Odfjell Enters JV, Adds Four More Gas Carriers

Odfjell SE has today entered into an agreement with affiliates of Breakwater Capital and Oak Hill Advisors to form a liquefied petroleum gas and ethylene (LPG/E) shipping joint venture.

Further, Odfjell announced that it has exercised its option for construction of four 22,000 cbm LPG/E gas carriers at Nantong Sinopacific, scheduled for delivery between September 2016 and June 2017. The contract price in total is in the region of USD 200 million.

In the LPG/E gas carrier segment, Odfjell currently owns and operates two 2008-built 9,000 cbm vessels, has four 17,000 cbm vessels under construction at Nantong Sinopacific, scheduled for delivery between October 2015 and May 2016, and the option for four vessels now being exercised.

In accordance with the agreement, Breakwater and Oak Hill Advisors have jointly agreed to invest approximately $50 million as consideration for a 50.0% equity interest in Odfjell’s LPG/E business.

Further, Odfjell and the partners have each agreed to commit approximately $50 million to finance the growth of the joint venture.

Completion of the joint venture agreement is subject to customary conditions for closing including execution of the shipbuilding contracts related to the vessels. It is expected that completion will occur within the next three months.

Odfjell and the partners aim through consolidation and partnerships with other first-class operators to build a leading LPG/E shipping platform founded upon second-to-none operational excellence, a modern and eco-friendly fleet and a long-term market perspective.

Jan A. Hammer, President and CEO of Odfjell
, says: “Odfjell is delighted to have Breakwater Capital and Oak Hill Advisors as its partners in the shipping segment of LPG and ethylene. Together, we will enhance our growth opportunities and broaden our capabilities.”

Jeppe Jensen of Breakwater Capital says: “We are pleased to be an integral part of a strong platform within the LPG/Ethylene segment. The combination of a modern fuel efficient fleet and two first class partners such as Odfjell and Oak Hill Advisors represented the perfect entry opportunity in a sector we have been
and are excited about.”

SEB has acted as sole financial advisor and Thommessen has acted as legal counsel to Odfjell. Reed Smith LLP has acted as legal counsel to Oak Hill Advisors.

Press Release, May 16, 2014; Image: Odfjell

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