Dorian LPG Ltd., owner and operator of very large gas carriers (VLGC), said it has entered into a $97 million bridge loan agreement with DNB Capital LLC.
The proceeds of the Bridge Loan were used to repay the remaining outstanding debt of $98.6 million under the company's secured bank debt facility with Royal Bank of Scotland plc. for $94.7 million and to pay fees and expenses associated with the transaction. As part of the refinancing, $6 million of cash previously restricted under the RBS Loan Facility was released as unrestricted cash for use in operations.
John Hadjipateras, Chairman and Chief Executive Officer of the Company, said, "We continue to actively strengthen our balance sheet and increase our financial flexibility. We will remain proactive in our financial and commercial activities to maximize Dorian's ability to participate in the continuing favorable developments in the global LPG market with the consistent goal of creating shareholder value."
Repayment of the principal amount of the Bridge Loan is due on or before August 8, 2018 and accrues interest on the outstanding principal amount at a rate of LIBOR plus 2.5 percent for the period ending December 7, 2017; LIBOR plus 4.5 percent for the period from December 8, 2017 until March 7, 2018; LIBOR plus 6.5 percent for the period March 8, 2018 until June 7, 2018, and 8.5 percent from June 8, 2018 until the Maturity Date. The Bridge Loan does not have any scheduled amortization payments.
The 2017 Bridge Loan contains customary covenants that require us to maintain adequate insurance coverage, properly maintain the vessels and to obtain the lender's prior consent before changes are made to the flag, class or management of the vessels. The 2017 Bridge Loan includes customary events of default, including those relating to a failure to pay principal or interest, breaches of covenants, representations and warranties, a cross-default to other indebtedness and non-compliance with security documents, and customary restrictions from paying dividends if an event of default has occurred and is continuing, or if an event of default would result therefrom. The financial covenants are substantially similar to those in the Company's amended $758 million debt financing facility entered into in March 2015.
