Introductory Note
The information contained in this Current Report on Form 8-K is hereby incorporated by reference into the registration statement on Form S-3 (File No. 333-26588) of Dorian LPG Ltd. (the “Company”), filed with the Commission on August 5, 2022.
Item 1.01 Entry into a Material Definitive Agreement
The information provided in Item 2.03 below is incorporated herein by reference, as applicable.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
On December 22, 2023, the Company and certain of its wholly-owned subsidiaries entered into an amended and restated debt financing facility (the “2023 A&R Debt Facility”) with Crédit Agricole Corporate and Investment Bank (“Credit Agricole”), ING Bank N.V. (“ING”), Skandinaviska Enskilda Banken AB (publ) (“SEB”), BNP Paribas (“BNP”), and Danish Ship Finance A/S (“DSF”, and together with Credit Agricole, ING, SEB and BNP, the “Lenders”). The 2023 A&R Debt Facility amended and restated the Company’s 2022 debt financing facility with the Lenders and consists of (i) a term loan facility in an aggregate original principal amount of $240.0 million, of which $215,000,000 remains outstanding on the date hereof, (ii) a revolving credit facility in an aggregate principal amount of up to $50.0 million and (iii) an uncommitted accordion term loan facility in an aggregate principal amount of up to $100.0 million. The 2023 A&R Debt Facility matures on August 4, 2029, with drawn amounts thereunder accruing interest at a rate of SOFR plus a margin ranging between 2.05 and 2.15%, plus or minus a sustainability pricing adjustment of 0.05%. The undrawn revolving credit facility accrues interest at a rate equal to 0.40% of the margin.
The 2023 A&R Debt Facility is secured by, among other things, (i) first priority Bahamian mortgages on the vessels financed, (ii) first priority assignments of all of the financed vessels’ mandatory insurances and earnings and management agreements; (iii) first priority pledge in respect of all limited liability company interests of the borrowers and vessel-owning guarantors; (iv) first priority charter assignments of all of the financed vessels’ long-term charters to non-Helios LPG Pool parties with an original tenor greater than 13 months; and (v) a guaranty by the Company guaranteeing the obligations of the borrower and other guarantors under the facility agreement. The 2023 A&R Debt Facility further provides that the facility is to be secured by assignments of the borrower’s rights under any hedging contracts in connection with the facility, but such assignments have not been entered into at this time.
The 2023 A&R Debt Facility also contains customary covenants that require the Company to maintain adequate insurance coverage and to properly maintain the vessels. The loan facility 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 certain other debt obligations and non-compliance with security documents, and customary restrictions on paying dividends if an event of default has occurred and is continuing, or if an event of default would result therefrom.
The Company is required to comply with the following financial covenants from the 2023 A&R Debt Facility, calculated on a consolidated basis, determined and defined according to the provisions of the loan agreement and its amendments:
| ● | The ratio of current assets and long-term restricted cash divided by current liabilities, excluding current portion of long-term debt, shall always be greater than 1.00; | |
| ● | Maintain minimum shareholders’ equity at all times equal to the aggregate of $400 million; | |
| ● | The ratio of consolidated net debt to consolidated total capitalization shall not exceed 0.60 to 1.00; | |
| ● | Fair market value of the mortgaged ships plus any additional security over the outstanding loan balance shall not be less than 145%; and | |
| ● | Minimum liquidity covenant of the greater of (i) $27.5 million and (ii) 5% of consolidated interest-bearing debt. | |
