March 31,
2013 |
|||
Bunkers
|
1,200,591
|
|||
Victualing
|
64,969
|
|||
Bonded stores
|
16,924
|
|||
Lubricants
|
418,987
|
|||
Communication cards
|
6,770
|
|||
Total
|
1,708,241
|
5. | Vessels, Net |
|
Vessel cost
|
Accumulated
depreciation |
Net book
value |
|||||||||
Balance, April 1, 2012
|
252,023,353
|
(53,743,681
|
)
|
198,279,672
|
||||||||
Vessel improvements
|
469,929
|
—
|
469,929
|
|||||||||
Depreciation
|
—
|
(11,671,879
|
)
|
(11,671,879
|
)
|
|||||||
Balance, March 31, 2013
|
252,493,282
|
(65,415,560
|
)
|
187,077,722
|
||||||||
Vessel improvements
|
90,492
|
—
|
90,492
|
|||||||||
Depreciation
|
—
|
(3,839,271
|
)
|
(3,839,271
|
)
|
|||||||
Balance, July 28, 2013
|
252,583,774
|
(69,254,831
|
)
|
183,328,943
|
6. | Deferred Charges, Net |
|
Financing
costs |
Drydocking
costs |
Total
|
|||||||||
April 1, 2012
|
310,662
|
1,302,458
|
1,613,120
|
|||||||||
Amortization
|
(48,307
|
)
|
(352,950
|
)
|
(401,257
|
)
|
||||||
March 31, 2013
|
262,355
|
949,508
|
1,211,863
|
|||||||||
Amortization
|
(15,437
|
)
|
(116,038
|
)
|
(131,475
|
)
|
||||||
July 28, 2013
|
246,918
|
833,470
|
1,080,388
|
7. | Accrued Expenses |
|
March 31,
2013 |
|||
Accrued loan and swap interest
|
1,407,673
|
|||
Accrued voyage and vessel operating expenses
|
10,912
|
|||
Total
|
1,418,585
|
8. | Long‑Term Debt |
Secured bank debt
|
March 31,
2013 |
|||
(a) Royal Bank of Scotland plc (RBS)
|
|
|||
Tranche B
|
35,798,000
|
|||
Tranche C
|
47,600,000
|
|||
Tranche D
|
54,932,500
|
|||
Total RBS
|
138,330,500
|
|||
(b) Deutsche Schiffsbank
|
2,500,000
|
|||
Total
|
140,830,500
|
|||
Presented as follows:
|
||||
Current portion of long‑term debt
|
12,112,000
|
|||
Long‑term debt
|
128,718,500
|
|||
Total
|
140,830,500
|
Year ending March 31,
|
|
|||
2014
|
12,112,000
|
|||
2015
|
9,612,000
|
|||
2016
|
9,612,000
|
|||
2017
|
9,612,000
|
|||
2018
|
9,612,000
|
|||
Thereafter
|
90,270,500
|
|||
Total
|
140,830,500
|
(a) | The Royal Bank of Scotland plc (RBS): On August 12 2005 Cepheus, Lyra, Cetus and Cygnus Transport Ltd, (Cygnus) a related party (collectively the "Borrowers"), jointly and severally entered into a loan facility divided into four tranches. Tranche A of up to $34.9 million related to Cygnus. Tranche B of up to $51.1 million, Tranche C of up to $68.0 million and Tranche D of up to $68.8 million related to the financing of approximately 80% of the construction cost of the Captain Markos NL , the Captain John NP and the Captain Nicholas ML respectively. Tranches B, C, and D were payable in twenty four equal consecutive six monthly installments of $1,278,500; $1,700,000 and $1,720,000 commencing six months after the final draw down date of each tranche, plus a balloon payment of $ $20,456,000, $27,200,000 and 27,520,000 respectively. The loan bears interest at LIBOR plus a margin of 0.925% per annum. The agreement also requires that Borrowers to maintain a minimum market adjusted a security cover ratio equal to at least 120% of amounts due to RBS under the loan agreement. In the event of noncompliance the Borrowers will be required within 30 days of being notified in writing by RBS to make such prepayment or provide such additional security to restore the security cover ratio. As of March 31, 2013 the Borrowers were not in compliance with the security cover which reflected a shortfall of approximately $7.7 million. The shortfall was effectively remedied by June 30, 2013 following normal scheduled debt repayments, a reduction in the out of the money exposure position on the interest rate swaps and an improvement in the aggregate fair market valuations of the mortgaged vessels. |
(b) | Deutsche Schiffsbank: On July 25, 2007, Orion entered into a loan agreement for $8,000,000 to partially finance the acquisition of LPG Grendon . The loan is payable in twenty four (24) equal consecutive quarterly installments of $250,000, commencing in October 2007, plus a balloon payment of $2,000,000 payable together with the last installment. The loan bears interest at LIBOR plus a margin of 1.1% per annum. In addition Orion was required to maintain a minimum market adjusted asset cover ratio equal to at least 125% of the outstanding loan principal ("security cover ratio"). Orion was in compliance with the security cover ratio as of March 31, 2013. The loan was fully repaid on July 23, 2013. |
9. | Owners' Capital |
Ship‑owning entity
|
|
Date of incorporation
|
Cetus Transport Ltd.
|
March 17, 2004
|
|
Lyra Gas Transport Ltd.
|
January 30, 2005
|
|
Cepheus Transport Ltd.
|
January 27, 2004
|
|
Orion Tankers Limited
|
October 26,2005
|
April 1,
2013 to July 28, |
Year ended March 31,
|
|||||||||||
2013
|
2013
|
2012
|
||||||||||
Time charter revenue
|
8,850,543
|
24,143,606
|
33,399,609
|
|||||||||
Voyage charter revenue
|
6,236,525
|
13,581,561
|
142,500
|
|||||||||
Other income
|
296,048
|
936,679
|
1,028,933
|
|||||||||
Total
|
15,383,116
|
38,661,846
|
34,571,042
|
11. | Voyage Expenses |
|
April 1,
2013 to July 28, |
Year ended March 31,
|
||||||||||
|
2013
|
2013
|
2012
|
|||||||||
Brokers commission
|
396,720
|
1,025,761
|
897,367
|
|||||||||
Bunkers
|
2,755,445
|
6,678,660
|
481,903
|
|||||||||
Port charges and other related expenses
|
391,091
|
746,574
|
180,983
|
|||||||||
Security cost
|
206,940
|
582,112
|
668,458
|
|||||||||
War risk insurances
|
26,673
|
111,626
|
241,854
|
|||||||||
Other voyage expenses
|
45,363
|
112,450
|
53,816
|
|||||||||
Total voyage expenses
|
3,822,232
|
9,257,183
|
2,524,381
|
12. | Vessel Operating Expenses |
|
April 1, 2013
to July 28, |
Year ended March 31,
|
||||||||||
|
2013
|
2013
|
2012
|
|||||||||
Crew wages and related
costs |
2,519,315
|
7,932,836
|
8,007,295
|
|||||||||
Spares and stores
|
1,284,161
|
1,502,111
|
2,143,239
|
|||||||||
Lubricants
|
176,502
|
686,375
|
851,829
|
|||||||||
Insurance
|
298,249
|
942,847
|
997,801
|
|||||||||
Repairs and maintenance costs
|
279,921
|
848,576
|
2,237,825
|
|||||||||
Miscellaneous expenses
|
80,577
|
126,181
|
172,360
|
|||||||||
Total
|
4,638,725
|
12,038,926
|
14,410,349
|
13. | Interest and Finance Cost |
14. | Income Taxes |
15. | Commitments and Contingencies |
16. | Derivative Instruments |
|
|
March 31, 2013
|
|||||||
Derivatives not designated as hedging instruments
|
Balance sheet location
|
Asset
derivatives |
Liability
derivatives |
||||||
Interest Rate Swap Agreements
|
Long-term liabilities—Derivatives instruments
|
—
|
21,369,878
|
||||||
Total derivatives not designated as hedging instruments
|
|
—
|
21,369,878
|
Derivatives not designated as
|
Location of
|
April 1, 2013
to July 28, 2013 |
Year ended March 31,
|
||||||||||
hedging instruments
|
gain/(loss) recognized
|
(Unaudited)
|
2013
|
2012
|
|||||||||
Interest Rate Swap—Change in fair value
|
Gain/(loss) on derivatives
|
4,684,007
|
(13,680
|
)
|
(4,607,773
|
)
|
|||||||
Interest Rate Swap—Realized loss
|
Gain/(loss) on derivatives
|
(1,853,802
|
)
|
(5,574,799
|
)
|
(6,335,543
|
)
|
||||||
Total gain/(loss) on derivatives
|
|
2,830,205
|
(5,588,479
|
)
|
(10,943,316
|
)
|
17. | Financial Instruments |
(a)
|
Interest rate risk:
The Company's long‑term bank loans are based on LIBOR and hence the Company is exposed to movements in LIBOR. The Company entered into interest rate swap agreements, discussed in Note 16, in order to hedge its variable interest rate exposure.
|
|
|
(b) | Concentration of credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of trade accounts receivable, amounts due from related parties, cash and cash equivalents. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers' financial condition and generally does not require collateral for its trade accounts receivable. The Company places its cash and cash equivalents, with high credit quality financial institutions. |
(c) | Fair value: The carrying values of trade accounts receivable, amounts due from related parties, cash and cash equivalents, accounts payable, amounts due to related parties and accrued liabilities are reasonable estimates of their fair value due to the short‑term nature of these financial instruments. The fair value of long‑term bank loans approximate the recorded value, due to their variable interest rate, being the LIBOR. LIBOR rates are observable at commonly quoted intervals for the full terms of the loans and hence long‑term bank loans are considered Level 2 items in accordance with the fair value hierarchy. |
18. | Subsequent Events |
• | Cepheus, Lyra and Cetus sold the Captain Nicholas ML , the Captain John NP and the Captain Markos NL to CMNL LPG Transport LLC, CJNP LPG Transport LLC and CNML LPG Transport LLC (being newly created entities of the same shareholders), respectively, which also assumed the related outstanding bank debt and interest rate swaps related to each vessel. |
• | 100% interest in CMNL LPG Transport LLC, CJNP LPG Transport LLC and CNML LPG Transport LLC was contributed to Dorian LPG LTD in exchange for equity in Dorian LPG LTD. |
• | The Grendon was sold to Grendon Tanker LLC, a wholly-owned subsidiary of Dorian LPG LTD. |
|
DORIAN LPG (USA) LLC:
Pro Forma General
Agency Agreement
|
|
CNML LPG TRANSPORT LLC
|
||
|
|
||
|
|
||
|
By Dorian LPG (USA) LLC, as
|
||
|
|
||
|
General Agent
|
||
|
|
||
|
|
||
|
By
|
/s/ John C. Lycouris
|
|
|
(Authorized Signatory)
|
|
CNML LPG TRANSPORT LLC
|
||
|
|
||
|
By
|
/s/ Theodore Young
|
|
|
|
Name: Theodore Young
|
|
|
|
Title: President
|
|
DORIAN LPG (USA) LLC
|
||
|
|
||
|
By
|
/s/ John Lycouris
|
|
|
|
Name: John Lycouris
|
|
|
|
Title: CEO
|
|
THE MANAGER:
|
||
|
DORIAN LPG (USA) LLC
|
||
|
By:
|
/s/ John C. Lycouris | |
|
Name: John C. Lycouris
|
||
|
Title: Chief Executive Officer
|
||
|
|
||
|
|
||
|
THE COMPANY:
|
||
|
FOR AND ON BEHALF OF EACH OWNER AS
FROM TIME TO TIME LISTED AND
IDENTIFIED ON SCHEDULE I:
|
||
|
DORIAN LPG LTD.
|
||
|
|
||
|
By:
|
/s/ John C. Hadjipateras | |
|
Name: John C. Hadjipateras
Title: President and Chief Executive Officer |
Newbuilding
|
Owner
|
HHI Hull No. 2656
|
COMET LPG TRANSPORT LLC
|
HHI Hull No. 2657
|
CORSAIR LPG TRANSPORT LLC
|
HHI Hull No. 2658
|
CORVETTE LPG TRANSPORT LLC
|
HHI Hull No. S749
|
DORIAN SHANGHAI LPG TRANSPORT LLC
|
HHI Hull No. S750
|
DORIAN HOUSTON LPG TRANSPORT LLC
|
HHI Hull No. S751
|
DORIAN AMSTERDAM LPG TRANSPORT LLC
|
HHI Hull No. S752
|
DORIAN BARCELONA LPG TRANSPORT LLC
|
HHI Hull No. S753
|
DORIAN SAO PAULO LPG TRANSPORT LLC
|
HHI Hull No. S754
|
DORIAN CAPE TOWN LPG TRANSPORT LLC
|
HHI Hull No. S755
|
DORIAN ULSAN LPG TRANSPORT LLC
|
HHI Hull No. S756
|
DORIAN MONACO LPG TRANSPORT LLC
|
HHI Hull No. S757
|
DORIAN EXPLORER LPG TRANSPORT LLC
|
HHI Hull No. S758
|
DORIAN EXPORTER LPG TRANSPORT LLC
|
DSME Hull No. 2336
|
DORIAN DUBAI LPG TRANSPORT LLC
|
DSME Hull No. 2337
|
DORIAN GENEVA LPG TRANSPORT LLC
|
DSME Hull No. 2338
|
DORIAN TOKYO LPG TRANSPORT LLC
|
HHI Hull No. 2660
|
CONCORDE LPG TRANSPORT LLC
|
HHI Hull No. 2661
|
CONSTELLATION LPG TRANSPORT LLC
|
HHI Hull No. 2662
|
COMMANDER LPG TRANSPORT LLC
|
ENGAGEMENT OF MANAGER
|
1
|
||
|
Section 1.1
|
Engagement
|
1
|
|
Section 1.2
|
Powers and Duties of the Manager
|
2
|
|
Section 1.3
|
Reliance on CEO and CFO of the Company
|
2
|
ARTICLE II
|
TERM
|
|
2
|
|
Section 2.1
|
Term
|
2
|
ARTICLE III
|
MANAGER'S RESPONSIBILITIES
|
2
|
|
|
Section 3.1
|
Services
|
2
|
ARTICLE IV
|
MANAGER'S PERSONNEL AND SECONDMENT THEREOF TO SERVE AS OFFICERS
|
2
|
|
|
Section 4.1
|
Employment of Personnel
|
2
|
|
Section 4.2
|
Officers
|
2
|
ARTICLE V
|
DUTY OF CARE AND ADDITIONAL COVENANTS OF THE MANAGER
|
3
|
|
|
Section 5.1
|
Duty of Care
|
3
|
|
Section 5.2
|
Additional Covenants
|
3
|
ARTICLE VI
|
COMPENSATION
|
|
4
|
|
Section 6.1
|
Compensation
|
4
|
|
Section 6.2
|
Invoicing
|
4
|
|
Section 6.3
|
Dispute of Invoice
|
4
|
|
Section 6.4
|
Payment
|
4
|
|
Section 6.5
|
Company Expenses
|
4
|
ARTICLE VII
|
TERMINATION RIGHTS
|
5
|
|
|
Section 7.1
|
Termination By the Manager
|
5
|
|
Section 7.2
|
Termination By the Company
|
6
|
ARTICLE VIII
|
TERMINATION PROCEDURES
|
7
|
|
|
Section 8.1
|
Final Accounting
|
7
|
|
Section 8.2
|
Termination Adjustments
|
7
|
ARTICLE IX
|
LIMITATION ON LIABILITY; INDEMNIFICATION
|
7
|
|
|
Section 9.1
|
Force Majeure
|
7
|
|
Section 9.2
|
Limitation on Liability
|
8
|
|
|
Section 9.3
|
Indemnification
|
8
|
ARTICLE X
|
AUDIT RIGHTS
|
|
8
|
ARTICLE XI
|
MISCELLANEOUS
|
|
8
|
|
Section 11.1
|
Notices
|
8
|
|
Section 11.2
|
Assignments; Successors
|
9
|
|
Section 11.3
|
Confidentiality
|
9
|
|
Section 11.4
|
Authority of the Parties
|
10
|
|
Section 11.5
|
Entire Agreement
|
10
|
|
Section 11.6
|
Headings
|
10
|
|
Section 11.7
|
Counterparts
|
10
|
|
Section 11.8
|
Modification
|
10
|
|
Section 11.9
|
Waivers
|
10
|
|
Section 11.10
|
Severability
|
10
|
|
Section 11.11
|
Independent Contractor
|
10
|
|
Section 11.12
|
Attorneys' Fees
|
10
|
|
Section 11.13
|
Governing Law; Process
|
11
|
|
|
|
(i) | any reimbursement of the Costs and Expenses or the Company Expenses due the Manager hereunder; or |
(ii) | any other material respect under this Agreement and such default continues after not less than thirty (30) days written notice thereof by the Manager to the Company; |
(A) | the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Company's assets, except such a disposition to SeaDor Holdings LLC, Dorian Holdings LLC, Scorpio Tankers Inc. or their respective affiliates (the " Existing Control Group "); |
(B) | an order made for, or the adoption by the Company's Board of a plan of, liquidation or dissolution of the Company; |
(C) | the consummation of any transaction (including any merger or consolidation) the result of which is that any "person" (as such term is used in Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as amended (the " Exchange Act ")) becomes the beneficial owner, directly or indirectly, of a majority of the Company's voting securities (unless such "person" is a member of the Existing Control Group), measured by voting power rather than number of shares; |
(D) | if, at any time, the Company becomes insolvent, admits in writing its inability to pay its debts as they become due, is adjudged bankrupt or declares bankruptcy or makes an assignment for the benefit of creditors, or makes a proposal or similar action under the bankruptcy, insolvency or other similar laws of any applicable |
(E) | the consolidation of the Company with, or the merger of the Company with or into, any "person" (other than a member of the Existing Control Group), or the consolidation of any "person" (other than a member of the Existing Control Group) with, or the merger of any "person" (other than a member of the Existing Control Group) with or into, the Company, in any such event pursuant to a transaction in which any of the common stock outstanding immediately prior to such transaction are converted into or exchanged for cash, securities or other property or receive a payment of cash, securities or other property, other than any such transaction where the Company's voting securities outstanding immediately prior to such transaction are converted into or exchanged for voting securities of the surviving or transferee "person" constituting a majority (measured by voting power rather than number of shares) of the outstanding voting securities of such surviving or transferee "person" immediately after giving effect to such issuance; or |
(F) | a change in directors after which a majority of the members of the Company's Board are not directors who were either nominated by, appointed by or otherwise elected with the approval of current Board members at the time of such election. |
(i) | the Manager breaches of any material term of this Agreement which continues unremedied for thirty (30) days after written notice by the Company of the breach to the Manager; |
(ii) | the Manager has been convicted of, has entered a plea of guilty or nolo contendere with respect to, or has entered into a plea bargain or settlement admitting guilt for, a crime, which conviction, plea bargain or settlement is demonstrably and materially injurious to the Company ; |
(iii) | the Manager commits fraud or is grossly negligent in the performance of its obligations hereunder, or commits an act of willful misconduct, and the Company is materially injured thereby in any such case ; or |
(iv) | the Manager becomes insolvent, admits in writing its inability to pay its debts as they become due, is adjudged bankrupt or declares bankruptcy or makes an assignment for the benefit of creditors, a proposal or similar action under the bankruptcy, insolvency or other similar laws of any applicable jurisdiction, or commences or consents to proceedings relating to it under any reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction. |
If to the Company at:
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Trust Company Complex
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Ajeltake Road, Ajeltake Island
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Majuro, Marshall Islands, MH96960
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Attention: John C. Hadjipateras
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E-Mail: John.Hadjipateras@dorianlpg.com
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with a copy to (which shall not constitute notice) to:
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Seward & Kissel LLP
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One Battery Park Plaza
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New York, New York 10004
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Attention: Derick W. Betts Jr.
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E-Mail: betts@sewkis.com
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If to the Manager, at:
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27 Signal Road,
Stamford, Connecticut 06902 |
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Attention: John C. Lycouris
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E-Mail: John.Lycouris@dorianlpg.com
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with a copy to (which shall not constitute notice) to:
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Seward & Kissel LLP
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One Battery Park Plaza
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New York, New York 10004
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Attention: Derick W. Betts Jr.
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E-Mail: betts@sewkis.com
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(a) | a quarterly report to be delivered within 45 days of the end of each fiscal quarter of the Company (" Fiscal Quarter ") setting out the interim consolidate financial results of the Company and its Subsidiaries for such quarter and for the applicable fiscal year of the Company and its Subsidiaries ("F iscal Year ") through the end of such Fiscal Quarter; |
(b) | a draft of the reports, certificates, documents and other information required under any credit facility and any other financing arrangements of the Company or any Subsidiary (" Financing Agreements ") to be delivered at least two business days prior to their required delivery to the lenders under such Financing Agreements; |
(c) | as and when requested by the Company's Board, its Chief Executive Officer or its Chief Financial Officer, draft reports regarding financial and other information required in connection with applicable laws (including annual and other reports that may be required to be filed under the Exchange Act and all other applicable laws and regulations); and |
(d) | as and when reasonably requested by the Company from time to time, such other reports with respect to financial and other information of the Company and the Subsidiaries. |
(a) | within 45 days of the end of each Fiscal Quarter, unaudited consolidated financial statements of the Company and its Subsidiaries for such Fiscal Quarter, to be reviewed by the external auditors of the Company, prepared in accordance with GAAP and the rules and regulations of the U.S. Securities and Exchange Commission (the " SEC "), on a consolidated basis with all Subsidiaries of the Company; |
(b) | within 60 days of the end of each Fiscal Year, consolidated financial statements of the Company and its Subsidiaries for such Fiscal Year, to be audited by the external auditors of the Company, prepared in accordance with GAAP and the rules and regulations of the SEC, on a consolidated basis with all Subsidiaries of the Company; and |
(c) | tax returns for the Company and all of its Subsidiaries required to be filed by applicable laws and regulations. |
(a) | Responsibilities of the Manager . The Manager shall assist the Company with the following items: |
(i) | compliance with all applicable laws and regulations, including all relevant securities laws and the rules and regulations of the SEC or the Exchange; |
(ii) | arranging for the provision of advisory services to the Company with respect to the Company's obligations under applicable securities laws in the United States and disclosure and reporting obligations under applicable securities laws, including the preparation for review, approval and filing by the Company of reports and other documents with the SEC and all other applicable regulatory authorities; |
(iii) | maintaining each Company Group member's corporate existence and good standing in all necessary jurisdictions and assisting in all other corporate and regulatory compliance matters; |
(iv) | conducting investor relations functions on behalf of the Company; and |
(v) | adjusting and negotiating settlements, with or on behalf of claimants or underwriters, of any claim, damages for which are recoverable under insurance policies (subject to any applicable deductible). |
(b) | Administration and Settlement of Legal Actions . If any action, claim, complaint, demand, suit, judgment, investigation or proceeding, pending or threatened, by any person or before any governmental authority (each, a " Legal Action ") is commenced against or is required to be commenced in favor of any member of the Company Group or any Vessel of a Subsidiary, the Manager shall arrange for the commencement or defense of such Legal Action, as the case may be, in the name of, on behalf of and at the expense of the Company, including retaining and instructing legal counsel, investigating the substance of the Legal Action and entering pleadings with respect to the Legal Action. The Manager shall assist the Company in administering and supervising any such Legal Actions and shall keep the Company advised of the status thereof. The Manager may settle any Legal Action on behalf of a Company where the amount of settlement is less than $500,000 and, in excess of such amount, with the approval of the Company's Board. |
(c) | Labor Relations Proceedings . For Legal Actions in favor of or against any Company Group member that relate to labor relations or employment proceedings, strikes or collective bargaining, the Manager shall represent any such Company Group member in any such labor relations or employment proceedings and shall undertake any labor relations or employment negotiations in respect of any of the Vessels or any Company Group member on behalf of such Company Group member, should such representation or negotiations be required. The Manager shall keep the Company advised of the progress of any such labor relations proceedings or negotiations. The Manager may enter into collective bargaining agreements and other labor or employment agreements and any material amendments thereto; provided, however, that such agreements and amendments must be approved by the Company's Board if the terms and conditions of any such agreements or amendments are inconsistent, in a material and adverse way to the Company Group member, with other collective bargaining agreements concerning or in respect of the crew. |
(d) | Interaction with Regulatory Authorities . Notwithstanding anything in this Agreement or otherwise, the Manager shall not act for or on behalf of the Company in its relationships with any regulatory authorities except to the extent specifically authorized by the Company from time to time. |
(a) | identify suitable financing of the Company Group's business; |
(b) | issue and/or repurchase of the Company Group's securities; |
(c) | continuously review the Company Group's financing structure and seek to improve the structure and terms of the same; |
(d) | obtain offers for loans and other financial credits required to finance the Company Group's activities from time to time, negotiate the same and present terms to the Company Group for approval by the Company's Board; |
(e) | review of the Company Group's strategy and provide input to such strategy development process as the Company Group from time to time shall put in place; |
(f) | identify business opportunities within the scope of the Company Group's business plan and strategy and present the same for review and/or approval by the the Company's Board; |
(g) | identify relevant opportunities for the purchase or sale of assets, corporate mergers and/or acquisitions, including, but not limited to, arrange the financing of any acquisition, renegotiating existing financing and other contractual arrangements required and the general completion of any such transactions; |
(h) | provide the Company Group with cash management and services, including assistance with overseeing banking services and bank accounts and arranging for the deposit of funds; |
(i) | administer payroll services, benefits and directors fees, for the employees, officers or directors of the Company and its Subsidiaries; |
(j) | provide the Company with information technology support; |
(k) | provide office space and office equipment for personnel of the Company at the location of the Manager or any subsidiary thereof or as otherwise reasonably designated by the Company, and clerical, secretarial, accounting and administrative assistance as may be reasonably necessary; |
(l) | at the request and under the direction of the Company, handle all administrative and clerical matters in respect of (i) the call and arrangement of all annual and special meetings of shareholders, (ii) the preparation of all materials (including notices of meetings and proxy or similar materials) in respect thereof and (iii) the submission of all such materials to the Company in sufficient time prior to the dates upon which they must be mailed, filed or otherwise relied upon so that the Company has full opportunity to review, approve, execute and return them to the Manager for filing or mailing or other disposition as the Company may require or direct; |
(m) | provide, at the request and under the direction of the Company, such communications to the transfer agent for the Company as may be necessary or desirable; |
(n) | make recommendations to the Company for the appointment of auditors, accountants, legal counsel and other accounting, financial or legal advisers, and technical, commercial, marketing or other independent experts; provided, however, that nothing herein shall permit the Manager to engage any such adviser or expert for the Company without the Company's specific approval; and |
(o) | attend to all other administrative matters necessary to ensure the professional management of the Company's business or as reasonably requested by the Company from time to time. |
Subsidiary
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Country of Incorporation
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Dorian LPG Management Corp
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Marshall Islands
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Dorian LPG (USA) LLC
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United States (Delaware)
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Dorian LPG (UK) Ltd.
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United Kingdom
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CNML LPG Transport LLC
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Marshall Islands
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CJNP LPG Transport LLC
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Marshall Islands
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CMNL LPG Transport LLC
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Marshall Islands
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Grendon Tanker LLC
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Marshall Islands
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Comet LPG Transport LLC
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Marshall Islands
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Seacor LPG I, LLC
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Marshall Islands
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Seacor LPG II, LLC
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Marshall Islands
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Corsair LPG Transport LLC
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Marshall Islands
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Corvette LPG Transport LLC
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Marshall Islands
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Concorde LPG Transport LLC
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Marshall Islands
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Constellation LPG Transport LLC
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Marshall Islands
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Commander LPG Transport LLC
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Marshall Islands
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Dorian Shanghai LPG Transport LLC
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Marshall Islands
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Dorian Houston LPG Transport LLC
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Marshall Islands
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Dorian Amsterdam LPG Transport LLC
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Marshall Islands
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Dorian Barcelona LPG Transport LLC
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Marshall Islands
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Dorian Sao Paulo LPG Transport LLC
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Marshall Islands
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Dorian Cape Town LPG Transport LLC
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Marshall Islands
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Dorian Ulsan LPG Transport LLC
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Marshall Islands
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Dorian Monaco LPG Transport LLC
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Marshall Islands
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Dorian Explorer LPG Transport LLC
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Marshall Islands
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Dorian Exporter LPG Transport LLC
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Marshall Islands
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Dorian Dubai LPG Transport LLC
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Marshall Islands
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Dorian Geneva LPG Transport LLC
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Marshall Islands
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Dorian Tokyo LPG Transport LLC
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Marshall Islands
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Constitution LPG Transport LLC
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Marshall Islands
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Capricorn LPG Transport LLC
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Marshall Islands
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Date: July 29, 2014
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/s/ John C. Hadjipateras
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John C. Hadjipateras
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Chief Executive Officer
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Date: July 29, 2014
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/s/ Theodore B. Young
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Theodore B. Young
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Chief Financial Officer
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Date: July 29, 2014
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/s/ John C. Hadjipateras
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John C. Hadjipateras
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Chief Executive Officer
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Date: July 29, 2014
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/s/ Theodore B. Young
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Theodore B. Young
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Chief Financial Officer
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