Nov. 01–Dorian LPG, which transports liquefied petroleum gas, reported this week that its earnings rose in the past quarter, a period marked by a failed acquisition of the company by a Singapore shipping firm.
In the past three months, Dorian’s revenues increased about 18 percent year over year, to about $41 million. It benefited from increasing demand for its largest gas carriers, which reflected growing exports. The higher returns helped the company shrink its quarterly loss to about $8.2 million, compared with a deficit of $11.9 million in the same period in 2017.
Dorian is moving ahead after BW LPG abandoned its pursuit of the company, following several billion-dollar offers. The deal foundered after both companies’ executives complained about their counterparts’ negotiating tactics.
“It is not normal practice, nor in the best interest of our shareholders, to hold a proposal open indefinitely, especially when it is highly favorable to the counterparty,” BW board Chairman Andreas Sohmen-Pao said in an Oct. 7 letter, to Dorian CEO, President and Chairman John Hadjipateras, that withdrew BW’s offer.
In a responding letter, Hadjipateras said Dorian officials had considered BW’s offer with an initial meeting and BW presentation to Dorian’s board and also held a recent meeting with BW advisers that included extensive Dorian commentary on the proposal.
“To explore the full range of value-creating opportunities available to Dorian LPG, we asked several times if you could improve your proposal and left the door open to further discussion and a response to the issues that we outlined in our latest meeting,” Hadjipateras said. “Instead, you have refused to consider improving your proposal and, most recently, have withdrawn your proposal.”
BW’s entreaties started in late May, when the company announced its plan to combine with Dorian in an all-stock deal worth $1.1 billion, to create a company with 73 vessels. On its own, Dorian owns and operates 22 very-large gas carriers, according to its website.
With a merger off the table for the foreseeable future, Dorian officials have said they were still optimistic about the firm’s long-term prospects.
They have pointed to a recently completed refinancing plan and the company’s preparations for new regulations on shipping sulfur emissions set to be implemented in the next two years.
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