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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2021
or
☐☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-36437
Dorian LPG Ltd.
(Exact name of registrant as specified in its charter)
Marshall Islands
(State or other jurisdiction of incorporation or organization)
27 Signal Road, Stamford, CT
(Address of principal executive offices)
66-0818228
(I.R.S. Employer Identification No.)
06902
(Zip Code)
Registrant’s telephone number, including area code: (203) 674-9900
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class
Common stock, par value $0.01 per share
Trading Symbol
LPG
Name of Each Exchange on Which Registered
New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange
Act.
Large accelerated filer ☐
Smaller reporting company ☐
Accelerated filer ☒
Emerging growth company ☐
Non-accelerated filer ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the registrant’s common stock held by non-affiliates, based upon the closing price of common stock as reported on the New York Stock
Exchange as of September 30, 2020, was approximately $290,509,924. For this purpose, all outstanding shares of common stock have been considered held by non-affiliates,
other than the shares beneficially owned by directors, officers and shareholders of 10% or more of the registrant’s outstanding common shares, without conceding that any of
the excluded parties are "affiliates" of the registrant for purposes of the federal securities laws. As of June 1, 2021, there were 41,086,069 shares of the registrant’s common
stock outstanding.
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TABLE OF CONTENTS
BUSINESS
RISK FACTORS
UNRESOLVED STAFF COMMENTS
PROPERTIES
LEGAL PROCEEDINGS
MINE SAFETY DISCLOSURES
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
RESERVED
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
CONTROLS AND PROCEDURES
OTHER INFORMATION
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
EXECUTIVE COMPENSATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDERS MATTERS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
PRINCIPAL ACCOUNTING FEES AND SERVICES
PART I.
ITEM 1.
ITEM 1A.
ITEM 1B.
ITEM 2.
ITEM 3.
ITEM 4.
PART II.
ITEM 5.
ITEM 6.
ITEM 7.
ITEM 7A.
ITEM 8.
ITEM 9.
ITEM 9A.
ITEM 9B.
PART III.
ITEM 10.
ITEM 11.
ITEM 12.
ITEM 13.
ITEM 14.
PART IV.
ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
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FORWARD-LOOKING STATEMENTS AND SUMMARY OF RISK FACTORS
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities
Litigation Reform Act of 1995 (the “PSLRA”), including analyses and other information based on forecasts of future results and
estimates of amounts not yet determinable and statements relating to our future prospects, developments and business strategies.
Such forward-looking statements are intended to be covered by the safe harbor provided for under the sections referenced in the
immediately preceding sentence and the PSLRA. Forward-looking statements are identified by their use of terms and phrases
such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “might,”
“pending,” “plan,” “possible,” “potential,” “predict,” “project,” “seeks,” “should,” “targets,” “will,” “would,” and similar
expressions, terms and phrases, including references to assumptions.
The forward-looking statements in this report are based upon various assumptions, many of which are based, in turn,
upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained
in our records and other data available from third parties. Although we believe that these assumptions were reasonable when
made, because these assumptions are inherently subject to significant uncertainties and contingencies that are difficult or
impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations,
beliefs or projections.
In addition to important factors and matters discussed elsewhere in this report, and in the documents incorporated by
reference herein, important factors that, in our view, could cause our actual results to differ materially from those discussed in the
forward-looking statements include:
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our future operating or financial results;
our business strategies, including with respect to acquisitions and chartering, and expected capital spending or
operating expenses, as well as any difficulty we may have in managing planned growth properly;
shipping trends, including changes in charter rates applicable to alternative propulsion technologies, scrubber
equipped and non-scrubber equipped vessels, scrapping rates and vessel and other asset values;
changes in trading patterns that impact tonnage requirements;
compliance with laws, treaties, rules, regulations and policies (including amendments or other changes thereto)
applicable to the liquefied petroleum gas, or LPG, shipping industry, including, without limitation, legislation
adopted by international organizations such as the International Maritime Organization and the European
Union or by individual countries, as well as the impact and costs of our compliance with, and the potential of
liability under, such laws, treaties, rules, regulations and policies;
the timing, cost and prospects of purchasing, installing and operating exhaust gas cleaning systems (commonly
referred to as “scrubbers”) to reduce sulfur emissions on certain of our vessels;
charterers’ increasing emphasis on environmental and safety concerns and investors’ increasing scrutiny and
changing expectations with respect to public company Environmental, Social and Governance policies;
general economic conditions and specific economic conditions in the oil and natural gas industry and the
countries and regions where LPG is produced and consumed;
completion of infrastructure projects to support marine transportation of LPG, including export terminals and
pipelines;
factors affecting supply of and demand for LPG, LPG shipping, and LPG vessels, including, among other
things: the production levels, price and worldwide consumption and storage of oil, refined petroleum products
and natural gas, including production from United States shale fields; any oversupply of or limited demand for
LPG vessels comparable to ours or higher specification vessels; trade conflicts and the imposition of tariffs or
otherwise on LPG or LPG products resulting from domestic and international political and geopolitical
conditions; and shifts in consumer demand from LPG towards other energy sources;
any decrease in the value of the charter-free market values of our vessels or reduction in our charter hire rates
and profitability associated with such vessels as a result of increase in the supply of or decrease in
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the demand for LPG, LPG shipping or LPG vessels;
greater than anticipated levels of LPG vessel newbuilding orders or lower than anticipated rates of LPG vessel
scrapping;
the aging of the Company’s fleet which could result in increased operating costs, impairment or loss of hire;
our ability to profitably employ our vessels, including vessels participating in the Helios Pool (defined below);
unavailability of spot charters and the volatility of prevailing spot market charter rates, which may affect our
ability to realize the expected benefits from our time chartered-in vessels, including those in the Helios Pool;
failure of our charterers or other counterparties to meet their obligations under our charter agreements;
shareholders’ reliance on us to enforce our rights against contract counterparties;
competition in the LPG shipping industry, including our ability to compete successfully for future chartering
opportunities and newbuilding opportunities (if any);
future purchase prices of newbuildings and secondhand vessels and timely deliveries of such vessels (if any)
and, relatedly, the risks associated with the purchase of second-hand vessels;
the performance of the Helios Pool, including the failure of its significant customers to perform their
obligations and the loss or reduction in business from its significant customers (or if the same were to occur
with respect to our significant customers);
the availability of (and our ability to obtain such) financing and refinancing to fund capital expenditures,
acquisitions and other general corporate purposes, the terms of such financing and our ability to comply with
the restrictions and other covenants set forth in our existing and future debt agreements and financing
arrangements (and to repay or refinance our existing debt and settling of interest rate swaps, if any);
our costs, including crew wages, insurance, provisions, repairs and maintenance, general and administrative
expenses, drydocking, and bunker prices, as applicable;
any inability to retain and recruit qualified key executives, key employees, key consultants or skilled workers
and, relatedly, our dependence on key personnel and the availability of skilled workers and the related labor
costs;
the potential difference in interests between or among certain of our directors, officers, key executives and
shareholders;
quality and efficiency requirements from customers and developments regarding the technologies relating to
oil exploration and the effects of new products and new technology in our industry, including with respect to
equipment propulsion and overall vessel efficiency;
potential changes in regulation that would require the installation of Engine Power Limitation (EPL) systems
on our vessels to reduce fuel use and carbon emissions, and increase the level of energy efficiency;
operating hazards in the maritime transportation industry, including accidents, political events, public health
threats (including the outbreak of communicable diseases), international hostilities and instability, armed
conflict, piracy, attacks on vessels or other petroleum-related infrastructures and acts by terrorists, which may
cause potential disruption of shipping routes;
the length and severity of the ongoing coronavirus outbreak (COVID-19), including its impact on the demand
for commercial seaborne transportation of LPG and the condition of financial markets and the potential knock-
on impacts to our global operations;
the adequacy of our insurance coverage in the event of a catastrophic event;
the failure to protect our information systems against security breaches, or the failure or unavailability of these
systems for a significant period;
the arresting or attachment of one or more of our vessels by maritime claimants;
compliance with and changes to governmental, tax, environmental and safety laws and regulations, which may
add to our costs or the costs of our customers;
fluctuations in currencies and interest rates and the impact of the discontinuance of the London Interbank
Offered Rate, or LIBOR, after 2021 on any of our debt referencing LIBOR in the interest rate;
compliance with the United States Foreign Corrupt Practices Act of 1977, the United Kingdom Bribery
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Act 2010, or other applicable regulations relating to bribery;
the volatility of the price of shares of our common stock (our “common shares”) and future sales of our
common shares;
our incorporation under the laws of the Republic of the Marshall Islands and the different rights to relief that
may be available compared to other countries, including the United States;
congestion at or blockages of ports or canals;
if we are required to pay tax on U.S. source income;
if we are treated as a “passive foreign investment company”; and
other factors detailed in this report and from time to time in our periodic reports.
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Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of
the underlying assumptions or expectations proves to be inaccurate or is not realized. You should thoroughly read this report with
the understanding that our actual future results may be materially different from and worse than what we expect. Other sections
of this report include additional factors that could adversely impact our business and financial performance. Moreover, we
operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our
management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent
to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-
looking statements. We qualify all of the forward-looking statements by these cautionary statements.
We caution readers of this report not to place undue reliance on forward-looking statements. Any forward-looking
statements contained herein are made only as of the date of this report, and we undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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ITEM 1. BUSINESS
PART I
Unless otherwise indicated, references to "Dorian," the "Company," "we," "our," "us," or similar terms refer to Dorian
LPG Ltd. and its subsidiaries and predecessors. The terms "Predecessor" and "Predecessor Business" refer to the owning
companies of the four vessels that comprised our initial fleet, prior to their acquisition by us. We use the term "VLGC" to refer to
very large gas carriers. We use the term "LPG" to refer to liquefied petroleum gas and we use the term "cbm" to refer to cubic
meters in describing the carrying capacity of our vessels. Unless otherwise indicated, all references to "U.S. dollars," "USD,"
and "$" in this report are to the lawful currency of the United States of America and references to "Norwegian Krone" and
"NOK" are to the lawful currency of Norway.
Overview
Dorian was incorporated on July 1, 2013 under the laws of the Republic of the Marshall Islands, is headquartered in the
United States and is engaged in the transportation of LPG. Specifically, Dorian and its subsidiaries are focused on owning and
operating VLGCs in the LPG shipping industry. Our founding executives have managed vessels in the LPG shipping market
since 2002. Our fleet currently consists of twenty-three VLGCs, including our nineteen new fuel-efficient 84,000 cbm ECO-
design VLGCs, or our ECO VLGCs, three 82,000 cbm VLGCs, and one time chartered-in VLGC. The twenty-two VLGCs in our
fleet, excluding the time chartered-in vessel, have an aggregate carrying capacity of approximately 1.8 million cbm and an
average age of 7.2 years as of June 1, 2021. Ten of our technically-managed ECO VLGCs are fitted with exhaust gas cleaning
systems (commonly referred to as “scrubbers”) to reduce sulfur emissions and another two of our ECO VLGCs are expected to
be scrubber-fitted during the second calendar quarter of 2021. We provide in-house commercial and technical management
services for all of our vessels, including our vessels deployed in the Helios Pool, which may also receive commercial
management services from Phoenix (defined below). Excluding our time chartered-in vessels, we provide in-house technical
management services for all of our vessels, including our vessels deployed in the Helios Pool. On March 31, 2021, we entered
into a thirteen-year bareboat agreement to charter-in a newbuilding dual-fuel VLGC that is expected to be delivered in March
2023 (see Note 18 to our consolidated financial statements for further details).
On April 1, 2015, we and Phoenix Tankers Pte. Ltd., or Phoenix, a wholly-owned subsidiary of Mitsui OSK Lines Ltd.,
an unaffiliated third party, began operation of Helios LPG Pool LLC, or the Helios Pool, a joint venture owned 50% by us and
50% by Phoenix. We believe that the operation of certain of our VLGCs in this pool allows us to achieve better market coverage
and utilization. Vessels entered into the Helios Pool are commercially managed jointly by Dorian LPG (UK) Ltd., our wholly-
owned subsidiary, and Phoenix. The members of the Helios Pool share in the net pool revenues generated by the entire group of
vessels participating in the pool, weighted according to certain technical vessel characteristics, and net pool revenues are
distributed as variable rate time charter hire to each participant. The vessels entered into the Helios Pool may operate either in the
spot market, pursuant to contracts of affreightment, or COAs, or on time charters of two years' duration or less. We and Phoenix
have agreed that the Helios Pool will have a right of first refusal to undertake any time charter with an original duration greater
than two years. As of June 1, 2021, the Helios Pool operated twenty-nine VLGCs, including twenty-one vessels from our fleet,
four Phoenix vessels, and four vessels from other participants.
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Our Fleet
The following table sets forth certain information regarding our fleet as of June 1, 2021:
Shipyard
Year Built
ECO
Vessel(1)
Scrubber
Equipped
Employment
Charter
Expiration(2)
Dorian VLGCs
Captain Markos NL
Captain John NP(3)
Captain Nicholas ML(3)
Comet
Corsair(3)
Corvette(3)
Cougar
Concorde(3)
Cobra
Continental
Constitution
Commodore
Cresques(3)
Constellation
Cheyenne
Clermont
Cratis
Chaparral
Copernicus
Commander
Challenger
Caravelle
Total
Capacity
(Cbm)
82,000
82,000
82,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
1,842,000
Hyundai
Hyundai
Hyundai
Hyundai
Hyundai
Hyundai
Hyundai
Hyundai
Hyundai
Hyundai
Hyundai
Hyundai
Daewoo
Hyundai
Hyundai
Hyundai
Daewoo
Hyundai
Daewoo
Hyundai
Hyundai
Hyundai
2006
2007
2008
2014
2014
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2016
—
—
—
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Time chartered-in VLGCs
Future Diamond(8)
80,876
Hyundai
2020
X
—
—
—
X
X
X
—
X
—
—
X
—
X
X
X
—
X
—
X
—
—
—
X
Pool(4)
Pool(4)
Pool-TCO(5)
Pool(4)
Time Charter(6)
Pool(4)
Pool-TCO(5)
Time Charter(7)
Pool-TCO(5)
Pool(4)
Pool(4)
Pool-TCO(5)
Pool(4)
Pool(4)
Pool(4)
Pool(4)
Pool(4)
Pool(4)
Pool(4)
Pool(4)
Pool-TCO(5)
Pool-TCO(5)
—
—
Q4 2021
—
Q4 2022
—
Q4 2021
Q1 2022
Q3 2022
—
—
Q1 2023
—
—
—
—
—
—
—
—
Q4 2022
Q1 2022
Pool(4)
—
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Represents vessels with very low revolutions per minute, long‑stroke, electronically controlled engines, larger propellers, advanced hull
design, and low friction paint.
Represents calendar year quarters.
Operated pursuant to a bareboat chartering agreement. See Notes 9 and 23 and to our consolidated financial statements included herein.
“Pool” indicates that the vessel operates in the Helios Pool on a voyage charter with a third party and we receive a portion of the pool profits
calculated according to a formula based on the vessel’s pro rata performance in the pool.
“Pool-TCO” indicates that the vessel is operated in the Helios Pool on a time charter out to a third party and we receive a portion of the pool
profits calculated according to a formula based on the vessel’s pro rata performance in the pool.
Currently on a time charter with an oil major that began in November 2019.
Currently on time charter with a major oil company that began in March 2019.
Currently time chartered-in to our fleet with an expiration during the first calendar quarter of 2023.
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The LPG Shipping Industry
International seaborne LPG transportation services are generally provided by two types of operators: LPG distributors
and traders and independent shipowners. Traditionally the main trading route in our industry has been the transport of LPG from
the Arabian Gulf to Asia. With the emergence of the United States as a major LPG export hub, the United States Gulf to Asia and
United States to Europe have become important trade routes. Vessels are generally operated under time charters, bareboat
charters, spot charters, or COAs. LPG distributors and traders use their fleets not only to transport their own LPG, but also to
transport LPG for third-party charterers in direct competition with independent owners and operators in the tanker charter market.
We operate in markets that are highly competitive and based primarily on supply and demand of available vessels. Generally, we
compete for charters based upon charter rate, customer relationships, operating expertise, professional reputation and vessel
specifications (size, age and condition). We also believe that our in-house technical and commercial management allows us to
provide superior customer service and reliability that enhances our relationships with our charterers. Our industry is subject to
strict environmental regulation, including the treatment of ballast water and greenhouse gas emissions regulations, and we believe
our modern, ECO-class fleet and our high level of crew training and vessel maintenance make us a preferred provider of VLGC
tonnage. For more information with respect to the aforementioned environmental regulations, please see Item 1. Business—
Environmental and Other Regulation in the Shipping Industry.
Our Customers
Our customers, either directly or through the Helios Pool, include or have included global energy companies such as
Exxon Mobil Corp., Chevron Corp., China International United Petroleum & Chemicals Co., Ltd., Royal Dutch Shell plc,
Equinor ASA, Total S.A., and Sunoco LP, commodity traders such as Glencore plc, Itochu Corporation, Bayegan Group and the
Vitol Group and importers such as E1 Corp., Indian Oil Corporation, SK Gas Co. Ltd. Astomos Energy Corporation, and Oriental
Energy Company Ltd. or subsidiaries of the foregoing. See “Item 7. Management Discussion and Analysis—Overview” for a
discussion of our customers that accounted for more than 10% of our total revenues and “Item 1A. Risk Factors—We expect to
be dependent on a limited number of customers for a material part of our revenues, and failure of such customers to meet their
obligations could cause us to suffer losses or negatively impact our results of operations and cash flows.” For the years ended
March 31, 2021, 2020 and 2019 approximately 92.6%, 89.4% and 75.9% of our revenues, respectively, were generated through
the Helios Pool as net pool revenues—related party. See “Item 1A. Risk Factors—We and the Helios Pool operate exclusively in
the LPG shipping industry. Due to the general lack of industry diversification, adverse developments in the LPG shipping
industry may adversely affect our business, financial condition and operating results.”
We intend to continue to pursue a balanced chartering strategy by employing our vessels on a mix of multi-year time
charters, some of which may include a profit-sharing component, shorter-term time charters, spot market voyages and COAs.
Two of our vessels are currently on fixed time charters outside of the Helios Pool with an average remaining term of 1.0 year as
of June 1, 2021, and six of our VLGCs are on Pool-TCO within the Helios Pool. See “Our Fleet” above for more information.
Further, each of our vessels serves the same type of customer, has similar operations and maintenance requirements, and
operates in the same regulatory environment. Based on this, we have determined that we operate in one reportable segment, the
international transportation of LPG. Furthermore, when we charter a vessel to a charterer, the charterer is free to trade the vessel
worldwide (subject to applicable laws and sanctions regimes) and, as a result, the disclosure of geographic information is
impracticable.
Competition
LPG carrier capacity is primarily a function of the size of the existing world fleet, the number of newbuildings being
delivered and the scrapping of older vessels. According to industry sources, as of May 25, 2021, there were 1,497 LPG capable
carriers with an aggregate capacity of approximately 38.2 million cbm. As of such date, a further 137 LPG capable carriers with
an aggregate carrying capacity of roughly 8.0 million cbm were on order for delivery by the end of 2023, equivalent to 20.9% of
the existing fleet in capacity terms. In contrast to oil tankers and drybulk carriers, according
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to industry sources, the number of shipyards with LPG carrier experience is extremely limited. In the VLGC sector in which we
operate, as of May 25, 2021, there were 309 vessels with an aggregate carrying capacity of 25.4 million cbm in the world fleet
and 63 vessels with 5.6 million cbm of capacity on order for delivery by the end of 2023.
Our largest competitors for VLGC shipping services include BW LPG Ltd., or BWLPG; Avance Gas Holding Ltd., or
Avance; Petredec Pte. Ltd., or Petredec; and Astomos Energy Corporation. According to industry sources, there were
approximately 74 owners in the worldwide VLGC fleet as of May 25, 2021, with the top ten owners possessing 49% of the total
fleet on a vessel count basis. Competition for the transportation of LPG depends on the price, location, size, age, condition and
acceptability of the vessel to the charterer. We believe we own and operate the youngest and second largest fleet in the VLGC
size segment, which, in our view, enhances our position relative to that of our competitors. Our 22 VLGCs (excluding the one
time chartered-in vessel) have an average age of 7.2 years compared to the global VLGC fleet’s average age of 10.3 years. Refer
to “Item 1A. Risk Factors—We face substantial competition in trying to expand relationships with existing customers and obtain
new customers.”
Seasonality
Liquefied gases are primarily used for industrial and domestic heating, as chemical and refinery feedstock, as
transportation fuel and in agriculture. The LPG shipping market historically has been stronger in the spring and summer months
in anticipation of increased consumption of propane and butane for heating during the winter months. In addition, unpredictable
weather patterns in these months tend to disrupt vessel scheduling and the supply of certain commodities. Demand for our vessels
therefore may be stronger in our quarters ending June 30 and September 30 and relatively weaker during our quarters ending
December 31 and March 31, although 12-month time charter rates tend to smooth out these short-term fluctuations and recent
LPG shipping market activity has not yielded the expected seasonal results. To the extent any of our time charters expire during
the typically weaker fiscal quarters ending December 31 and March 31, it may not be possible to re-charter our vessels at similar
rates. As a result, we may have to accept lower rates or experience off-hire time for our vessels, which may adversely impact our
business, financial condition and operating results.
Human Capital
As of March 31, 2021, we employed 83 persons in our offices in the United States, Greece, Denmark and the United
Kingdom. In addition to our shore-based employees, we had approximately 519 seafaring staff serving on our commercially-
managed vessels. Seafarers are sourced from seafarer recruitment and placement service agencies and are employed with short-
term employment contracts.
We recognize that the success of our Company is dependent upon the talents and dedication of our staff, and we are
committed to investing in their success. We focus on attracting, developing and retaining a team of highly talented and motivated
individuals. We conduct periodic assessments of our pay and benefit practices to help ensure that staff members are compensated
fairly and competitively. The Company provides competitive compensation and benefits. In addition to salaries for our shore-
based employees, our compensation programs typically include annual bonuses, stock-based compensation awards, company-
sponsored retirement savings plans with employer matching opportunities, healthcare and insurance benefits, flexible spending
accounts, life insurance, paid time off, family leave, and employee assistance programs.
The health and safety of our staff is of paramount importance to us. With the onset of the COVID-19 pandemic in early
2020, we immediately responded by prioritizing the safety and well-being of our staff by implementing several changes to
enhance COVID-19 safety and mitigate related health risks on our vessels. For the Company’s non-vessel locations and
operations, we implemented various health and safety measures including COVID-19 case tracking and quarantining where and
when necessary, daily temperature checks, protective equipment, regular office sanitizing, widely distributing hand-sanitizer,
reconfiguring workstations to allow for appropriate distancing, and implementing remote work policies, among other things.
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We support meaningful learning and development opportunities. We have formal and informal training programs
available and offer reimbursement for qualified workshops, conferences, forums and classes.
By honoring the dignity of each person, we foster a culture of inclusion where everyone is welcome. We do this by
embracing diverse voices and experiences, supporting programs and resources that build an authentic and respectful workplace,
and providing fair and equitable opportunities for each person to contribute meaningfully. We believe our workforce needs to be
diverse, which, in turn, enables us to innovate, collaborate and better deliver to our customers.
Classification, Inspection and Maintenance
Every large commercial seagoing vessel must be "classed" by a classification society. A classification society certifies
that a vessel is "in class," signifying that the vessel has been built and maintained in accordance with the rules of the
classification society and the vessel's country of registry and the international conventions of which that country is a member. In
addition, where surveys are required by international conventions and corresponding laws and ordinances of a flag state, the
classification society will undertake them on application or by official order, acting on behalf of the authorities concerned.
For maintenance of the class certificate, regular and special surveys of hull, machinery, including the electrical plant and
any special equipment classed, are required to be performed by the classification society, to ensure continuing compliance. The
classification societies provide guidelines applicable to LPG vessels relating to extended intervals for drydocking. Every vessel is
required to be drydocked every 30 to 36 months for inspection of the underwater parts of the vessel. However, for vessels not
exceeding 15 years that have means to facilitate underwater inspection in lieu of drydocking, the drydocking can be skipped and
be conducted concurrently with the special survey. Certain cargo vessels that meet the system requirements set by classification
societies may qualify for extended drydocking, which extends the 5-year period to 7.5 years, by replacing certain dry-dockings
with in-water surveys. If any defects are found, the classification surveyor will issue a "recommendation" which must be rectified
by the shipowner within prescribed time limits. The classification society also undertakes on request of the flag state other
surveys and checks that are required by the regulations and requirements of that flag state. These surveys are subject to
agreements made in each individual case and/or to the regulations of the country concerned. If any vessel does not maintain its
class and/or fails any annual survey, intermediate survey, drydocking or special survey, the vessel will be unable to carry cargo
between ports and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our loan
agreements and financing arrangements. Any such inability to carry cargo or be employed, or any such violation of covenants,
could have a material adverse impact on our financial condition and results of operations.
Most insurance underwriters make it a condition for insurance coverage and lending that a vessel be certified as "in
class" by a classification society, which is a member of the International Association of Classification Societies, or the IACS. In
December 2013, the IACS adopted harmonized Common Structure Rules, or “the Rules,” that align with International Maritime
Organization, the United Nations agency for maritime safety and the prevention of pollution by vessels, or the IMO, goal
standards and apply to oil tankers and bulk carriers contracted for construction on or after July 1, 2015. The Rules attempt to
create a level of consistency between IACS Societies. Our VLGCs are currently classed with either Lloyd's Register, the
American Bureau of Shipping, or ABS, or Det Norske Veritas, all members of the IACS. All of the vessels in our fleet have been
awarded International Safety Management, or ISM, certification and are currently "in class."
We also carry out inspections of the ships, including with a view towards compliance under the Ship Inspection Report
Programme (“SIRE”) and United States Coast Guard (“USCG”) requirements, as applicable, on a regular basis; both at sea and
while the vessels are in port. The results of these inspections are documented in a report containing recommendations for
improvements to the overall condition of the vessel, maintenance, safety and crew welfare. Based in part on these evaluations, we
create and implement a program of continual maintenance and improvement for our vessels and their systems.
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Safety, Management of Ship Operations and Administration
Safety is our top operational priority. Our vessels are operated in a manner intended to protect the safety and health of
the crew, the general public and the environment. We actively manage the risks inherent in our business and are committed to
preventing incidents that threaten safety, such as groundings, fires and collisions. We are also committed to reducing emissions
and waste generation. We have established key performance indicators to facilitate regular monitoring of our operational
performance. We set targets on an annual basis to drive continuous improvement, and we review performance indicators every
three months to determine if remedial action is necessary to reach our targets. Our shore staff performs a full range of technical,
commercial and business development services for us. This staff also provides administrative support to our operations in
finance, accounting and human resources.
Risk of Loss and Insurance
The operation of any vessel, including LPG carriers, has inherent risks. These risks include mechanical failure, personal
injury, crew negligence, human error, collision, property loss, vessel or cargo loss or damage and business interruption due to
political circumstances in foreign countries, hostilities or piracy. In addition, there is always an inherent possibility of marine
disaster, including explosions, spills and other environmental mishaps, and the liabilities arising from owning and operating
vessels in international trade. OPA, which imposes virtually unlimited liability upon shipowners, operators and bareboat
charterers of any vessel trading in the exclusive economic zone of the United States for certain oil pollution accidents in the
United States, has made liability insurance more expensive for shipowners and operators trading in the United States market. We
believe that our present insurance coverage is adequate to protect us against the accident related risks involved in the conduct of
our business and that we maintain appropriate levels of environmental damage and pollution insurance coverage consistent with
standard industry practice. Additionally, we maintain other insurance policies we believe are customary and are in amounts we
believe to be adequate to protect us against material loss. The policies principally provide coverage for public liability, directors
and officers, workers’ compensation, and insurance against the consequences of a cyber attack. However, not all risks can be
insured, and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate
insurance coverage at reasonable rates.
We have obtained hull and machinery insurance on all our vessels against marine and war risks, which include the risks
of damage to our vessels, salvage or towing costs, and actual or constructive total loss. However, our insurance policies contain
deductible amounts for which we are responsible. We have also arranged additional total loss coverage for each vessel. This
coverage, which is called hull interest and freight interest coverage, provides us additional coverage in the event of the total loss
of a vessel.
We have also obtained loss of hire insurance to protect us against loss of income in the event one of our vessels cannot
be employed due to damage that is covered under the terms of our hull and machinery insurance (marine and war risks). Under
our loss of hire policies, our insurer will pay us an agreed daily rate in respect of each VLGC in excess of 14 days for marine
risks and 7 days for war risks for the time that the vessel is out of service as a result of damage, for a maximum of 180 days.
We have also obtained protection and indemnity insurance, which covers our third-party legal liabilities in connection
with our shipping activities, and is provided by mutual protection and indemnity associations, or P&I clubs. This insurance
includes third-party liability and other expenses related to the injury or death of crew members, passengers and other third parties,
loss or damage to cargo, claims arising from collisions with other vessels or from contact with jetties or wharves and other
damage to other third-party property, including pollution arising from oil or other substances, and other related costs, including
wreck removal. Subject to the capping discussed below, our coverage, except for pollution, is unlimited.
Our current protection and indemnity insurance coverage for pollution is $1.0 billion per vessel per incident. The
thirteen P&I clubs that comprise the International Group of Protection and Indemnity Clubs, or the International Group, insure
approximately 90% of the world's commercial tonnage and have entered into a pooling agreement to reinsure each association's
liabilities. Each P&I club has capped its exposure in this pooling agreement so that the maximum claim covered by the pool and
its reinsurance would be approximately $8.8 billion per accident or occurrence. We are a member of three P&I clubs: The
Standard Club Ireland DAC, The United Kingdom Mutual Steamship Assurance Association
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Limited and The London Steam‑Ship Owners' Mutual Insurance Association Limited. As a member of these P&I clubs, we are
subject to a call for additional premiums based on the clubs' claims record, as well as the claims record of all other members of
the P&I clubs comprising the International Group. However, our P&I clubs have reinsured the risk of additional premium calls to
limit our additional exposure. This reinsurance is subject to a cap, and there is the risk that the full amount of the additional call
would not be covered by this reinsurance.
Our Environmental, Social and Governance Efforts
As one of the leaders in the international transportation of LPG, we are committed to delivering cleaner-burning energy
in a safe, reliable and environmentally efficient manner. LPG is a clean, efficient and readily available source of energy, with
positive benefits to the environment relative to other fuels. While extending the economic and social benefits of delivering LPG
to consumers across the globe, we recognize that the shipping industry is heavily dependent on the burning of fossil fuels,
contributing to the warming of the world’s climate system. In providing our services, we are committed to reducing our carbon
footprint and greenhouse gas emissions. We welcome and support efforts to increase transparency and to promote investors’
understanding of how we and our industry peers are addressing the climate change-related risks and opportunities. We have
disclosed certain environmental, social and governance (ESG)-related information on our website, including our first ESG
Report, aligned with the Sustainability Accounting Standards Board (SASB) Marine Transportation standard, additionally taking
into account recommendations provided by the Taskforce on Climate-Related Financial Disclosures (TCFD). The report includes
information on how we monitor, manage and perform on material ESG issues in the face of increasing expectations and
regulations.
Dorian’s ESG strategies, risks and initiatives are overseen by our Board of Directors, which includes independent
members and experts in shipping and compliance matters. Our Nominating and Corporate Governance Committee monitors
progress of ESG efforts and together with management ensures integrity of reporting. The Company’s executive leadership team,
led by our Chief Executive Officer, President and Chairman of the Board of Directors, Mr. John C. Hadjipateras, formulates ESG
strategies and drives initiatives, while the members of our management set targets, assesses risks, develops policies and
procedures and executes the ESG efforts. Some of the ESG initiatives that we have undertaken include:
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operating newer, more technologically advanced ECO vessels, with very low revolutions per minute, long-stroke,
electronically controlled engines, larger propellers, advanced hull design, and low friction paint, resulting in enhanced
the energy efficiency and reduced greenhouse gas emissions on a ton-mile basis, including the vessels in our existing
fleet and our newbuilding dual-fuel VLGC that is expected to be delivered from Kawasaki Heavy Industries in March
2023;
fitting vessels with exhaust gas cleaning systems, scrubbers, to reduce sulfur emissions to, among other things, comply
with the IMO’s new fuel regulations which went into effect in January 2020;
joining the Getting to Zero Coalition, a global alliance of more than 140 companies committed to the decarbonization of
deepsea shipping in line with the IMO greenhouse gas emissions reduction strategy;
implementing and utilizing internal and third-party data collection and analysis software, which allows data to be
gathered from our vessels for use in performance optimization, with the aim of reducing our fuel consumption, and
carbon dioxide and greenhouse gas emissions;
including a sustainability-linked pricing mechanism in our 2015 AR Facility (as defined below) and providing relevant
carbon emissions data for the vessels in our fleet that are owned or technically managed pursuant to a bareboat charter to
our lenders in connection with the Poseidon Principles, which establish a framework for assessing and disclosing the
climate alignment of ship finance portfolios with the IMO’s target to reduce shipping's total annual greenhouse gas
emissions by at least 50% by 2050;
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becoming a signatory to the Neptune Declaration on Seafarer Wellbeing and Crew Change, in a worldwide call to action
to end the unprecedented crew change crisis caused by COVID-19;
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establishing risk management and internal control policies and systems to manage risk and ensure compliance with all
applicable international and local laws; and
establishing compliance programs to meet or exceed, when possible and appropriate, all applicable rules and regulations
governing the maritime industry, including the items described in the “Environmental and Other Regulation in the
Shipping Industry” section below.
Environmental and Other Regulation in the Shipping Industry
General
Government regulation and laws significantly affect the ownership and operation of our fleet. We are subject to
international conventions and treaties, national, state and local laws and regulations in force in the countries in which our vessels
may operate or are registered relating to safety and health and environmental protection including the storage, handling, emission,
transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for
damage to natural resources. Compliance with such laws, regulations and other requirements entails significant expense,
including vessel modifications and implementation of certain operating procedures.
A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These
entities include the local port authorities (applicable national authorities such as the USCG, harbor master or equivalent),
classification societies, flag state administrations (countries of registry) and charterers, particularly terminal operators. Certain of
these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure to
maintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of the
operation of one or more of our vessels.
Increasing environmental concerns have created a demand for vessels that conform to stricter environmental standards.
We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance,
continuous training of our officers and crews and compliance with United States and international regulations. We believe that
the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels
have all material permits, licenses, certificates or other authorizations necessary for the conduct of our operations. However,
because such laws and regulations frequently change and may impose increasingly stricter requirements, we cannot predict the
ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our
vessels. In addition, a future serious marine incident that causes significant adverse environmental impact could result in
additional legislation or regulation that could negatively affect our profitability.
International Maritime Organization
The International Maritime Organization, the United Nations agency for maritime safety and the prevention of pollution
by vessels (the “IMO”), has adopted the International Convention for the Prevention of Pollution from Ships, 1973, as modified
by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as “MARPOL,” the International
Convention for the Safety of Life at Sea of 1974 (“SOLAS Convention”), and the International Convention on Load Lines of
1966 (the “LL Convention”). MARPOL establishes environmental standards relating to oil leakage or spilling, garbage
management, sewage, air emissions, handling and disposal of noxious liquids and the handling of harmful substances in packaged
forms. MARPOL is applicable to LPG carriers as well as other vessels, and is broken into six Annexes, each of which regulates a
different source of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried in
bulk in liquid or in packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and
Annex VI, lastly, relates to air emissions. Annex VI was separately adopted by the IMO in September of 1997; new emissions
standards, titled IMO-2020, took effect on January 1, 2020.
Vessels that transport gas, including LPG carriers, are also subject to regulation under the International Code for the
Construction and Equipment of Ships Carrying Liquefied Gases in Bulk, or the “IGC Code,” published by the IMO.
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The IGC Code provides a standard for the safe carriage of LPG and certain other liquid gases by prescribing the design and
construction standards of vessels involved in such carriage. The completely revised and updated IGC Code entered into force in
2016, and the amendments were developed following a comprehensive five-year review and are intended to take into account the
latest advances in science and technology. Compliance with the IGC Code must be evidenced by a Certificate of Fitness for the
Carriage of Liquefied Gases in Bulk. Non-compliance with the IGC Code or other applicable IMO regulations may subject a
shipowner or a bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels
and may result in the denial of access to, or detention in, some ports. We believe that each of our vessels is in compliance with
the IGC Code.
Our LPG vessels may also become subject to the 2010 HNS Convention, if it is entered into force. The Convention
creates a regime of liability and compensation for damage from hazardous and noxious substances (“HNS”), including liquefied
gases. The 2010 HNS Convention establishes that the polluter pays by ensuring that the shipping and HNS industries provide
compensation for those who have suffered loss or damage resulting from an HNS incident. The following types of damage will
be covered by the 2010 HNS Convention: loss of life or personal injury on board or outside the ship carrying the HNS; loss of or
damage to property outside the ship; economic losses resulting from contamination, e.g. in the fishing, mariculture and tourism
sectors; costs of preventive measures, e.g. clean-up operations at sea and onshore; and costs of reasonable measures of
reinstatement of the environment. Shipowners will be held strictly liable up to a maximum limit of liability for the cost of an
HNS incident and are required to have insurance that is State certified. The 2010 HNS Convention sets up a two-tier system of
compensation composed of compulsory insurance taken out by shipowners and an HNS Fund which comes into play when the
insurance is insufficient to satisfy a claim or does not cover the incident. Under the 2010 HNS Convention, if damage is caused
by bulk HNS, claims for compensation will first be sought from the shipowner up to a maximum of 100 million Special Drawing
Rights (“SDR”). If the damage is caused by packaged HNS or by both bulk and packaged HNS, the maximum liability is 115
million SDR. Once the limit is reached, compensation will be paid from the HNS Fund up to a maximum of 250 million SDR.
The 2010 HNS Convention will enter into force 18 months after the date on which it is ratified by at least twelve States, four of
which must each have a merchant have a merchant shipping fleet of no less than 2 million units of gross tonnage. To date, five
states (South Africa, Canada, Denmark, Norway and Turkey) have ratified and consented to be bound by the 2010 HNS
Convention. Although the 2010 HNS Convention has not been ratified by a sufficient number of countries to enter into force, we
cannot estimate the costs that may be needed to comply with any such requirements that may be adopted with any certainty at this
time.
In June 2015 the IMO formally adopted the International Code of Safety for Ships using Gases or Low flashpoint Fuels,
or the “IGF Code,” which is designed to minimize the risks involved with ships using low flashpoint fuels. The IGF Code will be
mandatory under SOLAS through the adopted amendments. The IGF Code and the amendments to SOLAS became effective
January 1, 2017.
Air Emissions
In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution from vessels. Effective May
2005, Annex VI sets limits on sulfur oxide and nitrogen oxide emissions from all commercial vessel exhausts and prohibits
“deliberate emissions” of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatile compounds
from cargo tanks and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content
of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions, as explained below.
Emissions of “volatile organic compounds” from certain vessels, and the shipboard incineration (from incinerators installed after
January 1, 2000) of certain substances (such as polychlorinated biphenyls, or “PCBs”) are also prohibited. We believe that all our
vessels are currently compliant in all material respects with these regulations.
The Marine Environment Protection Committee, or “MEPC,” adopted amendments to Annex VI regarding emissions of
sulfur oxide, nitrogen oxide, particulate matter and ozone depleting substances, which entered into force on July 1, 2010. The
amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the
amount of sulfur contained in any fuel oil used on board ships. On October 27, 2016, at its 70th session, the MEPC agreed to
implement a global 0.5% m/m sulfur oxide emissions limit (reduced from 3.50%) starting from January 1, 2020 (the “IMO 2020
Cap”). This limitation can be met by using low-sulfur compliant fuel oil, alternative fuels or certain exhaust gas cleaning systems.
Ships are now required to obtain bunker delivery notes and
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International Air Pollution Prevention (“IAPP”) Certificates from their flag states that specify sulfur content. Additionally, at
MEPC 73, amendments to Annex VI to prohibit the carriage of bunkers above 0.5% sulfur on ships were adopted and took effect
March 1, 2020. These regulations subject ocean-going vessels to stringent emissions controls, and may cause us to incur
substantial costs.
Sulfur content standards are even stricter within certain “Emission Control Areas,” or (“ECAs”). As of January 1, 2015,
ships operating within an ECA were not permitted to use fuel with sulfur content in excess of 0.1% m/m. Amended Annex VI
establishes procedures for designating new ECAs. Currently, the IMO has designated four ECAs, including specified portions of
the Baltic Sea area, North Sea area, North American area and United States Caribbean area. Ocean-going vessels in these areas
will be subject to stringent emission controls and may cause us to incur additional costs. Other areas in China are subject to local
regulations that impose stricter emission controls. If other ECAs are approved by the IMO, or other new or more stringent
requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the U.S.
Environmental Protection Agency (“EPA”) or the states where we operate, compliance with these regulations could entail
significant capital expenditures or otherwise increase the costs of our operations.
Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for marine diesel engines,
depending on their date of installation. At the MEPC meeting held from March to April 2014, amendments to Annex VI were
adopted which address the date on which Tier III Nitrogen Oxide (NOx) standards in ECAs will go into effect. Under the
amendments, Tier III NOx standards apply to ships that operate in the North American and U.S. Caribbean Sea ECAs designed
for the control of NOx produced by vessels with a marine diesel engine installed and constructed on or after January 1, 2016. Tier
III requirements could apply to areas that will be designated for Tier III NOx in the future. At MEPC 70 and MEPC 71, the
MEPC approved the North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built on or after January 1, 2021. The EPA
promulgated equivalent (and in some senses stricter) emissions standards in 2010. As a result of these designations or similar
future designations, we may be required to incur additional operating or other costs.
As determined at the MEPC 70, the new Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018
and requires ships above 5,000 gross tonnage to collect and report annual data on fuel oil consumption to an IMO database, with
the first year of data collection having commenced on January 1, 2019. The IMO intends to use such data as the first step in its
roadmap (through 2023) for developing its strategy to reduce greenhouse gas emissions from ships, as discussed further below.
As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. All ships are
now required to develop and implement Ship Energy Efficiency Management Plans (“SEEMPS”), and new ships must be
designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy Efficiency Design
Index (“EEDI”). Under these measures, by 2025, all new ships built will be 30% more energy efficient than those built in 2014.
Additionally, MEPC 75 adopted amendments to MARPOL Annex VI which brings forward the effective date of the EEDI’s
“phase 3” requirements from January 1, 2025 to April 1, 2022 for several ship types, including gas carriers, general cargo ships,
and LNG carriers.
Additionally, MEPC 75 introduced draft amendments to Annex VI which impose new regulations to reduce greenhouse
gas emissions from ships. These amendments introduce requirements to assess and measure the energy efficiency of all ships and
set the required attainment values, with the goal of reducing the carbon intensity of international shipping. The requirements
include (1) a technical requirement to reduce carbon intensity based on a new Energy Efficiency Existing Ship Index (“EEXI”),
and (2) operational carbon intensity reduction requirements, based on a new operational carbon intensity indicator (“CII”). The
attained EEXI is required to be calculated for ships of 400 gross tonnage and above, in accordance with different values set for
ship types and categories. With respect to the CII, the draft amendments would require ships of 5,000 gross tonnage to document
and verify their actual annual operational CII achieved against a determined required annual operational CII. Additionally, MEPC
75 proposed draft amendments requiring that, on or before January 1, 2023, all ships above 400 gross tonnage must have an
approved SEEMP on board. For ships above 5,000 gross tonnage, the SEEMP would need to include certain mandatory content.
The draft amendments introduced at MEPC 75 may be adopted at the MEPC 76 session, to be held during 2021.
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We may incur significant costs to comply with these revised standards, including the need to modify our vessels or
engines to consume alternative fuels. Additional or new conventions, laws and regulations may be adopted that could require the
installation of expensive emission control systems or engine power limitation (EPL) systems to reduce fuel use and carbon
emissions, each of which could adversely affect our business, results of operations, cash flows and financial condition.
Safety Management System Requirements
The SOLAS Convention was amended to address the safe manning of vessels and emergency training drills. The
Convention of Limitation of Liability for Maritime Claims (the “LLMC”) sets limitations of liability for a loss of life or personal
injury claim or a property claim against ship owners. We believe that our vessels are in substantial compliance with SOLAS and
LLMC standards.
Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of
Ships and for Pollution Prevention (the “ISM Code”), our operations are also subject to environmental standards and
requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safety management
system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions
and procedures for operating its vessels safely and describing procedures for responding to emergencies. We rely upon the safety
management system that we and our technical management team have developed for compliance with the ISM Code. The failure
of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease
available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.
The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This
certificate evidences compliance by a vessel’s management with the ISM Code requirements for a safety management system. No
vessel can obtain a safety management certificate unless its manager has been awarded a document of compliance, issued by each
flag state, under the ISM Code. We have obtained applicable documents of compliance for our offices and safety management
certificates for all of our vessels for which the certificates are required by the IMO. The documents of compliance and safety
management certificates are renewed as required.
Regulation II-1/3-10 of the SOLAS Convention governs ship construction and stipulates that ships over 150 meters in
length must have adequate strength, integrity and stability to minimize risk of loss or pollution. Goal-based standards
amendments in SOLAS regulation II-1/3-10 entered into force in 2012, with July 1, 2016 set for application to new oil tankers
and bulk carriers. The SOLAS Convention regulation II-1/3-10 on goal-based ship construction standards for bulk carriers and oil
tankers, which entered into force on January 1, 2012, requires that all oil tankers and bulk carriers of 150 meters in length and
above, for which the building contract is placed on or after July 1, 2016, satisfy applicable structural requirements conforming to
the functional requirements of the International Goal-based Ship Construction Standards for Bulk Carriers and Oil Tankers
(“GBS Standards”).
Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those
vessels be in compliance with the International Maritime Dangerous Goods Code (“IMDG Code”). Effective January 1, 2018, the
IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions from the International
Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods and (3) new mandatory
training requirements. Amendments which took effect on January 1, 2020 also reflect the latest material from the UN
Recommendations on the Transport of Dangerous Goods, including (1) new provisions regarding IMO type 9 tank, (2) new
abbreviations for segregation groups, and (3) special provisions for carriage of lithium batteries and of vehicles powered by
flammable liquid or gas.
The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for
Seafarers (“STCW”). As of February 2017, all seafarers are required to meet the STCW standards and be in possession of a valid
STCW certificate. Flag states that have ratified SOLAS and STCW generally employ the classification societies, which have
incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.
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Furthermore, recent action by the IMO’s Maritime Safety Committee and United States agencies indicates that
cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat
cybersecurity threats. For example, cyber-risk management systems must be incorporated by ship-owners and managers by 2021.
This might cause companies to create additional procedures for monitoring cybersecurity, which could require additional
expenses and/or capital expenditures. The impact of such regulations is hard to predict at this time.
Pollution Control and Liability Requirements
The IMO has negotiated international conventions that impose liability for pollution in international waters and the
territorial waters of the signatories to such conventions. For example, the IMO adopted an International Convention for the
Control and Management of Ships’ Ballast Water and Sediments (the “BWM Convention”) in 2004. The BWM Convention
entered into force on September 8, 2017. The BWM Convention requires ships to manage their ballast water to remove, render
harmless, or avoid the uptake or discharge of new or invasive aquatic organisms and pathogens within ballast water and
sediments. The BWM Convention’s implementing regulations call for a phased introduction of mandatory ballast water exchange
requirements, to be replaced in time with mandatory concentration limits, and require all ships to carry a ballast water record
book and an international ballast water management certificate.
On December 4, 2013, the IMO Assembly passed a resolution revising the application dates of the BWM Convention so
that the dates are triggered by the entry into force date and not the dates originally in the BWM Convention. This, in effect,
makes all vessels delivered before the entry into force date “existing vessels” and allows for the installation of ballast water
management systems on such vessels at the first International Oil Pollution Prevention (“IOPP”) renewal survey following entry
into force of the convention. The MEPC adopted updated guidelines for approval of ballast water management systems (G8) at
MEPC 70. At MEPC 71, the schedule regarding the BWM Convention’s implementation dates was also discussed and
amendments were introduced to extend the date existing vessels are subject to certain ballast water standards. Those changes
were adopted at MEPC 72. Ships over 400 gross tons generally must comply with a “D-1 standard,” requiring the exchange of
ballast water only in open seas and away from coastal waters. The “D-2 standard” specifies the maximum amount of viable
organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. Depending on the date of
the IOPP renewal survey, existing vessels must comply with the D-2 standard on or after September 8, 2019. For most ships,
compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted
organisms. Ballast water management systems, which include systems that make use of chemical, biocides, organisms or
biological mechanisms, or which alter the chemical or physical characteristics of the ballast water, must be approved in
accordance with IMO Guidelines (Regulation D-3). As of October 13, 2019, MEPC 72’s amendments to the BWM Convention
took effect, making the Code for Approval of Ballast Water Management Systems, which governs assessment of ballast water
management systems, mandatory rather than permissive, and formalized an implementation schedule for the D-2 standard. Under
these amendments, all ships must meet the D-2 standard by September 8, 2024. Costs of compliance with these regulations may
be substantial. Additionally, in November 2020, MEPC 75 adopted amendments to the BWM Convention which would require a
commissioning test of the ballast water management system for the initial survey or when performing an additional survey for
retrofits. This analysis will not apply to ships that already have an installed BWM system certified under the BWM Convention.
These amendments are expected to enter into force on June 1, 2022.
Once mid-ocean exchange ballast water treatment requirements become mandatory under the BWM Convention, the
cost of compliance could increase for ocean carriers and may have a material effect on our operations. However, many countries
already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive
and harmful species via such discharges. The U.S., for example, requires vessels entering its waters from another country to
conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certain reporting requirements.
The IMO adopted the International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by
different Protocols in 1976, 1984 and 1992, and amended in 2000 (“the CLC”). Under the CLC and depending on whether the
country in which the damage results is a party to the 1992 Protocol to the CLC, a vessel’s registered owner may be strictly liable
for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain
exceptions. The 1992 Protocol changed certain limits on liability expressed using the International
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Monetary Fund currency unit, the Special Drawing Rights. The limits on liability have since been amended so that the
compensation limits on liability were raised. The right to limit liability is forfeited under the CLC where the spill is caused by the
shipowner’s actual fault and under the 1992 Protocol where the spill is caused by the shipowner’s intentional or reckless act or
omission where the shipowner knew pollution damage would probably result. The CLC requires ships over 2,000 tons covered by
it to maintain insurance covering the liability of the owner in a sum equivalent to an owner’s liability for a single incident. We
have protection and indemnity insurance for environmental incidents. P&I Clubs in the International Group issue the required
Bunkers Convention “Blue Cards” to enable signatory states to issue certificates. All of our vessels are in possession of a CLC
State issued certificate attesting that the required insurance coverage is in force.
The Protocol Relating to Intervention on the High Seas in Cases of Pollution by Substances other than Oil 1973 (the
“Intervention Protocol”) applies if there is a casualty involving a ship carrying LNG or LPG. The Intervention Protocol grants
coastal states the right to intervene to prevent, mitigate or eliminate the danger of ‘substances other than oil’, including LNG and
LPG, after consulting with other states affected and independent IMO-approved experts. The cost of such measures can usually
be recovered by the governmental authority against the shipowner under national law.
Ships are required to maintain a certificate attesting that they maintain adequate insurance to cover an incident. In
jurisdictions, such as the United States where the Bunker Convention has not been adopted, various legislative schemes or
common law govern, and liability is imposed either on the basis of fault or on a strict-liability basis.
Anti-Fouling Requirements
In 2001, the IMO adopted the International Convention on the Control of Harmful Anti-fouling Systems on Ships, or the
“Anti-fouling Convention.” The Anti-fouling Convention, which entered into force on September 17, 2008, prohibits the use of
organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls of vessels. Vessels of over 400
gross tons engaged in international voyages will also be required to undergo an initial survey before the vessel is put into service
or before an International Anti-fouling System Certificate is issued for the first time; and subsequent surveys when the anti-
fouling systems are altered or replaced.
In November 2020, MEPC 75 approved draft amendments to the Anti-fouling Convention to prohibit anti-fouling
systems containing cybutryne, which would apply to ships from January 1, 2023, or, for ships already bearing such an anti-
fouling system, at the next scheduled renewal of the system after that date, but no later than 60 months following the last
application to the ship of such a system. These amendments may be formally adopted at MEPC 76 in 2021.
We have obtained Anti-fouling System Certificates for all of our VLGCs that are subject to the Anti-fouling
Convention.
Compliance Enforcement
Noncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to
increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of
access to, or detention in, some ports. The USCG and European Union authorities have indicated that vessels not in compliance
with the ISM Code by applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively. As of
the date of this report, each of our vessels is ISM Code certified. However, there can be no assurance that such certificates will be
maintained in the future. The IMO continues to review and introduce new regulations. It is impossible to predict what additional
regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.
Hazardous Substances
In 1996, the International Convention on Liability and Compensation for Damages in Connection with the Carriage of
Hazardous and Noxious Substances by Sea, or HNS, was adopted and subsequently amended by the 2010 Protocol, or the 2010
HNS Convention. Our LPG vessels may also become subject to the HNS Convention if it is entered
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into force. The Convention creates a regime of liability and compensation for damage from hazardous and noxious substances,
including liquefied gases. The 2010 HNS Convention sets up a two-tier system of compensation composed of compulsory
insurance taken out by shipowners and an HNS Fund which comes into play when the insurance is insufficient to satisfy a claim
or does not cover the incident. Under the 2010 HNS Convention, if damage is caused by bulk HNS, claims for compensation will
first be sought from the shipowner up to a maximum of 100 million Special Drawing Rights (“SDR”). If the damage is caused by
packaged HNS or by both bulk and packaged HNS, the maximum liability is 115 million SDR. Once the limit is reached,
compensation will be paid from the HNS Fund up to a maximum of 250 million SDR. The 2010 HNS Convention has not been
ratified by a sufficient number of countries to enter into force, and we cannot estimate the costs that may be needed to comply
with any such requirements that may be adopted with any certainty at this time.
In 2012, MEPC adopted a resolution amending the International Code for the Construction of Equipment of Ships
Carrying Dangerous Chemicals in Bulk, or the IBC Code. The provisions of the IBC Code are mandatory under MARPOL and
the SOLAS Convention. These amendments, which entered into force in June 2014 and took effect on January 1, 2021, pertain to
revised international certificates of fitness for the carriage of dangerous chemicals in bulk and identifying new products that fall
under the IBC Code. In May 2014, additional amendments to the IBC Code were adopted that became effective in January 2016.
These amendments pertain to the installation of stability instruments and cargo tank purging. Our ECO VLGCs are equipped with
stability instruments and cargo tank purging. We may need to make certain minor financial expenditures to comply with these
amendments for our three modern 82,000 cbm VLGCs.
United States Regulations
The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act
The U.S. Oil Pollution Act of 1990 (“OPA”) established an extensive regulatory and liability regime for the protection
and cleanup of the environment from oil spills. OPA affects all “owners and operators” whose vessels trade or operate within the
U.S., its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.’s territorial sea and its 200
nautical mile exclusive economic zone around the U.S. The U.S. has also enacted the Comprehensive Environmental Response,
Compensation and Liability Act (“CERCLA”), which applies to the discharge of hazardous substances other than oil, except in
limited circumstances, whether on land or at sea. OPA and CERCLA both define “owner and operator” in the case of a vessel as
any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations.
Under OPA, vessel owners and operators are “responsible parties” and are jointly, severally and strictly liable (unless
the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up
costs and other damages arising from discharges or threatened discharges of oil from their vessels, including bunkers (fuel). OPA
defines these other damages broadly to include:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;
injury to, or economic losses resulting from, the destruction of real and personal property;
loss of subsistence use of natural resources that are injured, destroyed or lost;
net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or
personal property, or natural resources;
lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or
natural resources; and
net cost of increased or additional public services necessitated by removal activities following a discharge of
oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources.
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OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs. Effective
November 12, 2019, the USCG adjusted the limits of OPA liability for a tank vessel, other than a single-hull tank vessel, over
3,000 gross tons liability to the greater of $2,300 per gross ton or $19,943,400 (subject to periodic adjustment for inflation).
These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety,
construction or operating regulation by a responsible party (or its agent, employee or a person acting pursuant to a contractual
relationship) or a responsible party's gross negligence or willful misconduct. The limitation on liability similarly does not apply if
the responsible party fails or refuses to (i) report the incident as required by law where the responsible party knows or has reason
to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without
sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on
the High Seas Act.
CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal
and remedial costs, as well as damages for injury to, or destruction or loss of, natural resources, including the reasonable costs
associated with assessing the same, and health assessments or health effects studies. There is no liability if the discharge of a
hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under
CERCLA is limited to the greater of $300 per gross ton or $5.0 million for vessels carrying a hazardous substance as cargo and
the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person
liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful
misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating
standards or regulations. The limitation on liability also does not apply if the responsible person fails or refused to provide all
reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.
OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law. OPA
and CERCLA both require owners and operators of vessels to establish and maintain with the USCG evidence of financial
responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject.
Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety
bond, qualification as a self-insurer or a guarantee. We comply and plan to comply going forward with the USCG’s financial
responsibility regulations by providing applicable certificates of financial responsibility.
The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives or statutes,
including higher liability caps under OPA, new regulations regarding offshore oil and gas drilling and a pilot inspection program
for offshore facilities. However, several of these initiatives and regulations have been or may be revised. For example, the U.S.
Bureau of Safety and Environmental Enforcement’s (“BSEE”) revised Production Safety Systems Rule (“PSSR”), effective
December 27, 2018, modified and relaxed certain environmental and safety protections under the 2016 PSSR. Additionally, the
BSEE amended the Well Control Rule, effective July 15, 2019, which rolled back certain reforms regarding the safety of drilling
operations, and former U.S. President Trump had proposed leasing new sections of U.S. waters to oil and gas companies for
offshore drilling. The effects of these proposals and changes are currently unknown, and recently, current U.S. President Biden
signed an executive order temporarily blocking new leases for oil and gas drilling in federal waters. Compliance with any new
requirements of OPA and future legislation or regulations applicable to the operation of our vessels could impact the cost of our
operations and adversely affect our business.
OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents
occurring within their boundaries, provided they accept, at a minimum, the levels of liability established under OPA and some
states have enacted legislation providing for unlimited liability for oil spills. Many U.S. states that border a navigable waterway
have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a
discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law. Moreover, some
states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters, although in some
cases, states which have enacted this type of legislation have not yet issued implementing regulations defining vessel owners’
responsibilities under these laws. We intend to comply with all applicable state regulations in the ports where our vessels call.
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We currently maintain pollution liability coverage insurance in the amount of $1 billion per incident for each of our
vessels. If the damages from a catastrophic spill were to exceed our insurance coverage, it could have an adverse effect on our
business and results of operation.
Other United States Environmental Initiatives
The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (“CAA”) requires the EPA to promulgate
standards applicable to emissions of volatile organic compounds and other air contaminants. Our vessels are subject to vapor
control and recovery requirements for certain cargoes when loading, unloading, ballasting, cleaning and conducting other
operations in regulated port areas. The CAA also requires states to draft State Implementation Plans, or “SIPs”, designed to attain
national health-based air quality standards in each state. Although state-specific, SIPs may include regulations concerning
emissions resulting from vessel loading and unloading operations by requiring the installation of vapor control equipment. Our
vessels operating in such regulated port areas with restricted cargoes are equipped with vapor recovery systems that satisfy these
existing requirements.
The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil, hazardous substances and ballast water in U.S.
navigable waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for
any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and
complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of “waters of the
United States” (“WOTUS”), thereby expanding federal authority under the CWA. Following litigation on the revised WOTUS
rule, in December 2018, the EPA and Department of the Army proposed a revised, limited definition of “waters of the United
States.” The proposed rule was published in the Federal Register on February 14, 2019 and was subject to public comment. On
October 22, 2019, the agencies published a final rule repealing the 2015 Rule defining “waters of the United States” and
recodified the regulatory text that existed prior to the 2015 Rule. The final rule became effective on December 23, 2019. On
January 23, 2020, the EPA published the “Navigable Waters Protection Rule,” which replaces the rule published on October 22,
2019, and redefines “waters of the United States.” This rule became effective on June 22, 2020, although the effective date has
been stayed in at least one U.S. state pursuant to court order. The effect of this rule is currently unknown.
The EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the
installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility
disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict our vessels from entering U.S.
Waters. The EPA will regulate these ballast water discharges and other discharges incidental to the normal operation of certain
vessels within United States waters pursuant to the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on
December 4, 2018 and replaced the 2013 Vessel General Permit (“VGP”) program (which authorizes discharges incidental to
operations of commercial vessels and contains numeric ballast water discharge limits for most vessels to reduce the risk of
invasive species in U.S. waters, stringent requirements for exhaust gas scrubbers, and requirements for the use of environmentally
acceptable lubricants) and current Coast Guard ballast water management regulations adopted under the U.S. National Invasive
Species Act (“NISA”), such as mid-ocean ballast exchange programs and installation of approved USCG technology for all
vessels equipped with ballast water tanks bound for U.S. ports or entering U.S. waters. VIDA establishes a new framework for
the regulation of vessel incidental discharges under Clean Water Act (CWA), requires the EPA to develop performance standards
for those discharges within two years of enactment, and requires the U.S. Coast Guard to develop implementation, compliance
and enforcement regulations within two years of EPA’s promulgation of standards. Under VIDA, all provisions of the 2013 VGP
and USCG regulations regarding ballast water treatment remain in force and effect until the EPA and U.S. Coast Guard
regulations are finalized. Non-military, non-recreational vessels greater than 79 feet in length must continue to comply with the
requirements of the VGP, including submission of a Notice of Intent (“NOI”) or retention of a PARI form and submission of
annual reports. We have submitted NOIs for our vessels where required. Compliance with the EPA, U.S. Coast Guard and state
regulations could require the installation of ballast water treatment equipment on our vessels or the implementation of other port
facility disposal procedures at potentially substantial cost, or may otherwise restrict our vessels from entering U.S. waters.
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European Union Regulations
In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges
of polluting substances, including minor discharges, if committed with intent, recklessly or with serious negligence and the
discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting the discharge of a
polluting substance may also lead to criminal penalties. The directive applies to all types of vessels, irrespective of their flag, but
certain exceptions apply to warships or where human safety or that of the ship is in danger. Criminal liability for pollution may
result in substantial penalties or fines and increased civil liability claims. Regulation (EU) 2015/757 of the European Parliament
and of the Council of 29 April 2015 (amending EU Directive 2009/16/EC) governs the monitoring, reporting and verification of
carbon dioxide emissions from maritime transport, and, subject to some exclusions, requires companies with ships over 5,000
gross tonnage to monitor and report carbon dioxide emissions annually, which may cause us to incur additional expenses.
The European Union has adopted several regulations and directives requiring, among other things, more frequent
inspections of high-risk ships, as determined by type, age, and flag as well as the number of times the ship has been detained. The
European Union also adopted and extended a ban on substandard ships and enacted a minimum ban period and a definitive ban
for repeated offenses. The regulation also provided the European Union with greater authority and control over classification
societies, by imposing more requirements on classification societies and providing for fines or penalty payments for
organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to use reduced sulfur
content fuel for their main and auxiliary engines. The EU Directive 2005/33/EC (amending Directive 1999/32/EC) introduced
requirements parallel to those in Annex VI relating to the sulfur content of marine fuels. In addition, the EU imposed a 0.1%
maximum sulfur requirement for fuel used by ships at berth in the Baltic, the North Sea and the English Channel (the so called
“SOx-Emission Control Area”). As of January 2020, EU member states must also ensure that ships in all EU waters, except the
SOx-Emission Control Area, use fuels with a 0.5% maximum sulfur content.
On September 15, 2020, the European Parliament voted to include greenhouse gas emissions from the maritime sector
in the European Union’s carbon market from 2022. This will require shipowners to buy permits to cover these emissions.
Contingent on another formal approval vote, specific regulations are forthcoming and are expected to be proposed in 2021.
International Labour Organization
The International Labour Organization (the “ILO”) is a specialized agency of the UN that has adopted the Maritime
Labor Convention 2006 (“MLC 2006”). A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance is
required to ensure compliance with the MLC 2006 for all ships that are 500 gross tonnage or over and are either engaged in
international voyages or flying the flag of a Member and operating from a port, or between ports, in another country. We believe
that all our vessels are in substantial compliance with and are certified to meet MLC 2006.
Greenhouse Gas Regulation
Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the
United Nations Framework Convention on Climate Change, which entered into force in 2005 and pursuant to which adopting
countries have been required to implement national programs to reduce greenhouse gas emissions with targets extended through
2020. International negotiations are continuing with respect to a successor to the Kyoto Protocol, and restrictions on shipping
emissions may be included in any new treaty. In December 2009, more than 27 nations, including the U.S. and China, signed the
Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gas emissions. The 2015 United Nations
Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force on November 4, 2016 and does not
directly limit greenhouse gas emissions from ships. The U.S. initially entered into the agreement, but on June 1, 2017, former
U.S. President Trump announced that the United States intends to withdraw from the Paris Agreement, and the withdrawal
became effective on November 4, 2020. On January 20, 2021, U.S. President Biden signed an executive order to rejoin the Paris
Agreement, which the U.S. officially rejoined on February 19, 2021.
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On April 22, 2021, U.S. President Biden also announced a new target for the U.S. to achieve a 50-52% reduction from 2005
levels in economy-wide net greenhouse pollution by 2030.
At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO
strategy on reduction of greenhouse gas emissions from ships was approved. In accordance with this roadmap, in April 2018,
nations at the MEPC 72 adopted an initial strategy to reduce greenhouse gas emissions from ships. The initial strategy identifies
“levels of ambition” to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through
implementation of further phases of the EEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an
average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008
emission levels; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 compared to 2008 while
pursuing efforts towards phasing them out entirely. The initial strategy notes that technological innovation, alternative fuels
and/or energy sources for international shipping will be integral to achieve the overall ambition. These regulations could cause us
to incur additional substantial expenses.
The EU made a unilateral commitment to reduce overall greenhouse gas emissions from its member states from 20% of
1990 levels by 2020. The EU also committed to reduce its emissions by 20% under the Kyoto Protocol’s second period from
2013 to 2020. Starting in January 2018, large ships over 5,000 gross tonnage calling at EU ports are required to collect and
publish data on carbon dioxide emissions and other information. As previously discussed, regulations relating to the inclusion of
greenhouse gas emissions from the maritime sector in the European Union’s carbon market are also forthcoming.
In the United States, the EPA issued a finding that greenhouse gases endanger the public health and safety, adopted
regulations to limit greenhouse gas emissions from certain mobile sources and proposed regulations to limit greenhouse gas
emissions from large stationary sources. However, in March 2017, former U.S. President Trump signed an executive order to
review and possibly eliminate the EPA’s plan to cut greenhouse gas emissions, and in August 2019, the Administration
announced plans to weaken regulations for methane emissions. On August 13, 2020, the EPA released rules rolling back
standards to control methane and volatile organic compound emissions from new oil and gas facilities. However, U.S. President
Biden recently directed the EPA to publish a proposed rule suspending, revising, or rescinding certain of these rules. The EPA or
individual U.S. states could enact environmental regulations that would affect our operations.
Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S. or other countries
where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol or Paris Agreement, that restricts
emissions of greenhouse gases could require us to make significant financial expenditures which we cannot predict with certainty
at this time. We have signed contracts with manufacturers and a qualified system installers for the purchase and installation of
scrubbers on ten of our vessels, of which nine have been installed as of June 1, 2021, with the tenth expected to be completed in
June 2021. In addition to the added costs, the concern over climate change and regulatory measures to reduce greenhouse gas
emissions may reduce global demand for oil and oil products, which would have an adverse effect on our business, financial
results and cash flows.
Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate
change may result in sea level changes or certain weather events. In addition, there may be significant physical effects of climate
change from greenhouse gas emissions that have the potential to negatively impact our customers, personnel, and physical assets
any of which could adversely impact the demand for our services or our ability to recruit personnel.
Vessel Security Regulations
Since the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to
enhance vessel security such as the U.S. Maritime Transportation Security Act of 2002 (“MTSA”). To implement certain portions
of the MTSA, the USCG issued regulations requiring the implementation of certain security requirements aboard vessels
operating in waters subject to the jurisdiction of the United States and at certain ports and facilities, some of which are regulated
by the EPA.
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Similarly, Chapter XI-2 of the SOLAS Convention imposes detailed security obligations on vessels and port authorities
and mandates compliance with the International Ship and Port Facility Security Code (“the ISPS Code”). The ISPS Code is
designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attain an
International Ship Security Certificate (“ISSC”) from a recognized security organization approved by the vessel’s flag state.
Ships operating without a valid certificate may be detained, expelled from, or refused entry at port until they obtain an ISSC. The
various requirements, some of which are found in the SOLAS Convention, include, for example, 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 alert 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, 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.
The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from
MTSA vessel security measures, provided such vessels have on board a valid ISSC that attests to the vessel’s compliance with
the SOLAS Convention security requirements and the ISPS Code. Future security measures could have a significant financial
impact on us. We intend to comply with the various security measures addressed by MTSA, the SOLAS Convention and the
ISPS Code.
The cost of vessel security measures has also been affected by the escalation in the frequency of acts of piracy against
ships, notably off the coast of Somalia, including the Gulf of Aden and Arabian Sea area. Substantial loss of revenue and other
costs may be incurred as a result of detention of a vessel or additional security measures, and the risk of uninsured losses could
significantly affect our business. Costs are incurred in taking additional security measures in accordance with Best Management
Practices to Deter Piracy, notably those contained in the BMP5 industry standard.
We seek to manage exposure to losses from the above-described environmental and vessel security laws through our
development of appropriate risk management programs, including compliance programs, safety management systems and
insurance programs, as applicable.
Taxation
The following is a discussion of the material Marshall Islands and United States federal income tax considerations
relevant to a United States Holder and a Non-United States Holder, each as defined below, with respect to the common shares.
This discussion does not purport to deal with the tax consequences of owning our common shares to all categories of investors,
some of which, such as financial institutions, regulated investment companies, real estate investment trusts, tax exempt
organizations, insurance companies, persons holding our common stock as part of a hedging, integrated, conversion or
constructive sale transaction or a straddle, traders in securities that have elected the mark to market method of accounting for
their securities, persons liable for alternative minimum tax, persons subject to the “base erosion and anti-avoidance” tax, persons
who are investors in partnerships or other pass through entities for United States federal income tax purposes or hold our
common shares through an applicable partnership interest, dealers in securities or currencies, United States Holders whose
functional currency is not the United States dollar, investor that are required to recognize income for U.S. federal income tax
purposes no later than when such income is included on an “applicable financial statement” and investors that own, actually or
under applicable constructive ownership rules, 10% or more of our shares of common stock, may be subject to special rules. This
discussion deals only with holders who purchase and hold the common shares as a capital asset. You are encouraged to consult
your own tax advisors concerning the overall tax consequences arising in your own particular situation under United States
federal, state, local or non-United States law of the ownership of common shares.
Marshall Islands Tax Considerations
In the opinion of Seward & Kissel LLP, the following are the material Marshall Islands tax consequences of our
activities to us and of our common shares to our shareholders. We are incorporated in the Marshall Islands. Under current
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Marshall Islands law, we are not subject to tax on income or capital gains, and no Marshall Islands withholding tax will be
imposed upon payments of dividends by us to our shareholders.
United States Federal Income Tax Considerations
In the opinion of Seward & Kissel LLP, the following are the material United States federal income tax consequences to
us of our activities and to United States Holders and Non-United States Holders, each as defined below, of the common shares.
The following discussion of United States federal income tax matters is based on the United States Internal Revenue Code of
1986 as in effect as of the date hereof, or the Code, judicial decisions, administrative pronouncements, and existing and proposed
regulations issued by the United States Department of the Treasury, or the Treasury Regulations, all of which are subject to
change, possibly with retroactive effect. The discussion below is based, in part, on the description of our business as described in
this report and assumes that we conduct our business as described herein.
United States Federal Income Taxation of Operating Income: In General
We anticipate that we will earn substantially all our income from the hiring of vessels for use on a time or spot charter
basis, including through the Helios Pool, and from the performance of services directly related to those uses, all of which we refer
to as "shipping income."
Unless we qualify for an exemption from United States federal income taxation under the rules of Section 883 of the
Code, or Section 883, as discussed below, a foreign corporation such as the Company will be subject to United States federal
income taxation on its "shipping income" that is treated as derived from sources within the United States, to which we refer as
"United States source shipping income." For United States federal income tax purposes, "United States source shipping income"
includes 50% of shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in
the United States.
Shipping income attributable to transportation exclusively between non-United States ports will be considered to be
100% derived from sources entirely outside the United States. Shipping income derived from sources outside the United States
will not be subject to any United States federal income tax.
Shipping income attributable to transportation exclusively between United States ports is considered to be 100% derived
from United States sources. However, we are not permitted by United States law to engage in the transportation of cargoes that
produces 100% United States source shipping income.
Unless we qualify for the exemption from tax under Section 883, our gross United States source shipping income would
be subject to a 4% tax imposed without allowance for deductions as described below.
Exemption of Operating Income from United States Federal Income Taxation
Under Section 883 and the Treasury Regulations thereunder, a foreign corporation will be exempt from United States
federal income taxation of its United States source shipping income if:
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
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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."
The Republic of The Marshall Islands, the jurisdiction where we and our ship-owning subsidiaries are incorporated, has
been officially recognized by the United States Internal Revenue Service, or the IRS, as a qualified foreign country that grants the
requisite "equivalent exemption" from tax in respect of each category of shipping income we earn and currently expect to earn in
the future. Therefore, we will be exempt from United States federal income taxation with respect to our United States source
shipping income if we satisfy either the 50% Ownership Test or the Publicly-Traded Test.
We believe that we satisfy the Publicly-Traded Test, a factual determination made on an annual basis, with respect to
our taxable year ended March 31, 2021, and we expect to continue to do so for our subsequent taxable years, and we intend to
take this position for United States federal income tax reporting purposes. We do not currently anticipate circumstances under
which we would be able to satisfy the 50% Ownership Test.
Publicly-Traded Test
The Treasury Regulations under Section 883 provide, in pertinent part, that shares of a foreign corporation will be
considered to be "primarily traded" on an established securities market in a country if the number of shares of each class of stock
that are traded during any taxable year on all established securities markets in that country exceeds the number of shares in each
such class that are traded during that year on established securities markets in any other single country. The Company's common
shares, which constitute its sole class of issued and outstanding stock is "primarily traded" on the New York Stock Exchange, or
the NYSE, an established securities market for these purposes.
Under the Treasury Regulations, our common shares will be considered to be "regularly traded" on an established
securities market if one or more classes of our shares representing more than 50% of our outstanding stock, by both total
combined voting power of all classes of stock entitled to vote and total value, are listed on such market, to which we refer as the
"listing threshold." Since all of our common shares are listed on the NYSE, we expect to satisfy the listing threshold.
The Treasury Regulations also require that with respect to each class of stock relied upon to meet the listing threshold,
(i) such class of stock traded on the market, other than in minimal quantities, on at least 60 days during the taxable year or
one-sixth of the days in a short taxable year, which we refer to as the "trading frequency test"; and (ii) the aggregate number of
shares of such class of stock traded on such market during the taxable year must be at least 10% of the average number of shares
of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxable year, which we refer
to as the "trading volume" test. We anticipate that we will satisfy the trading frequency and trading volume tests. Even if this
were not the case, the Treasury Regulations provide that the trading frequency and trading volume tests will be deemed satisfied
if, as is expected to be the case with our common shares, such class of stock is traded on an established securities market in the
United States and such shares are regularly quoted by dealers making a market in such shares.
Notwithstanding the foregoing, the Treasury Regulations provide, in pertinent part, that a class of shares will not be
considered to be "regularly traded" on an established securities market for any taxable year in which 50% or more of the vote and
value of the outstanding shares of such class are owned on more than half the days during the taxable year by persons who each
own 5% or more of the vote and value of such class of outstanding stock, to which we refer as the "5% Override Rule."
For purposes of being able to determine the persons who actually or constructively own 5% or more of the vote and
value of our common shares, or "5% Shareholders," the Treasury Regulations permit us to rely on those persons that are
identified on Schedule 13G and Schedule 13D filings with the Commission, as owning 5% or more of our common shares. The
Treasury Regulations further provide that an investment company which is registered under the Investment Company Act of
1940, as amended, will not be treated as a 5% Shareholder for such purposes.
In the event the 5% Override Rule is triggered, the Treasury Regulations provide that the 5% Override Rule will
nevertheless not apply if we can establish that within the group of 5% Shareholders, qualified shareholders (as defined for
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purposes of Section 883) own sufficient number of shares to preclude non-qualified shareholders in such group from owning
50% or more of our common shares for more than half the number of days during the taxable year.
We believe that we satisfy the Publicly-Traded Test and will not be subject to the 5% Override Rule for taxable year
ended March 31, 2021 and we also expect to continue to do so for our subsequent taxable years. However, there are factual
circumstances beyond our control that could cause us to lose the benefit of the Section 883 exemption. For example, we may no
longer qualify for Section 883 exemption for a particular taxable year if 5% Shareholders were to own, in the aggregate, 50% or
more of our outstanding common shares on more than half the days of the taxable year, unless we could establish that within the
group of 5% Shareholders, qualified shareholders own sufficient number of our shares to preclude the non-qualified shareholders
in such group from owning 50% or more of our common shares for more than half the number of days during the taxable year.
Under the Treasury Regulations, we would have to satisfy certain substantiation requirements regarding the identity of our
shareholders. These requirements are onerous and there is no assurance that we would be able to satisfy them. Given the factual
nature of the issues involved, we can give no assurances in regards of our or our subsidiaries' qualification for the Section 883
exemption.
Taxation in Absence of Section 883 Exemption
If the benefits of Section 883 are unavailable, our United States source shipping income would be subject to a 4% tax
imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, or the "4% gross basis tax regime," to the
extent that such income is not considered to be "effectively connected" with the conduct of a United States trade or business, as
described below. Since under the sourcing rules described above, no more than 50% of our shipping income would be treated as
being United States source shipping income, the maximum effective rate of United States federal income tax on our shipping
income would never exceed 2% under the 4% gross basis tax regime.
To the extent our United States source shipping income is considered to be "effectively connected" with the conduct of a
United States trade or business, as described below, any such "effectively connected" United States source shipping income, net
of applicable deductions, would be subject to United States federal income tax, currently imposed at a rate of 21%. In addition,
we would generally be subject to the 30% "branch profits" tax on earnings effectively connected with the conduct of such trade or
business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the
conduct of our United States trade or business.
Our United States source shipping income would be considered "effectively connected" with the conduct of a United
States trade or business only if:
● 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.
We do not intend to have, or permit circumstances that would result in having, any vessel sailing to or from the United
States on a regularly scheduled basis. Based on the foregoing and on the expected mode of our shipping operations and other
activities, it is anticipated that none of our United States source shipping income will be "effectively connected" with the conduct
of a United States trade or business.
United States Taxation of Gain on Sale of Vessels
Regardless of whether we qualify for exemption under Section 883, we will not be subject to United States federal
income tax with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States
under United States federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United
States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United
States. It is expected that any sale of a vessel by us will be considered to occur outside of the United States.
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United States Federal Income Taxation of United States Holders
As used herein, the term "United States Holder" means a holder that for United States federal income tax purposes is a
beneficial owner of common shares and is an individual United States citizen or resident, a United States corporation or other
United States entity taxable as a corporation, an estate the income of which is subject to United States federal income taxation
regardless of its source, or a trust if a court within the United States is able to exercise primary jurisdiction over the
administration of the trust and one or more United States persons have the authority to control all substantial decisions of the
trust.
If a partnership holds the common shares, the tax treatment of a partner will generally depend upon the status of the
partner and upon the activities of the partnership. If you are a partner in a partnership holding the common shares, you are
encouraged to consult your tax advisor.
Distributions
Subject to the discussion of passive foreign investment companies below, any distributions made by us with respect to
our common shares to a United States Holder will generally constitute dividends to the extent of our current or accumulated
earnings and profits, as determined under United States federal income tax principles. Distributions in excess of such earnings
and profits will be treated first as a nontaxable return of capital to the extent of the United States Holder's tax basis in its common
shares and thereafter as capital gain. Because we are not a United States corporation, United States Holders that are corporations
will generally not be entitled to claim a dividends-received deduction with respect to any distributions they receive from us.
Dividends paid with respect to our common shares will generally be treated as foreign source dividend income and will generally
constitute "passive category income" for purposes of computing allowable foreign tax credits for United States foreign tax credit
purposes.
Dividends paid on our common shares to certain non-corporate United States Holders will generally be treated as
"qualified dividend income" that is taxable to such United States Holders at preferential tax rates provided that (1) the common
shares are readily tradable on an established securities market in the United States (such as the NYSE, on which our common
shares will be traded), (2) the shareholder has owned the common stock for more than 60 days in the 121-day period beginning
60 days before the date on which the common stock becomes ex-dividend, and (3) we are not a passive foreign investment
company for the taxable year during which the dividend is paid or the immediately preceding taxable year.
There is no assurance that any dividends paid on our common shares will be eligible for these preferential rates in the
hands of such non-corporate United States Holders, although, as described above, we expect such dividends to be so eligible
provided an eligible non-corporate United States Holder meets all applicable requirements and we are not a passive foreign
passive investment company in the taxable year during which the dividend is paid or the immediately preceding taxable year.
Any dividends paid by us which are not eligible for these preferential rates will be taxed as ordinary income to a non-corporate
United States Holder.
Special rules may apply to any "extraordinary dividend"—generally, a dividend in an amount which is equal to or in
excess of 10% of a shareholder's adjusted tax basis or dividends received within a one-year period that, in the aggregate, equal or
exceed 20% of a shareholder's adjusted tax basis (or fair market value upon the shareholder's election) in a common share—paid
by us. If we pay an "extraordinary dividend" on our common shares that is treated as "qualified dividend income," then any loss
derived by certain non-corporate United States Holders from the sale or exchange of such common shares will be treated as long-
term capital loss to the extent of such dividend.
Sale, Exchange or Other Disposition of Common Shares
Assuming we do not constitute a passive foreign investment company for any taxable year, a United States Holder
generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares in an amount equal
to the difference between the amount realized by the United States Holder from such sale, exchange or other disposition and the
United States Holder's tax basis in such shares. Such gain or loss will be treated as long-term capital gain or loss if the United
States Holder's holding period is greater than one year at the time of the sale, exchange or other
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disposition. Such capital gain or loss will generally be treated as United States source income or loss, as applicable, for United
States foreign tax credit purposes. Long-term capital gains of certain non-corporate United States Holders are currently eligible
for reduced rates of taxation. A United States Holder's ability to deduct capital losses is subject to certain limitations.
Passive Foreign Investment Company Status and Significant Tax Consequences
Special United States federal income tax rules apply to a United States Holder that holds shares in a foreign corporation
classified as a "passive foreign investment company," or a PFIC, for United States federal income tax purposes. In general, we
will be treated as a PFIC with respect to a United States Holder if, for any taxable year in which such holder holds our common
shares, either:
●
●
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.
For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share
of the income and assets, respectively, of any of our ship-owning subsidiaries in which we own at least 25% of the value of the
subsidiary's stock. Income earned, or deemed earned, by us in connection with the performance of services would not constitute
passive income. By contrast, rental income would generally constitute "passive income" unless we were treated under specific
rules as deriving our rental income in the active conduct of a trade or business.
We believe that income we earn from the voyage charters, and also from time charters, for the reasons discussed below,
will be treated as active income for PFIC purposes and as a result, we intend to take the position that we satisfy the 75% income
test for our taxable year ended March 31, 2021.
As of the date of this Annual Report, we have taken delivery of all of the vessels under our newbuilding contracts.
Accordingly, based on our current and anticipated operations, we do not believe that we will be treated as a PFIC for our taxable
year ended March 31, 2021, or subsequent taxable years, and we intend to take such position for our United States federal income
tax reporting purposes. Our belief is based principally on the position that the gross income we derive from our voyage or time
chartering activities should constitute services income, rather than rental income. Accordingly, such income should not constitute
passive income, and the assets that we own and operate in connection with the production of such income, in particular, the
vessels, should not constitute passive assets for purposes of determining whether we are a PFIC. There is substantial legal
authority supporting this position consisting of case law and IRS pronouncements concerning the characterization of income
derived from time charters as services income for other tax purposes. However, there is also authority which characterizes time
charter income as rental income rather than services income for other tax purposes. Accordingly, no assurance can be given that
the IRS or a court of law will accept this position, and there is a risk that the IRS or a court of law could determine that we are a
PFIC. In addition, although we intend to conduct our affairs in a manner to avoid being classified as a PFIC with respect to any
taxable year, we cannot assure you that the nature of our operations will not change in the future.
As discussed more fully below, for any taxable year in which we are, or were to be treated as, a PFIC, a United States
Holder would be subject to different taxation rules depending on whether the United States Holder makes an election to treat us
as a "Qualified Electing Fund," which election we refer to as a "QEF election." As an alternative to making a QEF election, a
United States Holder should be able to make a "mark-to-market" election with respect to our common shares, as discussed
below. A United States holder of shares in a PFIC will be required to file an annual information return containing information
regarding the PFIC as required by applicable Treasury Regulations. We intend to promptly notify our shareholders if we
determine we are a PFIC for any taxable year.
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Taxation of United States Holders Making a Timely QEF Election
If a United States Holder makes a timely QEF election, which United States Holder we refer to as an "Electing Holder,"
the Electing Holder must report for United States federal income tax purposes its pro rata share of our ordinary earnings and net
capital gain, if any, for each of our taxable years during which we are a PFIC that ends with or within the taxable year of the
Electing Holder, regardless of whether distributions were received from us by the Electing Holder. No portion of any such
inclusions of ordinary earnings will be treated as "qualified dividend income." Net capital gain inclusions of certain
non-corporate United States Holders would be eligible for preferential capital gains tax rates. The Electing Holder's adjusted tax
basis in the common shares will be increased to reflect any income included under the QEF election. Distributions of previously
taxed income will not be subject to tax upon distribution but will decrease the Electing Holder's tax basis in the common shares.
An Electing Holder would not, however, be entitled to a deduction for its pro rata share of any losses that we incur with respect to
any taxable year. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of
our common shares. A United States Holder would make a timely QEF election for our common shares by filing one copy of IRS
Form 8621 with his United States federal income tax return for the first year in which he held such shares when we were a PFIC.
If we take the position that we are not a PFIC for any taxable year, and it is later determined that we were a PFIC for such taxable
year, it may be possible for a United States Holder to make a retroactive QEF election effective for such year. If we determine
that we are a PFIC for any taxable year, we will provide each United States Holder with all necessary information required for the
United States Holder to make the QEF election and to report its pro rata share of our ordinary earnings and net capital gain, if
any, for each of our taxable years during which we are a PFIC that ends with or within the taxable year of the Electing Holder as
described above.
Taxation of United States Holders Making a "Mark-to-Market" Election
Alternatively, for any taxable year in which we determine that we are a PFIC, and, assuming as we anticipate will be the
case, our shares are treated as "marketable stock," a United States Holder would be allowed to make a "mark-to-market" election
with respect to our common shares, provided the United States Holder completes and files IRS Form 8621 in accordance with the
relevant instructions and related Treasury Regulations. If that election is made, the United States Holder generally would include
as ordinary income in each taxable year the excess, if any, of the fair market value of the common shares at the end of the taxable
year over such Holder's adjusted tax basis in the common shares. The United States Holder would also be permitted an ordinary
loss in respect of the excess, if any, of the United States Holder's adjusted tax basis in the common shares over its fair market
value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the
mark-to-market election. A United States Holder's tax basis in his common shares would be adjusted to reflect any such income
or loss amount recognized. In a year when we are a PFIC, any gain realized on the sale, exchange or other disposition of our
common shares would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the
common shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains
previously included by the United States Holder.
Taxation of United States Holders Not Making a Timely QEF or Mark- to-Market Election
For any taxable year in which we determine that we are a PFIC, a United States Holder who does not make either a QEF
election or a "mark-to-market" election for that year, whom we refer to as a "Non-Electing Holder," would be subject to special
rules with respect to (i) any excess distribution (i.e., the portion of any distributions received by the Non-Electing Holder on the
common shares in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder in
the three preceding taxable years, or, if shorter, the Non-Electing Holder's holding period for the common shares), and (ii) any
gain realized on the sale, exchange or other disposition of our common shares. Under these special rules:
●
●
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
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●
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.
United States Federal Income Taxation of "Non--United States Holders"
As used herein, the term "Non-United States Holder" means a holder that, for United States federal income tax
purposes, is a beneficial owner of common shares (other than a partnership) that is not a United States Holder.
If a partnership holds our common shares, the tax treatment of a partner will generally depend upon the status of the
partner and upon the activities of the partnership. If you are a partner in a partnership holding our common shares, you are
encouraged to consult your tax advisor.
Dividends on Common Shares
Subject to the discussion of backup withholding below, a Non-United States Holder generally will not be subject to
United States federal income or withholding tax on dividends received from us with respect to our common shares, unless:
●
●
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.
Sale, Exchange or Other Disposition of Common Shares
Subject to the discussion of backup withholding below, a Non-United States Holder generally will not be subject to
United States federal income or withholding tax on any gain realized upon the sale, exchange or other disposition of our common
shares, unless:
●
●
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.
Income or Gains Effectively Connected with a United States Trade or Business
If the Non-United States Holder is engaged in a United States trade or business for United States federal income tax
purposes, dividends on our common shares and gain from the sale, exchange or other disposition of our common shares, that are
effectively connected with the conduct of that trade or business (and, if required by an applicable income tax treaty, is attributable
to a United States permanent establishment), will generally be subject to regular United States federal income tax in the same
manner as discussed in the previous section relating to the taxation of United States Holders. In addition, in the case of a
corporate Non-United States Holder, its earnings and profits that are attributable to the effectively connected income, which are
subject to certain adjustments, may be subject to an additional branch profits tax at a rate of 30%, or at a lower rate as may be
specified by an applicable United States income tax treaty.
Backup Withholding and Information Reporting
In general, dividend payments, or other taxable distributions, and the payment of the gross proceeds on a sale of our
common shares, made within the United States to a non-corporate United States Holder will be subject to information
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reporting. Such payments or distributions may also be subject to backup withholding if the non-corporate United States Holder:
●
●
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.
Non-United States Holders may be required to establish their exemption from information reporting and backup
withholding with respect to dividends payments or other taxable distribution on our common shares by certifying their status on
an appropriate IRS Form W-8. If a Non-United States Holder sells our common shares to or through a United States office of a
broker, the payment of the proceeds is subject to both United States backup withholding and information reporting unless the
Non-United States Holder certifies that it is a non-United States person, under penalties of perjury, or it otherwise establish an
exemption. If a Non-United States Holder sells our common shares through a Non-United States office of a Non-United States
broker and the sales proceeds are paid outside the United States, then information reporting and backup withholding generally
will not apply to that payment. However, United States information reporting requirements, but not backup withholding, will
apply to a payment of sales proceeds, even if that payment is made outside the United States, if a Non-United States Holder sells
our common shares through a Non-United States office of a broker that is a United States person or has some other contacts with
the United States. Such information reporting requirements will not apply, however, if the broker has documentary evidence in its
records that the Non-United States Holder is not a United States person and certain other conditions are met, or the Non-United
States Holder otherwise establishes an exemption.
Backup withholding is not an additional tax. Rather, a refund may generally be obtained of any amounts withheld under
backup withholding rules that exceed the taxpayer's United States federal income tax liability by filing a timely refund claim with
the IRS.
Individuals who are United States Holders (and to the extent specified in applicable Treasury regulations, Non-United
States Holders and certain United States entities) who hold "specified foreign financial assets" (as defined in Section 6038D of
the Code) are required to file IRS Form 8938 with information relating to the asset for each taxable year in which the aggregate
value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year (or such
higher dollar amount as prescribed by applicable Treasury Regulations). Specified foreign financial assets would include, among
other assets, our common shares, unless the common shares are held in an account maintained with a United States financial
institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to
reasonable cause and not due to willful neglect. Additionally, in the event an individual United States Holder (and to the extent
specified in applicable Treasury Regulations, a Non-United States Holder or a United States entity) that is required to file IRS
Form 8938 does not file such form, the statute of limitations on the assessment and collection of United States federal income
taxes of such holder for the related tax year may not close until three years after the date that the required information is filed.
United States Holders (including United States entities) and Non-United States Holders are encouraged consult their own tax
advisors regarding their reporting obligations in respect of our common shares.
Available Information
Our website is located at www.dorianlpg.com. Information on our website does not constitute a part of this annual
report. Our goal is to maintain our website as a portal through which investors can easily find or navigate to pertinent information
about us, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy
statements, and any other reports, after we file them with the Commission. The public may obtain a copy of our filings, free of
charge, through our corporate internet website as soon as reasonably practicable after we have electronically filed such material
with, or furnished it to, the Commission. Additionally, these materials, including this annual report and the accompanying
exhibits are available from the Commission’s website http://www.sec.gov.
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ITEM 1A. RISK FACTORS
The following risks relate principally to us and our business and the industry in which we operate. Other risks relate
principally to the securities markets and ownership of our common shares. Any of the risk factors described below could
significantly and negatively affect our business, financial condition and results of operations and our ability to pay dividends,
and lower the trading price of our common shares.
Risks Relating to Our Company
We and the Helios Pool operate exclusively in the LPG shipping industry. Due to the general lack of industry diversification,
adverse developments in the LPG shipping industry may adversely affect our business, financial condition and operating
results.
We currently rely exclusively on the cash flow generated from the vessels in our fleet, all of which are VLGCs
operating in the LPG shipping industry (including through the Helios Pool). Unlike some other shipping companies, which have
vessels of varying sizes that can carry different cargoes, such as containers, dry bulk, crude oil and oil products, we depend and
may to continue to depend exclusively on VLGCs transporting LPG. Similarly, the Helios Pool also depends exclusively on the
cash flow generated from VLGCs operating in the LPG shipping industry. General lack of industry diversification makes us
vulnerable to adverse developments in the LPG shipping industry, which would have a significantly greater impact on our
business, financial condition and operating results than such lack of diversification would if we or the Helios Pool owned and
operated more diverse assets or engaged in more diverse lines of business.
Seasonal and other fluctuations in respect of spot market charter rates have had in the past and may have in the future a
negative effect on our revenues, results of operations and cash flows.
As of the date of this annual report, twenty-one vessels from our fleet, including the time chartered-in vessel, operate in
the Helios Pool, which employs vessels on short-term time charters, COAs, or in the spot market, the latter of which exposes us
to fluctuations in spot market charter rates. We also employ two of our VLGCs on fixed time charters outside of the Helios Pool.
As these fixed time charters expire, we may employ these vessels in the spot market.
Generally, VLGC spot market rates are highly seasonal, typically demonstrating strength in the second and third
calendar quarters as suppliers build inventory for high consumption during the northern hemisphere winter. However, 12-month
time charter rates tend to smooth out these short-term fluctuations and recent LPG shipping market activity has not yielded the
expected seasonal results. The successful operation of our vessels in the competitive and highly volatile spot charter market
depends on, among other things, obtaining profitable spot charters, which depends greatly on vessel supply and demand and
minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to retrieve cargo.
The spot charter market may fluctuate significantly based upon LPG and LPG vessel supply and demand. The
successful operation of our vessels in the competitive spot charter market depends on, among other things, obtaining profitable
spot charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling in ballast to pick up
cargo. The spot market is very volatile and there have been and will be periods when spot charter rates decline below the
operating cost of vessels. If future spot charter rates decline, we may be unable to operate our vessels trading in the spot market
profitably, meet our obligations, including payments on indebtedness, or pay dividends in the future. Furthermore, as charter rates
for spot charters are fixed for a single voyage which may last up to several weeks, during periods in which spot charter rates are
rising, we will generally experience delays in realizing the benefits from such increases. If spot charter rates decline in the future,
then we may not be able to profitably operate our vessels trading in the spot market or participating in the Helios Pool; meet our
obligations, including payments on indebtedness; or pay dividends.
Further, although our two fixed time charters outside of the Helios Pool generally provide reliable revenues, they also
limit the portion of our fleet available for spot market voyages during an upswing in the market, when spot market voyages might
be more profitable. Conversely, when the current charters for the two vessels in our fleet on fixed time charters outside of the
Helios Pool expire (or if such charters are terminated early), we may not be able to re-charter these
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vessels at similar or higher rates, or at all. As a result, we may have to accept lower rates or experience off hire time for our
vessels, which would adversely impact our revenues, results of operations and financial condition.
We and/or our pool managers may not be able to successfully secure employment for our vessels or vessels in the Helios Pool,
which could adversely affect our financial condition and results of operations.
As of June 1, 2021, twenty-one of our vessels, including the time chartered-in vessel, are operating within the Helios
Pool, which employs vessels on short-term time charters, COAs, or in the spot market, and two of our vessels are on fixed time
charters outside of the Helios Pool that expire between the first calendar quarter of 2022 and the fourth calendar quarter of 2022.
We cannot assure you that we will be successful in finding employment for our vessels in the spot market, on time charters or
otherwise, or that any employment will be at profitable rates. Moreover, as vessels entered into the Helios Pool are commercially
managed by our wholly-owned subsidiary and Phoenix, we also cannot assure you that we or they will be successful in finding
employment for the vessels in the Helios Pool or that any employment will be profitable. Any inability to locate suitable
employment for our vessels or the vessels in the Helios Pool could affect our general financial condition, results of operation and
cash flow as well as the availability of financing.
We face substantial competition in trying to expand relationships with existing customers and obtain new customers.
The process of obtaining new charter agreements is highly competitive and generally involves an intensive screening
and competitive bidding process, which, in certain cases, extends for several months. Contracts in the time charter market are
awarded based upon a variety of factors, including:
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the size, age, fuel efficiency, and condition of a vessel;
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; and
the operator's willingness to accept operational risks pursuant to the charter, such as allowing termination of the
charter for force majeure events.
Contracts in the spot market are awarded based upon a variety of factors as well, and include:
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the location of the vessel; and
competitiveness of the bid in terms of overall price.
Our vessels, and the vessels operating in the Helios Pool, operate in a highly competitive market and we expect
substantial competition for providing transportation services from a number of companies (both LPG vessel owners and
operators). We anticipate that an increasing number of maritime transport companies, including many with strong reputations and
extensive resources and experience, has entered or will enter the LPG shipping market. Our existing and potential competitors
may have significantly greater financial resources than us. In addition, competitors with greater resources may have larger fleets,
or could operate larger fleets through consolidations, acquisitions, newbuildings or pooling of their vessels with other companies,
and, therefore, may be able to offer a more competitive service than us or the Helios Pool, including better charter rates. We
expect competition from a number of experienced companies providing contracts for gas transportation services to potential LPG
customers, including state-sponsored entities and major energy companies affiliated with the projects requiring shipping services.
As a result, we (including the Helios Pool) may be
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unable to expand our relationships with existing customers or to obtain new customers on a profitable basis, if at all, which would
have a material adverse effect on our business, financial condition and operating results.
We and the Helios Pool are subject to risks with respect to counterparties, and failure of such counterparties to meet their
obligations could cause us to suffer losses or negatively impact our results of operations and cash flows.
We have entered into, and expect to enter into in the future, various contracts, including charter agreements, COAs,
shipbuilding contracts, credit facilities and financing arrangements, including leasing arrangements, that subject us to
counterparty risks. Similarly, the Helios Pool has entered into, and expects to enter into in the future, various contracts, including
charters and COAs, that subject it to counterparty risks. The ability and willingness of our and the Helios Pool’s counterparties to
perform their obligations under any contract will depend on a number of factors that are beyond our control and may include,
among other things, general economic conditions, the condition of the maritime and LPG industries, the overall financial
condition of the counterparty, charter rates for specific types of vessels, and various expenses. For example, a reduction of cash
flow resulting from declines in world trade or the lack of availability of debt or equity financing may result in a significant
reduction in the ability of our charterers or the Helios Pool’s charterers to make required charter payments. In addition, in
depressed market conditions, charterers and customers may no longer need a vessel that is then under charter or contract or may
be able to obtain a comparable vessel at lower rates. As a result, charterers and customers may seek to renegotiate the terms of
their existing charter agreements or avoid their obligations under those contracts. Should a counterparty fail to honor its
obligations under agreements with us or the Helios Pool, we could sustain significant losses and a significant reduction in the
charter hire we earn from the Helios Pool, which could have a material adverse effect on our business, financial condition, results
of operations and cash flows.
We expect to be dependent on a limited number of customers for a material part of our revenues, and failure of such
customers to meet their obligations could cause us to suffer losses or negatively impact our results of operations and cash
flows.
For the year ended March 31, 2021, the Helios Pool accounted for 93% of our total revenues. No other individual
charterer accounted for more than 10%. Within the Helios Pool, one charterer represented 16% of net pool revenues—related
party, for the year ended March 31, 2021. We expect that a material portion of our revenues will continue to be derived from a
limited number of customers. The ability of each of our customers to perform their obligations under a contract with us will
depend on a number of factors that are beyond our control. Should the aforementioned customers fail to honor their obligations
under agreements with us or the Helios Pool, we could sustain material losses that could have a material adverse effect on our
business, financial condition, results of operations and cash flows.
Restrictions on VLGC transits and increased toll charges at the Panama Canal may have an adverse effect on our results of
operations.
In June 2016, the expansion of the Panama Canal, or the Canal, was completed. The new locks allow the Canal to
accommodate significantly larger vessels, including VLGCs, which we operate. Since the completion of the Canal, transit from
the United States Gulf to Asia, an important trade route for our customers, has been shortened by approximately 15 days
compared to transiting via the Cape of Good Hope. According to industry sources, over 90% of the US-to-Asia LPG voyages had
switched to the Canal by November 2016. In response, Panamanian authorities increased tolls for VLGCs crossing the Canal by
approximately 29% in October 2017. Additionally, the Panamanian authorities increased the toll by 15% in April 2020. Finally,
the Panama Canal Authorities decreed that the slots for transit by VLGCs could only be reserved up to 14 days in advance of a
proposed transit. This change has resulted in longer wait times and resales of slots among VLGC operators at significantly higher
rates than those charged by the Panama Canal Authority. These restrictions have added waiting time to transits, which is
typically not paid for by charterers. If subsequent decisions by the Panamanian authorities result in increased rates or additional
waiting time for our VLGCs to cross the Canal and these factors are not reflected in charter rates, it may have an adverse effect
on our results of operations and cash flows.
Our indebtedness and financial obligations may adversely affect our operational flexibility and financial condition.
As of March 31, 2021, we had outstanding indebtedness of $602.1 million, of which $534.3 million is hedged or fixed.
Amounts owed under our current credit facility and financing arrangements, and any future credit facilities or
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financing arrangements, will require us to dedicate a part of our cash flow from operations to paying interest and principal
payments, as applicable. These payments will limit funds available for working capital, capital expenditures, acquisitions,
dividends, stock repurchases and other purposes and may also limit our ability to undertake further equity or debt financing in the
future. Our indebtedness and obligations under our financing arrangements also increase our vulnerability to general adverse
economic and industry conditions, limits our flexibility in planning for and reacting to changes in the industry, and places us at a
disadvantage to other, less leveraged, competitors.
Our credit facility bears interest at variable rates and we anticipate that any future credit facilities will also bear interest
at variable rates. Increases in prevailing rates could increase the amounts that we would have to pay to our lenders or financing
counterparties, even though the outstanding principal amount remains the same, and our net income and available cash flows
would decrease as a result.
We expect our earnings and cash flow to vary from year to year mainly due to the cyclical nature of the LPG shipping
industry. If we do not generate or reserve enough cash flow from operations to satisfy our debt or financing obligations, we may
have to undertake alternative financing plans, such as:
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seeking to raise additional capital;
refinancing or restructuring our debt or financing obligations;
selling our VLGCs; and/or
reducing or delaying capital investments.
However, these alternative financing plans, if necessary, may not be sufficient to allow us to meet our debt or financing
obligations. If we are unable to meet our debt or financing obligations and we default on our obligations under our debt
agreement or financing arrangements, our lenders could elect to declare our outstanding borrowings and certain other amounts
owed, together with accrued interest and fees, to be immediately due and payable and foreclose on the vessels securing that debt,
and our counterparties may seek to repossess the vessels subject to our debt agreement or financing arrangements.
Our existing and future debt and financing agreements contain and are expected to contain restrictive covenants that may
limit our liquidity and corporate activities, which could have an adverse effect on our financial condition and results of
operations.
Our debt agreement and financing arrangements contain, and any future debt agreements or financing arrangements are
expected to contain, customary covenants and event of default clauses, including cross-default provisions that may be triggered
by a default under one of our other contracts or agreements and restrictive covenants and performance requirements, which may
affect operational and financial flexibility. Such restrictions could affect, and in many respects limit or prohibit, among other
things, our ability to pay dividends, incur additional indebtedness, create liens, sell assets, or engage in mergers or acquisitions.
These restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise
restrict corporate activities. There can be no assurance that such restrictions will not adversely affect our ability to finance our
future operations or capital needs.
Our agreements relating to the $758 million debt facility that we entered into in March 2015 with a group of banks and
financial institutions, which are secured by, among other things, fifteen of our VLGCs, require us to maintain specified financial
ratios and satisfy financial covenants. In June 2015, May 2017, and July 2019, we entered into agreements to amend the $758
million debt facility. Collectively, we refer to the $758 million debt facility and these amendments as the 2015 Facility. In April
2020, we refinanced the commercial tranche of the 2015 Facility pursuant to an Amended and Restated Facility Agreement. As
used henceforth, the “2015 AR Facility” shall refer to the 2015 Facility, as amended and restated by the Amended and Restated
Facility Agreement. As of March 31, 2021, we were in compliance with the financial and other covenants contained in the 2015
AR Facility. As of June 1, 2021, approximately $385.0 remains outstanding under the 2015 AR Facility.
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The 2015 AR Facility conditions payments of dividends by us to our shareholders and by our subsidiaries to us on the
absence of an event of default and such payments not creating an event of default.
As a result of the restrictions in our debt agreement and financing arrangements, or similar restrictions in our future debt
agreements or financing arrangements, we may need to seek permission from our lenders or counterparties in order to engage in
certain corporate actions. Our lenders' or counterparties’ interests may be different from ours and we may not be able to obtain
their permission when needed or at all. This may prevent us from taking actions that we believe are in our best interest, which
may adversely impact our revenues, results of operations and financial condition.
A failure by us to meet our payment and other obligations, including our financial and value to loan covenants, could
lead to defaults under our current or future secured loan agreements. In addition, a default under one of our current or future
credit facilities could result in the cross-acceleration of our other indebtedness. Our lenders could then accelerate our
indebtedness and foreclose on our fleet.
The market values of our vessels may decrease, which could cause us to breach covenants in our loan agreements or record
an impairment loss, or negatively impact our ability to enter into future financing arrangements, and as a result could have a
material adverse effect on our business, financial condition and results of operations.
The 2015 AR Facility, which is secured by, among other things, liens on the vessels in our fleet contains various
financial covenants, including requirements relating to our financial condition, financial performance and liquidity. For example,
we are required to maintain a minimum ratio of the market value of the vessels securing a loan to the principal amount
outstanding under such loan. The market value of LPG carriers is sensitive to, among other things, changes in the LPG carrier
charter markets, with vessel values deteriorating when LPG carrier charter rates are anticipated to fall and improving when
charter rates are anticipated to rise. LPG vessel values remain subject to significant fluctuations. A decline in the fair market
values of our vessels could result in us not being in compliance with certain of these loan covenants. Furthermore, if the value of
our vessels deteriorates and our estimated future cash flows decrease, we may have to record an impairment adjustment in our
financial statements or we may be unable to enter into future financing arrangements acceptable to us or at all, which would
adversely affect our financial results and further hinder our ability to raise capital.
If we are unable to comply with any of the restrictions and covenants in our 2015 AR Facility, financing arrangements,
or in future debt financing agreements, and we are unable to obtain a waiver or amendment from our lenders or counterparties for
such noncompliance, a default could occur under the terms of those agreements. Our ability to comply with these restrictions and
covenants, including meeting financial ratios and tests, is dependent on our future performance and may be affected by events
beyond our control. If a default occurs under these agreements, lenders could terminate their commitments to lend or in some
circumstances accelerate the outstanding loans and declare all amounts borrowed due and payable. Our vessels serve as security
under our debt agreement. If our lenders were to foreclose with respect to their liens on our vessels in the event of a default, such
foreclosure could impair our ability to continue our operations. In addition, our current debt agreement contains, and future debt
agreements are expected to contain, cross-default provisions, meaning that if we are in default under certain of our current or
future debt obligations, amounts outstanding under our current or other future debt agreements may also be in default, accelerated
and become due and payable. If any of these events occur, we cannot guarantee that our assets will be sufficient to repay in full
all of our outstanding indebtedness, and we may be unable to find alternative financing. Even if we could obtain alternative
financing, that financing might not be on terms that are favorable or acceptable to us. In addition, if we find it necessary to sell
our vessels at a time when vessel prices are low, we will recognize losses and a reduction in our earnings, which could affect our
ability to raise additional capital necessary for us to comply with our debt agreement.
We are exposed to volatility in the London Interbank Offered Rate and we have and we intend to selectively enter into
derivative contracts, which can result in higher than market interest rates and charges against our income.
The amounts outstanding under our existing credit facility have been advanced at a floating rate based on the London
Interbank Offered Rate, or LIBOR, and changes in LIBOR could affect the amount of interest payable on our debt, and, in turn,
could have an adverse effect on our earnings and cash flow. In recent years, LIBOR has been at relatively low levels, but it may
rise in the future. Our financial condition could be materially adversely affected if LIBOR rises, although only $67.2 million of
our total debt of $599.4 million, or 11.2%, is unhedged or unfixed as of June 1, 2021.
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Due in part to uncertainty relating to the LIBOR calculation process in recent years, it is likely that LIBOR will be
phased out in the future. As a result, lenders have insisted on provisions that entitle the lenders, in their discretion, to replace
published LIBOR as the base for the interest calculation with their cost-of-funds rate. If we are required to agree to such a
provision in future financing agreements, our lending costs could increase significantly, which would have an adverse effect on
our profitability, earnings and cash flow.
In addition, the banks currently reporting information used to set LIBOR will likely stop such reporting after 2021,
when their commitment to reporting information ends. On November 30, 2020, ICE Benchmark Administration, the
administrator of LIBOR, with the support of the United States Federal Reserve and the United Kingdom’s Financial Conduct
Authority, announced plans to consult on ceasing publication of U.S. Dollar LIBOR on December 31, 2021 for only the one-
week and two-month U.S. Dollar LIBOR tenors, and on June 30, 2023 for all other U.S. Dollar LIBOR tenors. The United States
Federal Reserve concurrently issued a statement advising banks to stop new U.S. Dollar LIBOR issuances by the end of 2021.
Such announcements indicate that the continuation of LIBOR on the current basis will not be guaranteed after 2021. The
Alternative Reference Rate Committee, a committee convened by the U.S. Federal Reserve that includes major market
participants, has proposed an alternative rate to replace U.S. Dollar LIBOR: the Secured Overnight Financing Rate, or "SOFR."
The impact of such a transition from LIBOR to SOFR would be significant for us because of our substantial indebtedness.
Pursuant to our 2015 AR Facility, any alternative basis of interest is to be negotiated and agreed between the applicable lenders
under the 2015 AR Facility and us.
We have entered into and may selectively in the future enter into derivative contracts to hedge our overall exposure to
interest rate risk related to our credit facility. Entering into swaps and derivatives transactions is inherently risky and presents
various possibilities for incurring significant expenses. The derivatives strategies that we employ currently and, in the future, may
not be successful or effective, and we could, as a result, incur substantial additional interest costs or losses.
Investments in forward freight derivative instruments could result in losses.
From time to time, we may take hedging or speculative positions in derivative instruments, including freight forward
agreements, or FFAs. Upon settlement, if an FFA contracted charter rate is less than the average of the rates, as reported by an
identified index, for the specified route and period, the seller of the FFA is required to pay the buyer an amount equal to the
difference between the contracted rate and the settlement rate, multiplied by the number of days in the specified period.
Conversely, if the contracted rate is greater than the settlement rate, the buyer is required to pay the seller the settlement sum. If
we do not correctly anticipate charter rate movements over the specified route and time period when we take positions in FFAs or
other derivative instruments, we could suffer losses in the settling or termination of the FFA. This could adversely affect our
results of operations and cash flows. As of March 31, 2021, we had no FFAs in our portfolio.
Because we generate all of our revenues in U.S. dollars but incur a portion of our expenses in other currencies, exchange rate
fluctuations could adversely affect our results of operations.
We generate all of our revenues in U.S. dollars and the majority of our expenses are also in U.S. dollars. However, a
portion of our overall expenses is incurred in other currencies, particularly Euro, Singapore Dollar, Danish Krone, Japanese Yen,
British Pound Sterling, and Norwegian Krone. Changes in the value of the U.S. dollar relative to the other currencies, in
particular the Euro, or the amount of expenses we incur in other currencies could cause fluctuations in our net income. See “Item
7A. Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Exchange Rate Risk.”
If we fail to manage our growth properly, we may incur significant expenses and losses.
As and when market conditions permit, we may prudently grow our fleet. Acquisition opportunities may arise from time
to time, and any such acquisition could be significant. Successfully consummating and integrating acquisitions will depend on:
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locating and acquiring suitable vessels at a suitable price;
identifying and completing acquisitions or joint ventures;
integrating any acquired vessels 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.
Certain acquisition and investment opportunities may not result in the consummation of a transaction and the incurrence
of certain advisory costs. Any acquisition could involve the payment by us of a substantial amount of cash, the incurrence of a
substantial amount of debt or the issuance of a substantial amount of equity. In addition, we may not be able to obtain acceptable
terms for the required financing for any such acquisition or investment that arises.
Growing a business by acquisition presents numerous risks such as undisclosed liabilities and obligations, difficulty in
obtaining additional qualified personnel, managing relationships with customers and suppliers and integrating newly acquired
vessels into existing infrastructures. Moreover, acquiring any business is subject to risks related to incorrect assumptions
regarding the future results of acquired operations or assets or expected cost reductions or other synergies expected to be realized
as a result of acquiring operations or assets.
Additionally, the expansion of our fleet may impose significant additional responsibilities on our management and staff,
including the management and staff of our in-house commercial and technical managers, and may necessitate that we increase the
number of our personnel. Further, there is the risk that we may fail to successfully and timely integrate the operations or
management of any acquired businesses or assets and the risk of diverting management's attention from existing operations or
other priorities. If we fail to consummate and integrate our acquisitions in a timely and cost-effective manner, our financial
condition, results of operations and ability to pay dividends, if any, to our shareholders could be adversely affected. Moreover,
we cannot predict the effect, if any, that any announcement or consummation of an acquisition would have on the trading price of
our common shares.
An inability to effectively time investments in and divestments of vessels could prevent the implementation of our business
strategy and negatively impact our results of operations and financial condition.
Our strategy is to own and operate a fleet large enough to provide global coverage, but not larger than what the demand
for our services can support over a longer period by both contracting newbuildings and through acquisitions and divestitures in
the second-hand market. Our business is influenced by the timing of investments and/or divestments and contracting of
newbuildings. If we are unable to identify the optimal timing of such investments, divestments or contracting of newbuildings in
relation to the shipping value cycle due to capital restraints, or otherwise, this could have a material adverse effect on our
competitive position, future performance, results of operations, cash flows and financial position.
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If our fleet grows in size, we may need to improve our operations and financial systems and recruit additional staff and crew;
if we cannot improve these systems or recruit suitable employees, our business and results of operations may be adversely
affected.
As and when market conditions permit, we intend to continue to prudently grow our fleet over the long term. We have
and may continue to have to invest in upgrading our operating and financial systems. In addition, we may have to recruit
additional well-qualified seafarers and shoreside administrative and management personnel. We may not be able to hire suitable
employees to the extent we continue to expand our fleet. Our vessels require technically skilled staff with specialized training. If
our crewing agents are unable to employ such technically skilled staff, they may not be able to adequately staff our vessels. If we
are unable to operate our financial and operations systems effectively or we are unable to recruit suitable employees as we
expand our fleet, our results of operation and our ability to expand our fleet may be adversely affected.
We may be unable to attract and retain key management personnel and other employees in the shipping industry without
incurring substantial expense, which may negatively affect the effectiveness of our management and our results of operations.
The successful development and performance of our business depends on our ability to attract and retain skilled
professionals with appropriate experience and expertise. The loss of the services of any of our senior management or key
personnel could have a material adverse effect on our business and operations.
Additionally, obtaining voyage and time charters with leading industry participants depends on a number of factors,
including the ability to man vessels with suitably experienced, high-quality masters, officers and crew. In recent years, the limited
supply of and increased demand for well-qualified crew has created upward pressure on crewing costs, which we generally bear
under our time and spot charters. Increases in crew costs may adversely affect our profitability. In addition, if we cannot retain
sufficient numbers of quality on-board seafaring personnel, our fleet utilization will decrease, which could have a material
adverse effect on our business, results of operations, cash flows and financial condition.
Our directors and officers may in the future hold direct or indirect interests in companies that compete with us.
Our directors and officers have a history of involvement in the shipping industry and some of them currently, and some
of them may in the future, directly or indirectly, hold investments in companies that compete with us. In that case, they may face
conflicts between their own interests and their obligations to us.
We cannot provide assurance that our directors and officers will not be influenced by their interests in or affiliation with
other shipping companies, or our competitors, and seek to cause us to take courses of action that might involve risks to our other
shareholders or adversely affect us or our shareholders. However, we have written policies in place to address such situations if
they arise.
Our business and operations involve inherent operating risks, and our insurance and indemnities from our customers may not
be adequate to cover potential losses from our operations.
Our vessels are subject to a variety of operational risks caused by adverse weather conditions, mechanical failures,
human error, war, terrorism, piracy, or other circumstances or events. We procure hull and machinery insurance, protection and
indemnity insurance, which includes environmental damage and pollution insurance coverage, and war risk insurance for our
fleet. While we endeavor to be adequately insured against all known risks related to the operation of our ships, there remains the
possibility that a liability may not be adequately covered and we may not be able to obtain adequate insurance coverage for our
fleet in the future. The insurers may also not pay particular claims. Even if our insurance coverage is adequate, we may not be
able to timely obtain a replacement vessel in the event of a loss. There can be no assurance that such insurance coverage will
remain available at economic rates. Furthermore, such insurance coverage will contain deductibles, limitations and exclusions,
which are standard in the shipping industry and may increase our costs or lower our revenue if applied in respect of any claim.
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We may be unable to procure adequate insurance coverage at commercially reasonable rates in the future.
We may not be able to obtain adequate insurance coverage at reasonable rates in the future during adverse insurance
market conditions. For example, more stringent environmental regulations have led in the past to increased costs for, and in the
future may result in the lack of availability of, insurance against risks of environmental damage or pollution. A marine disaster
could exceed our insurance coverage, which could harm our business, financial condition and operating results. Any uninsured or
underinsured loss could harm our business and financial condition. In addition, our insurance may be voidable by the insurers as
a result of certain of our actions, such as our vessels failing to maintain certification with applicable maritime self-regulatory
organizations.
Changes in the insurance markets attributable to terrorist attacks may also make certain types of insurance more difficult
for us to obtain. In addition, upon renewal or expiration of our current policies, the insurance that may be available to us may be
significantly more expensive than our existing coverage.
Because we obtain some of our insurance through protection and indemnity associations, we may be required to make
additional premium payments.
Although we believe we carry protection and indemnity insurance consistent with industry standards, all risks may not
be adequately insured against, and any particular claim may not be paid. Any claims covered by insurance would be subject to
deductibles, and since it is possible that a large number of claims may be brought, the aggregate amount of these deductibles
could be material. Certain of our insurance coverage is maintained through mutual protection and indemnity associations, and as
a member of such associations we may be required to make additional payments, or calls, over and above budgeted premiums if
member claims exceed association reserves. These calls will be in amounts based on our claim records, as well as the claim
records of other members of the protection and indemnity associations through which we receive insurance coverage for tort
liability, including pollution-related liability. In addition, our protection and indemnity associations may not have enough
resources to cover claims made against them. Our payment of these calls could result in significant expense to us, which could
have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.
We may incur increasing costs for the drydocking, maintenance or replacement of our vessels as they age, and, as our vessels
age, the risks associated with older vessels could adversely affect our ability to obtain profitable charters.
The drydocking of our vessels requires significant capital expenditures and loss of revenue while our vessels are
off-hire. Any significant increase in the number of days of off-hire due to such drydocking or in the costs of any repairs could
have a material adverse effect on our business, results of operations, cash flows and financial condition. Although we do not
anticipate that more than one vessel will be out of service at any given time, we may underestimate the time required to drydock
our vessels, or unanticipated problems may arise.
In addition, although all of our vessels were built within the past fifteen years, we estimate that our vessels have a useful
life of 25 years. In general, the costs of maintaining a vessel in good operating condition increase with the age of the vessel.
Older vessels are typically less fuel-efficient than more recently constructed vessels due to improvements in engine technology.
Cargo insurance rates increase with the age of a vessel, making older vessels less desirable to charterers.
As our vessels become older, we may have to replace such vessels upon the expiration of their useful lives. Unless we
maintain reserves or are able to borrow or raise funds for vessel replacement, we will be unable to replace such older vessels. The
inability to replace the vessels in our fleet upon the expiration of their useful lives could have a material adverse effect on our
business, results of operations, cash flows and financial condition. Any reserves set aside for vessel replacement will not be
available for the payment of dividends to shareholders.
If we purchase secondhand vessels, we will be exposed to increased costs which could adversely affect our earnings.
We may acquire secondhand vessels in the future, and while we typically inspect secondhand vessels prior to purchase,
such inspection does not provide us with the same knowledge about their condition that we would have had if these vessels had
been built for and operated exclusively by us. A secondhand vessel may have conditions or defects that
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we were not aware of when we bought the vessel and which may require us to incur costly repairs to the vessel. These repairs
may require us to put a vessel into drydock, which would reduce our fleet utilization and increase our operating costs.
Certain shareholders have a substantial ownership stake in us, and their interests could conflict with the interests of our other
shareholders.
According to information contained in public filings, Wellington Management Group LLP; Blackrock, Inc.; John C.
Hadjipateras, our Chief Executive Officer, President and Chairman of the Board of Directors; and Kensico Capital Management;
as of June 1, 2021, own, or may be deemed to beneficially own, 15.4%, 13.6%, 11.6%, and 10.0%, respectively, of our total
shares outstanding. John C. Hadjipateras and Kensico Capital Management are represented on our Board of Directors. As a result
of substantial ownership interest along with their or their affiliates’ participation on the Board of Directors, John C. Hadjipateras
and Kensico Capital Management (our “Principal Shareholders”) currently have the ability to influence certain actions requiring
shareholders' approval, including increasing or decreasing the authorized share capital, the election of directors, declaration of
dividends, the appointment of management, and other policy decisions. While any future transaction with our Principal
Shareholders or other significant shareholders could benefit us, their interests could at times conflict with the interests of our
other shareholders. Conflicts of interest may also arise between us and our Principal Shareholders or their affiliates, which may
result in the conclusion of transactions on terms not determined by market forces. Any such conflicts of interest could adversely
affect our business, financial condition and results of operations, and the trading price of our common shares. Moreover, the
concentration of ownership may delay, deter or prevent acts that would be favored by our other shareholders or deprive
shareholders of an opportunity to receive a premium for their shares as part of a sale of our business. Similarly, this concentration
of share ownership may adversely affect the trading price of our shares because investors may perceive disadvantages in owning
shares in a company with concentrated ownership.
United States tax authorities could treat us as a "passive foreign investment company," which could have adverse United
States federal income tax consequences to United States holders.
A foreign corporation will be treated as a PFIC for United States federal income tax purposes if either (1) at least 75%
of its gross income for any taxable year consists of "passive income" or (2) at least 50% of the average value of the corporation's
assets produce or are held for the production of "passive income." For purposes of these tests, "passive income" generally
includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents
and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes
of these tests, income derived from the performance of services generally does not constitute "passive income." United States
shareholders of a PFIC are subject to an adverse United States federal income tax regime with respect to the income derived by
the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their
shares in the PFIC.
Whether we will be treated as a PFIC for our taxable year ended March 31, 2021 and subsequent taxable years will
depend upon the nature and extent of our operations. In this regard, we intend to treat the gross income we derive from our
voyage and time chartering activities as services income, rather than rental income. Accordingly, such income should not
constitute passive income, and the assets that we own and operate in connection with the production of such income, in particular,
our vessels, should not constitute passive assets for purposes of determining whether we are a PFIC. There is substantial legal
authority supporting this position consisting of case law and the United States Internal Revenue Service, or the IRS,
pronouncements concerning the characterization of income derived from time charters as services income for other tax purposes.
However, there is also authority which characterizes time charter income as rental income rather than services income for other
tax purposes. Accordingly, no assurance can be given that the IRS or a court of law will accept this position, and there is a risk
that the IRS or a court of law could determine that we are a PFIC. In addition, although we intend to conduct our affairs in a
manner to avoid being classified as a PFIC with respect to any taxable year, we cannot assure you that the nature of our
operations will not change in the future.
For any taxable year in which we are, or were to be treated as, a PFIC, United States shareholders would face adverse
United States federal income tax consequences. Under the PFIC rules, unless a shareholder makes an election available under the
Code (which election could itself have adverse consequences for such shareholders, as discussed below
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under "Item 1. Business—Taxation—United States Federal Income Tax Considerations—United States Federal Income Taxation
of United States Holders"), excess distributions and any gain from the disposition of such shareholder's common shares would be
allocated ratably over the shareholder's holding period of the common shares and the amounts allocated to the taxable year of the
excess distribution or sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income. The
amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as
appropriate, for that taxable year, and an interest charge would be imposed with respect to such tax. See "Item 1. Taxation—
United States Federal Income Tax Considerations—United States Federal Income Taxation of United States Holders" for a more
comprehensive discussion of the United States federal income tax consequences to United States shareholders if we are treated as
a PFIC.
We may have to pay tax on United States source shipping income, which would reduce our earnings.
Under the Code, 50% of the gross shipping income of a corporation that owns or charters vessels, as we and our
subsidiaries do, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States
may be subject to a 4%, or an effective 2%, United States federal income tax without allowance for deduction, unless that
corporation qualifies for exemption from tax under Section 883 of the Code and the applicable Treasury Regulations promulgated
thereunder.
We believe that we qualify, and we expect to qualify, for exemption under Section 883 for our taxable year ended
March 31, 2021 and our subsequent taxable years and we intend to take this position for United States federal income tax return
reporting purposes. However, there are factual circumstances beyond our control that could cause us to lose the benefit of this tax
exemption and thereby become subject to United States federal income tax on our United States source shipping income. For
example, we would no longer qualify for exemption under Section 883 of the Code for a particular taxable year if certain
"non-qualified" shareholders with a 5% or greater interest in our common shares owned, in the aggregate, 50% or more of our
outstanding common shares for more than half the days during the taxable year. Due to the factual nature of the issues involved,
there can be no assurances on that we or any of our subsidiaries will qualify for exemption under Section 883 of the Code.
If we or our subsidiaries were not entitled to exemption under Section 883 of the Code for any taxable year based on our
failure to satisfy the publicly-traded test, we or our subsidiaries would be subject for such year to an effective 2% United States
federal income tax on the gross shipping income we or our subsidiaries derive during the year that is attributable to the transport
of cargoes to or from the United States. The imposition of this taxation would have a negative effect on our business and would
decrease our earnings available for distribution to our shareholders.
Risks Relating to our Industry
The cyclical nature of the demand for LPG transportation may lead to significant changes in charter rates, vessel utilization
and vessel values, which may adversely affect our revenues, profitability and financial condition.
Historically, the LPG shipping market has been cyclical with attendant volatility in profitability, charter rates and vessel
values. The degree of charter rate volatility among different types of gas carriers has varied widely. Because many factors
influencing the supply of, and demand for, vessel capacity are unpredictable, the timing, direction and degree of changes in the
LPG shipping market are also not predictable. If charter rates decline, our earnings may decrease, particularly with respect to our
vessels deployed in the spot market, including through the Helios Pool, but also with respect to our other vessels when their
charters expire, as they may not be rechartered on favorable terms when compared to the terms of the expiring charters.
Accordingly, a decline in charter rates could have an adverse effect on our revenues, profitability, liquidity, cash flow and
financial position.
Future growth in the demand for LPG carriers and charter rates will depend on economic growth in the world economy
and demand for LPG product transportation that exceeds the capacity of the growing worldwide LPG carrier fleet. We believe
that the future growth in demand for LPG carriers and the charter rate levels for LPG carriers will depend primarily upon the
supply and demand for LPG, particularly in the economies of China, India, Japan, Southeast Asia, the Middle East and the United
States and upon seasonal and regional changes in demand and changes to the capacity of the world fleet. The capacity of the
world LPG shipping fleet appears likely to increase in the near term. Economic growth
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may be limited in the near term, and possibly for an extended period, as a result of global economic conditions, or otherwise,
which could have an adverse effect on our business and results of operations.
The factors affecting the supply of and demand for LPG carriers are outside of our control, and the nature, timing and
degree of changes in industry conditions are unpredictable.
The factors that influence demand for our vessels include:
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global or regional economic, political or geopolitical conditions, including armed conflicts, terrorist activities,
embargoes, strikes, tariffs and “trade wars,” particularly in LPG consuming regions;
changes in global or general industrial activity specifically in the plastics and chemical industries;
changes in the cost of oil and natural gas from which LPG is derived;
changes in the consumption of LPG or natural gas due to availability of new, alternative energy sources or changes
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;
supply of and demand for LPG products;
the development and location of production facilities for LPG products;
regional imbalances in production and demand of LPG products;
changes in the production levels of crude oil and natural gas (including in particular production by OPEC, the
United States and other key producers) and inventories;
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the distance LPG and LPG products are to be moved by sea;
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availability of competing LPG vessels;
availability of alternative transportation means, including 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;
changes in the price of crude oil and changes to the West Texas Intermediate and Brent Crude Oil pricing
benchmarks, and changes in trade 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;
economic slowdowns caused by public health events such as the ongoing COVID-19 outbreak;
domestic and foreign tax policies;
accidents, severe weather, natural disasters and other similar incidents relating to the natural gas industry; and
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sanctions (in particular sanctions on Iran and Venezuela, among others).
The factors that influence the supply of vessel capacity include:
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the number of newbuilding deliveries (including the equivalent of 13% of the capacity of the existing LPG capable
carrier fleet expected to be delivered by the end of calendar year 2021);
the scrapping rate of older vessels;
LPG vessel prices, including financing costs and the price of steel, other raw materials and vessel equipment;
the availability of shipyards to build LPG vessels when demand is high;
changes in environmental and other regulations that may limit the useful lives of vessels;
technological advances in LPG vessel design and capacity; and
the number of vessels that are out of service.
A significant decline in demand for the seaborne transport of LPG or a significant increase in the supply of LPG vessel
capacity without a corresponding growth in LPG vessel demand could cause a significant decline in prevailing charter rates,
which could materially adversely affect our financial condition and operating results and cash flow.
Due in part to COVID-19 outbreak as well as actions by OPEC members and other oil producing countries, energy
prices declined significantly during calendar year 2020. If the energy price environment remains low for a prolonged period of
time, this could materially and adversely affect our business. In April 2020, oil, natural gas and LPG prices reached their lowest
levels since 2002. Although energy prices recovered in the last quarter of 2020 from such lows, demand for energy remains
below levels before the pandemic. A continuation of current low natural gas and LPG prices could negatively affect us in a
number of ways, including the following:
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a reduction in exploration for or development of new natural gas reserves or projects, or the delay or cancellation of
existing projects as energy companies lower their capital expenditures budgets, which may reduce our growth
opportunities;
a decrease in the expected returns relating to investments in LPG projects;
low gas prices globally and/or weak differentials between prices in the Atlantic Basin and the Pacific Basin leading to
reduced inter-basin trading of LPG and reduced demand for LPG shipping;
lower demand for the types of vessels we own and operate, which may reduce charter rates and revenue available to us
upon redeployment of our vessels following the expiration or termination of existing contracts or upon the initial
chartering of vessels;
customers potentially seeking to renegotiate or terminate existing vessel contracts, or failing to extend or renew
contracts upon expiration;
the inability or refusal of customers to make charter payments to us due to financial constraints or otherwise; or
declines in vessel values, which may result in losses to us upon vessel sales or impairment charges against our earnings
and could impact our compliance with the covenants in our loan agreements.
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Reduced demand for LPG or LPG fractionation, storage, or shipping, or any reduction or limitation in LPG production
capacity, could have a material adverse effect on prevailing charter rates or the market value of our vessels, which could have a
material adverse effect on our results of operations and financial condition.
A shift in consumer demand from LPG towards other energy sources or changes to trade patterns may have a material
adverse effect on our business.
Substantially all of our earnings are related to the LPG industry. In recent years, there has been a strong supply of
natural gas and an increase in the construction of plants and projects involving natural gas, of which LPG is a byproduct. If the
supply of natural gas decreases, we may see a concurrent reduction in LPG production and resulting lesser demand and lower
charter rates for our vessels and the vessels in the Helios Pool, which could ultimately have a material adverse impact on our
revenues, operations and future growth. Additionally, changes in environmental or other legislation establishing additional
regulation or restrictions on LPG production and transportation, including the adoption of climate change legislation or
regulations, or legislation in the United States placing additional regulation or restrictions on LPG production from shale gas
could result in reduced demand for LPG shipping.
A shift in the consumer demand from LPG towards other energy resources such as wind energy, solar energy, or water
energy will affect the demand for our LPG carriers. This could have a material adverse effect on our future performance, results
of operations, cash flows and financial position.
Seaborne trading and distribution patterns are primarily influenced by the relative advantage of the various sources of
production, locations of consumption, pricing differentials and seasonality. Changes to the trade patterns of LPG may have a
significant negative or positive impact on the demand for our vessels. This could have a material adverse effect on our future
performance, results of operations, cash flows and financial position.
The market values of our vessels may fluctuate significantly. When the market values of our vessels are low, we may incur a
loss on sale of a vessel or record an impairment charge, which may adversely affect our earnings and possibly lead to defaults
under our loan agreements or under future loan agreements we may enter into.
Vessel values are both cyclical and volatile, and may fluctuate due to a number of different factors, including general
economic and market conditions affecting the shipping industry; sophistication and condition of the vessels; types and sizes of
vessels; competition from other shipping companies; the availability of other modes of transportation; increases in the supply of
vessel capacity; charter rates; the cost and delivery of newbuildings; governmental or other regulations; supply of and demand for
LPG products; prevailing freight rates; and the need to upgrade secondhand and previously owned vessels as a result of charterer
requirements, technological advances in vessel design, equipment propulsion, overall vessel efficiency, or otherwise. In addition,
as vessels grow older, they generally decline in value.
Due to the cyclical nature of the market, if for any reason we sell any of our owned vessels at a time when prices are
depressed and before we have recorded an impairment adjustment to our financial statements, the sale may be for less than the
vessel's carrying value in our financial statements, resulting in a loss and reduction in earnings. Furthermore, if vessel values
experience significant declines and our estimated future cash flows decrease, we may have to record an impairment adjustment in
our financial statements, which could adversely affect our financial results. If the market value of our fleet declines, we may not
be in compliance with certain provisions of our loan agreements and we may not be able to refinance our debt or obtain
additional financing or pay dividends, if any. If we are unable to pledge additional collateral, our lenders could accelerate our
debt and foreclose on our vessels.
The IMO 2020 regulations have and may continue to cause us to incur substantial costs and to procure low-sulfur fuel oil
directly on the wholesale market for storage at sea and onward consumption on our vessels.
Effective January 1, 2020, the IMO implemented a new regulation for a 0.50% global sulfur cap on emissions from
vessels (the “IMO 2020 Regulations”). Under this new global cap, vessels must use marine fuels with a sulfur content of no more
than 0.50% against the former regulations specifying a maximum of 3.50% sulfur in an effort to reduce the emission of sulfur
oxide into the atmosphere.
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We have and may continue to incur costs to comply with these revised standards. Additional or new conventions, laws
and regulations may be adopted that could require, among others, the installation of expensive emission control systems and
could adversely affect our business, results of operations, cash flows and financial condition.
Currently, eleven of our technically-managed vessels are equipped with scrubbers with an additional vessel expected to
complete scrubber-fitting in June 2021 and, as of January 1, 2020, we have transitioned to burning IMO compliant fuels. We
have commitments related to scrubbers on an additional two of our VLGCs. We continue to evaluate different options in
complying with IMO and other rules and regulations. Since the implementation of the IMO 2020 Regulations five months ago,
scrubber-equipped vessels have been permitted to consume high-sulfur fuels instead of low-sulfur fuels. The effect of the
implementation of the IMO 2020 Regulations with respect to the availability of high-sulfur fuel around the world is still
uncertain; and we cannot guarantee that high-sulfur fuel will not become harder or more expensive to source as a result of such
implementation.
In the past, decreases in oil prices in the world markets have caused reduction in the fuel spreads of low-sulfur fuel,
which is more expensive than the standard marine fuel containing 3.5% sulfur content. Decrease in the spread between low-sulfur
fuel and high-sulfur fuel, or unavailability of high-sulfur fuel at ports on certain trading routes, may cause us to not be as
competitive in operating our scrubber-fitted vessels or force us to operate them with compliant fuel. Scarcity in the supply of
high-sulfur fuel, or a lower-than anticipated difference in the costs between the two types of fuel, may cause us to fail to
recognize anticipated benefits from installing scrubbers.
Fuel is a significant expense in our shipping operations when vessels are under voyage charter and is an important factor
in negotiating charter rates. Our operations and the performance of our vessels, and as a result our results of operations, face a
host of challenges. These include concerns over higher costs, international compliance, and the availability of both high and low-
sulfur fuels at key international bunkering hubs such as Singapore, Houston, Fujairah, or Rotterdam. In addition, we are taking
seriously concerns which have recently arisen in Europe that certain blends of low-sulfur fuels can emit greater amounts of
harmful black carbon than the high-sulfur fuels they are meant to replace. Costs of compliance with these and other related
regulatory changes may be significant and may have a material adverse effect on our future performance, results of operations,
cash flows and financial position. As a result, an increase in the price of fuel beyond our expectations may adversely affect our
profitability at the time of charter negotiation.
While we carry cargo insurance to protect us against certain risks of loss of or damage to the procured commodities, we
may not be adequately insured to cover any losses from such operational risks, which could have a material adverse effect on us.
Any significant uninsured or under-insured loss or liability could have a material adverse effect on our business, results of
operations, cash flows and financial condition and our available cash.
Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our
Environmental, Social and Governance (“ESG”) policies may impose additional costs on us or expose us to additional risks .
Companies across all industries are facing increasing scrutiny relating to their ESG policies. Investor advocacy groups,
certain institutional investors, investment funds, lenders and other market participants are increasingly focused on ESG practices
and in recent years have placed increasing importance on the implications and social cost of their investments. The increased
focus and activism related to ESG and similar matters may hinder access to capital, as investors and lenders may decide to
reallocate capital or to not commit capital as a result of their assessment of a company’s ESG practices. Companies which do not
adapt to or comply with investor, lender or other industry shareholder expectations and standards, which are evolving, or which
are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal
requirement to do so, may suffer from reputational damage and the business, financial condition, and/or stock price of such a
company could be materially and adversely affected. For more information with respect to our ESG efforts, please see Item 1.
Business—Our Environmental, Social and Governance Efforts.
We may face increasing pressures from investors, lenders and other market participants, who are increasingly focused
on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability. As a result,
we may be required to implement more stringent ESG procedures or standards so that our existing and future investors and
lenders remain invested in us and make further investments in us, especially given the
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highly focused and specific trade of LPG transportation in which we are engaged. If we do not meet these standards, our business
and/or our ability to access capital could be harmed. In connection with the 2015 AR Facility, the margin applicable to certain
new facilities (the “New Facilities”) may be adjusted by up to ten (10) basis points (upwards or downwards) per annum for
changes in the average efficiency ratio (“AER”) (which weighs carbon emissions for a voyage against the design deadweight of a
vessel and the distance travelled on such voyage) for the vessels in our fleet that are owned or technically managed pursuant to a
bareboat charter. (Please see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Recent Developments— Refinancing of the Commercial Tranche of the 2015 Facility).
Additionally, certain investors and lenders may exclude fossil fuel transport companies, such as us, from their investing
portfolios altogether due to environmental, social and governance factors. These limitations in both the debt and equity capital
markets may affect our ability to grow as our plans for growth may include accessing the equity and debt capital markets. If those
markets are unavailable, or if we are unable to access alternative means of financing on acceptable terms, or at all, we may be
unable to implement our business strategy, which would have a material adverse effect on our financial condition and results of
operations and impair our ability to service our indebtedness. Further, it is likely that we will incur additional costs and require
additional resources to monitor, report and comply with wide ranging ESG requirements. The occurrence of any of the foregoing
could have a material adverse effect on our business and financial condition.
General economic, political and regulatory conditions could materially adversely affect our business, financial position and
results of operations, as well as our future prospects.
The global economy remains subject to downside risks, including substantial sovereign debt burdens in countries
throughout the world, the United Kingdom’s exit from the EU, or “Brexit” (as described more fully below), continuing turmoil
and hostilities in the Middle East, Afghanistan and other geographic areas and the refugee crisis in Europe and the Middle East.
There has historically been a strong link between the development of the world economy and demand for LPG shipping.
Accordingly, an extended negative outlook for the world economy could reduce the overall demand for our services. More
specifically, LPG is used as a feedstock in cyclical businesses, such as the manufacturing of plastics and in the petrochemical
industry, that were adversely affected by the economic downturn and, accordingly, continued weakness and any further reduction
in demand in those industries could adversely affect the LPG shipping industry. In particular, an adverse change in economic
conditions affecting China, India, Japan or Southeast Asia generally could have a negative effect on the demand for LPG
products, thereby adversely affecting our business, financial position and results of operations, as well as our future prospects.
Additionally, Brexit, or similar events in other jurisdictions, could impact global markets, including foreign exchange and
securities markets; any resulting changes in currency exchange rates, tariffs, treaties and other regulatory matters could in turn
adversely impact our business and operations.
The global economy faces a number of challenges, including the effects of volatile oil prices, trade tensions between the
United States and China and between the United States and the European Union continuing turmoil and hostilities in the Middle
East, the Korean Peninsula, North Africa, Venezuela, and other geographic areas and countries, continuing threat of terrorist
attacks around the world, continuing instability and conflicts and other recent occurrences in the Middle East and in other
geographic areas and countries, continuing economic weakness in the European Union, or the E.U., and stabilizing growth in
China, as well as public health concerns stemming from the COVID-19 outbreak. The demand for energy, including oil and gas
may be negatively affected by global economic conditions.
Our ability to secure funding is dependent on well-functioning capital markets and on an appetite to provide funding to
the shipping industry. If global economic conditions continue to worsen, or if capital markets related financing is rendered less
accessible or made unavailable to the shipping industry or if lenders for any reason decide not to provide debt financing to us, we
may, among other things not be able to secure additional financing to the extent required, on acceptable terms or at all. If
additional financing is not available when needed, or is available only on unfavorable terms, we may be unable to meet our
obligations as they come due, or we may be unable to enhance our existing business, complete additional vessel acquisitions or
otherwise take advantage of business opportunities as they arise.
Credit markets in the United States and Europe have in the past experienced significant contraction, de-leveraging and
reduced liquidity, and there is a risk that the U.S. federal government and state governments and European authorities
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continue to implement a broad variety of governmental action and/or new regulation of the financial markets. Global financial
markets and economic conditions have been, and continue to be, disrupted and volatile. We face risks attendant to changes in
economic environments, changes in interest rates, and instability in the banking and securities markets around the world, among
other factors. Major market disruptions may adversely affect our business or impair our ability to borrow amounts under our
credit facilities or any future financial arrangements. In the absence of available financing, we also may be unable to take
advantage of business opportunities or respond to competitive pressures.
We face risks attendant to changes in economic environments, changes in interest rates, and instability in the banking
and securities markets around the world, among other factors. We cannot predict how long the current market conditions will last.
However, these recent and developing economic and governmental factors, may have negative effects on charter rates and vessel
values, which could in turn have a material adverse effect on our results of operations and financial condition and may cause the
price of our ordinary shares to decline.
In Europe, large sovereign debts and fiscal deficits, low growth prospects and high unemployment rates in a number of
countries have contributed to the rise of Eurosceptic parties, which would like their countries to leave the Euro. The exit of the
United Kingdom, or the U.K., from the European Union, or the EU, as described more fully below and potential new trade
policies in the United States further increase the risk of additional trade protectionism.
In China, a transformation of the Chinese economy is underway, as China moves from a production-driven economy
towards a service or consumer-driven economy. The Chinese economic transition implies that we do not expect the Chinese
economy to return to double digit GDP growth rates in the near term. Furthermore, there is a rising threat of a Chinese financial
crisis resulting from massive personal and corporate indebtedness and “trade wars.” The International Monetary Fund has warned
that continuing trade tensions, including significant tariff increases, between the United States and China, are expected to result in
a cumulative reduction in global GDP. Additionally, following the emergence of COVID-19, industrial activity in China came to
a quick halt in early 2020. The outbreak of COVID-19 has continued to be a very negative development for the Chinese economy
and has led to an economic contraction. We cannot assure you that the Chinese economy will not continue to contract in the
future.
While developments in Europe and China have been without significant immediate impact on our charter rates, an
extended period of deterioration in the world economy could reduce the overall demand for our services. Such changes could
adversely affect our future performance, results of operations, cash flows and financial position.
Further, governments may turn, and have turned, to trade barriers to protect their domestic industries against foreign
imports, thereby depressing shipping demand. For example, there have been continuing trade tensions between the United States
and China, including the imposition of tariffs by each country on certain of the other’s goods and products. During 2018 in
response to U.S. tariffs on Chinese goods, Chinese imposition of tariffs on U.S. goods included tariffs on U.S. LPG, which have
since been relaxed. On January 15, 2020, the United States and China signed a “Phase One” agreement, pursuant to which China
agreed to increase purchases and imports of U.S. goods by $200 billion over 2017 levels during between January 1, 2020 to
December 31, 2021. In connection with this agreement, the United States agreed to reduce certain tariffs and indefinitely suspend
the imposition of certain additional tariffs. While the Phase One agreement may reduce the risk of adverse effects on United
States and Chinese trade policy, the future success of the agreement is uncertain as the Biden Administration has signaled the
need to maintain political pressure on China, including with respect to perceived national security and human rights concerns,
and has also indicated that it would review the Phase One agreement. Separate from the Phase One agreement, the United States
has implemented or is considering implementing a number of policies, which may ultimately reduce trade between the United
States and China, including as in response to what have been characterized as human rights abuses in the Xinjian Uyghur
Autonomous Region. While it is not yet certain how the Biden Administration will handle each of these policies, the expectation
is that most of these measures will remain in place.
Prospective investors should consider the potential impact, uncertainty and risk associated with the development in the
wider global economy. Further economic downturn in any of these countries could have a material effect on our future
performance, results of operations, cash flows and financial position.
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The U.K.’s withdrawal from the European Union may have a negative effect on global economic conditions, financial
markets and our business.
In June 2016, a majority of voters in the U.K. elected to withdraw from the EU in a national referendum (informally
known as “Brexit”), a process that the government of the U.K. formally initiated in March 2017. Since then, the U.K. and the EU
have been negotiating the terms of a withdrawal agreement, which was approved in October 2019 and ratified in January 2020.
The U.K. formally exited the EU on January 31, 2020, although a transition period remained in place until December 2020,
during which the U.K. was subject to the rules and regulations of the EU. On December 24, 2020, the U.K. and the EU entered
into a trade and cooperation agreement (the “Trade and Cooperation Agreement”), which was applied on a provisional basis from
January 1, 2021. While the new economic relationship does not match the relationship that existed during the time the U.K. was a
member state of the EU, the Trade and Cooperation Agreement sets out preferential arrangements in certain areas such as trade in
goods and in services, digital trade and intellectual property. Negotiations between the U.K. and the EU are expected to continue
in relation to other areas which are not covered by the Trade and Cooperation Agreement. The long term effects of Brexit will
depend on the effects of the implementation and application of the Trade and Cooperation Agreement and any other relevant
agreements between the U.K. and EU.
Brexit has also given rise to calls for the governments of other EU member states to consider withdrawal. These
developments and uncertainties, or the perception that any of them may occur, have had and may continue to have a material
adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global
market liquidity and restrict the ability of key market participants to operate in certain financial markets. Any of these factors
could depress economic activity and restrict our access to capital, which could have a material adverse effect on our business and
on our consolidated financial position, results of operations and our ability to pay distributions. Additionally, Brexit or similar
events in other jurisdictions, could impact global markets, including foreign exchange and securities markets; any resulting
changes in currency exchange rates, tariffs, treaties and other regulatory matters could in turn adversely impact our business and
operations.
Brexit contributes to considerable uncertainty concerning the current and future economic environment. Brexit could
adversely affect European or worldwide political, regulatory, economic or market conditions and could contribute to instability in
global political institutions, regulatory agencies and financial markets.
The state of global financial markets and general economic conditions, as well as the perceived impact of emissions
by our vessels on the climate may adversely impact our ability to obtain financing or refinance our credit facility on
acceptable terms, which may hinder or prevent us from operating or expanding our business.
Global financial markets and economic conditions have been, and continue to be, volatile. Beginning in February 2020,
due in part to fears associated with the spread of COVID-19 (as more fully described below), global financial markets
experienced volatility and a steep and abrupt downturn followed by a recovery. Such volatility may continue as the COVID-19
pandemic continues. Credit markets and the debt and equity capital markets have been distressed and the uncertainty surrounding
the future of the global credit markets has resulted in reduced access to credit worldwide, particularly for the shipping industry.
These issues, along with significant write-offs in the financial services sector, the re-pricing of credit risk and the uncertain
economic conditions, have made, and may continue to make, it difficult to obtain additional financing. The current state of global
financial markets and current economic conditions might adversely impact our ability to issue additional equity at prices that will
not be dilutive to our existing shareholders or preclude us from issuing equity at all. Economic conditions may also adversely
affect the market price of our common shares.
Also, as a result of concerns about the stability of financial markets generally, and the solvency of counterparties
specifically, the availability and cost of obtaining money from the public and private equity and debt markets has become more
difficult. Many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existing debt at all or
on terms similar to current debt, and reduced, and in some cases ceased, to provide funding to borrowers and other market
participants, including equity and debt investors, and some have been unwilling to invest on attractive terms or even at all. Due to
these factors, we cannot be certain that financing will be available if needed and to the extent required, or that we will be able to
refinance our existing and future credit facilities, on acceptable terms or at all. If financing or
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refinancing is not available when needed, or is available only on unfavorable terms, we may be unable to meet our obligations as
they come due or we may be unable to enhance our existing business, complete additional vessel acquisitions or otherwise take
advantage of business opportunities as they arise.
In 2019, a number of leading lenders to the shipping industry and other industry participants announced a global
framework by which financial institutions can assess the climate alignment of their ship finance portfolios, called the Poseidon
Principles, and additional lenders have subsequently announced their intention to adhere to such principles. If the ships in our
fleet are deemed not to satisfy the emissions and other sustainability standards contemplated by the Poseidon Principles, the
availability and cost of bank financing for such vessels may be adversely affected.
Our operating results are subject to seasonal fluctuations, which could affect our operating results and the amount of
available cash with which we can pay dividends or repurchase our common stock .
We operate our LPG carriers in markets that have historically exhibited seasonal variations in demand and, as a result,
in charter hire rates. The LPG shipping market is typically stronger in the spring and summer months in anticipation of increased
consumption of propane and butane for heating during the winter months, although 12-month time charter rates tend to smooth
out these short-term fluctuations and recent LPG shipping market activity has not yielded the expected seasonal results. In
addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and supplies of certain commodities.
As a result, our revenues may be stronger in fiscal quarters ended June 30 and September 30, and conversely, our revenues may
be weaker during the fiscal quarters ended December 31 and March 31. This seasonality could materially affect our quarterly
operating results.
Future technological innovation could reduce our charter hire income and the value of our vessels.
The charter hire rates and the value and operational life of a vessel are determined by a number of factors including the
vessel's efficiency, operational flexibility and physical life. Efficiency includes speed, fuel type and economy and the ability to
load and discharge cargo quickly. Flexibility includes the ability to enter harbors, utilize related docking facilities and pass
through canals and straits. The length of a vessel's physical life is related to its original design and construction, its maintenance
and the impact of the stress of operations. We believe that our fleet is among the youngest and most eco-friendly fleet of all our
competitors. However, if new LPG carriers are built that are more efficient and environmentally friendly or more flexible or have
longer physical lives than our vessels, competition from these more technologically advanced vessels could adversely affect the
amount of charter hire payments we receive for our vessels and the resale value of our vessels could significantly decrease.
Similarly, if the vessels of the other participants in the Helios Pool fleet become outdated, the amount of charter hire payments to
the Helios Pool may be adversely affected. As a result of the foregoing, our results of operations and financial condition could be
adversely affected.
Changes in fuel, or bunker, prices may adversely affect profits.
While we do not bear the cost of fuel, or bunkers, under time charters, including for our vessels employed on time
charters through the Helios Pool, fuel is a significant expense in our shipping operations when vessels are off-hire or deployed
under spot charters. Changes in the price of fuel may adversely affect our profitability. The price and supply of fuel is
unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil
and gas, actions by the Organization of Petroleum Exporting Countries and other oil and gas producers, war and unrest in oil
producing countries and regions, regional production patterns and environmental concerns. Further, fuel may become much more
expensive in the future, including as a result of the IMO 2020 Cap, which may reduce profitability.
We are subject to regulation and liability, including environmental laws, which could require significant expenditures and
adversely affect our financial conditions and results of operations.
Our business and the operation of our VLGCs are subject to complex laws and regulations and materially affected by
government regulation, including environmental regulations in the form of international conventions and national, state and local
laws and regulations in force in the jurisdictions in which the vessels operate, as well as in the country or countries in which the
vessels operate, as well as in the country or countries of their registration.
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These regulations include, but are not limited to OPA90 that establishes an extensive regulatory and liability regime for
the protection and cleanup of the environment from oil spills and applies to any discharges of oil from a vessel, including
discharges of fuel oil and lubricants, the CAA, the CWA, and requirements of the USCG and the EPA, and the MTSA, and
regulations of the IMO, including MARPOL, the Bunker Convention, the IMO International Convention of Load Lines of 1966,
as from time to time amended, and the SOLAS Convention. To comply with these and other regulations we may be required to
incur additional costs to modify our vessels, meet new operating maintenance and inspection requirements, develop contingency
plans for potential spills, and obtain insurance coverage. We are also required by various governmental and quasi-governmental
agencies to obtain permits, licenses, certificates and financial assurances with respect to our operations. These permits, licenses,
certificates and financial assurances may be issued or renewed with terms that could materially and adversely affect our
operations. Because these laws and regulations are often revised, we cannot predict the ultimate cost of complying with them or
the impact they may have on the resale prices or useful lives of our vessels. However, a failure to comply with applicable laws
and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our
operations. Additional laws and regulations may be adopted which could limit our ability to do business or increase the cost of
our doing business and which could materially adversely affect our operations. For example, a future serious incident, such as the
April 2010 Deepwater Horizon oil spill in the Gulf of Mexico may result in new regulatory initiatives.
The operation of our vessels is affected by the requirements set forth in the ISM Code. The ISM Code requires ship
owners and bareboat charterers to develop and maintain an extensive "Safety Management System" that includes, among other
things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation
and describing procedures for dealing with emergencies. The failure of a ship owner or bareboat charterer to comply with the
ISM Code may subject the owner or charterer to increased liability, may decrease available insurance coverage for the affected
vessels, or may result in a denial of access to, or detention in, certain ports. In our case, noncompliance with the ISM Code may
result in breach of our loan covenants. Currently, each of the vessels in our fleet is ISM Code certified. Because these
certifications are critical to our business, we place a high priority on maintaining them. Nonetheless, there is the possibility that
such certifications may not be renewed.
We currently maintain, for each of our vessels, pollution liability insurance coverage in the amount of $1.0 billion per
incident. In addition, we carry hull and machinery and protection and indemnity insurance to cover the risks of fire and explosion.
Under certain circumstances, fire and explosion could result in a catastrophic loss. We believe that our present insurance
coverage is adequate, but not all risks can be insured, and there is the possibility that any specific claim may not be paid, or that
we will not always be able to obtain adequate insurance coverage at reasonable rates. If the damages from a catastrophic spill
exceeded our insurance coverage, the effect on our business would be severe and could possibly result in our insolvency.
Recent action by the IMO’s Maritime Safety Committee and United States agencies indicates that cybersecurity
regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity
threats. For example, cyber-risk management systems must be incorporated by ship-owners and managers by 2021. This might
cause companies to create additional procedures for monitoring cybersecurity, which could require additional expenses and/or
capital expenditures. However, the impact of such regulations is hard to predict at this time.
The IMO has imposed updated guidelines for ballast water management systems specifying the maximum amount of
viable organisms allowed to be discharged from a vessel’s ballast water. Depending on the date of the IOPP renewal survey,
existing vessels constructed before September 8, 2017 must comply with the updated D-2 standard on or after September 8, 2019.
For most vessels, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate
unwanted organisms. Ships constructed on or after September 8, 2017 are to comply with the D-2 standards on or after
September 8, 2017. Currently, nineteen of our VLGCs are in compliance with the updated guidelines. Ballast water management
systems, or BWMS, are expected to be installed on the remaining three VLGCs during their next drydock between November
2021 and July 2024 for approximately $0.8 million per vessel. Costs of compliance may be substantial and adversely affect our
revenues and profitability.
Furthermore, United States regulations are currently changing. Although the 2013 Vessel General Permit (“VGP”)
program and U.S. National Invasive Species Act (“NISA”) are currently in effect to regulate ballast discharge,
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exchange and installation, the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December 4, 2018,
requires that the EPA develop national standards of performance for approximately 30 discharges, similar to those found in the
VGP within two years. On October 26, 2020, the EPA published a Notice of Proposed Rulemaking for Vessel Incidental
Discharge National Standards of Performance under VIDA. By approximately 2022, the U.S. Coast Guard must develop
corresponding implementation, compliance and enforcement regulations regarding ballast water. The new regulations could
require the installation of new equipment, which may cause us to incur substantial costs.
We believe that regulation of the shipping industry will continue to become more stringent and compliance with such
new regulations will be more expensive for us and our competitors. Substantial violations of applicable requirements or a
catastrophic release from one of our vessels could have a material adverse impact on our financial condition and results of
operations.
Climate change and greenhouse gas restrictions may adversely impact our operations and markets.
Due to concern over the risk of climate change, a number of countries and the IMO have adopted, or are considering the
adoption of, regulatory frameworks to reduce greenhouse gas emissions. These regulatory measures may include, among others,
adoption of cap and trade regimes, carbon taxes, increased efficiency standards, and incentives or mandates for renewable energy.
Compliance with changes in laws, regulations and obligations relating to climate change could increase our costs related to
operating and maintaining our vessels and require us to install new emission controls, acquire allowances or pay taxes related to
our greenhouse gas emissions, or administer and manage a greenhouse gas emissions program. Revenue generation and strategic
growth opportunities could also be adversely affected by compliance with such changes. Additionally, increased regulation of
greenhouse gas emissions may incentivize use of alternative energy sources. Unless and until such regulations are implemented
and their effects are known, we cannot reasonably or reliably estimate their impact on our financial condition, results of
operations and ability to compete. However, any long-term material adverse effect on the LPG industry may adversely affect our
financial condition, results of operations and cash flows.
We operate globally, including in countries, states and regions where our businesses, and the activities our consumer
customers, could be negatively impacted by climate change. Climate change presents both immediate and long-term risks to us
and our customers, with the risks expected to increase over time. Climate risks can arise from physical risks (acute or chronic
risks related to the physical effects of climate change) and transition risks (risks related to regulatory and legal, technological,
market and reputational changes from a transition to a low-carbon economy). Physical risks could damage or destroy our or our
customers’ and clients’ properties and other assets and disrupt our or their operations. For example, climate change may lead to
more extreme weather events occurring more often which may result in physical damage and additional volatility within our
business operations and potential counterparty exposures and other financial risks. Transition risks may result in changes in
regulations or market preferences, which in turn could have negative impacts on our results of operation or the reputation of us
and our customers. For example, carbon-intensive industries like LPG are exposed to climate risks, such as those risks related to
the transition to a low-carbon economy, as well as low-carbon industries that may be subject to risks associated with new
technologies. Ongoing legislative or regulatory uncertainties and changes regarding climate risk management and practices may
result in higher regulatory, compliance, credit and reputational risks and costs.
If our vessels call on ports located in countries or territories that are subject to sanctions or embargoes imposed by the United
States or other authorities, it could lead to monetary fines or penalties and/or adversely affect our reputation and the market
for our common shares.
Since January 1, 2010, none of our vessels has called on ports located in countries or territories subject to country-wide
or territory-wide sanctions and/or embargoes imposed by the U.S. government or other authorities or countries identified by the
U.S. government or other authorities as state sponsors of terrorism, (“Sanctioned Jurisdictions”). Although we do not expect that
our vessels will call on ports located in Sanctioned Jurisdictions and we endeavor to take precautions reasonably designed to
mitigate such activities, including relevant trade exclusion clauses in our charter contracts forbidding the use of our vessels in
trade that would be in violation economic sanctions, it is possible that on charterers’ instructions, and without our consent, our
vessels may call on ports located in such countries or territories in the future. If
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such activities result in a sanctions violation, we could be subject to monetary fines, penalties, or other sanctions, and our
reputation and the market for our common shares could be adversely affected.
Sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered
persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened
over time. Current or future counterparties of ours may be affiliated with persons or entities that are or may be in the future the
subject of sanctions imposed by the U.S. administration, the EU, and/or other international bodies. If we determine that such
sanctions require us to terminate existing or future contracts to which we or our subsidiaries are party or if we are found to be in
violation of such applicable sanctions, our results of operations may be adversely affected, we could face monetary fines,
penalties, or other sanctions, and we may suffer reputational harm.
Additionally, although we believe that we have been in compliance with all applicable sanctions and embargo laws and
regulations, and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future,
particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation could
result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our
business, and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. In addition,
certain institutional investors may have investment policies or restrictions that prevent them from holding securities of companies
that have contracts with countries identified by the U.S. government as state sponsors of terrorism. The determination by these
investors not to invest in, or to divest from, our common units may adversely affect the price at which our common units trade.
Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not
involve us or our vessels, and those violations could in turn negatively affect our reputation. Investor perception of the value of
our common units may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental
actions in these and surrounding countries or territories. In addition, charterers and other parties that we have previously entered
into contracts with regarding our vessels may be affiliated with persons or entities that are now or may in the future be the subject
of sanctions or embargo laws imposed by the U.S. and other applicable governmental bodies. If we determine that such sanctions
require us to terminate existing contracts or if we are found to be in violation of such sanctions or embargo laws, we may suffer
reputational harm and our results of operations may be adversely affected.
Our vessels are subject to periodic inspections.
The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country
of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and
regulations of the country of registry of the vessel and SOLAS. Most insurance underwriters make it a condition for insurance
coverage and lending that a vessel be certified “in class” by a classification society which is a member of the International
Association of Classification Societies, the IACS. The IACS has adopted harmonized Common Structural Rules, or “the Rules,”
which apply to oil tankers and bulk carriers contracted for construction on or after July 1, 2015. The Rules attempt to create a
level of consistency between IACS Societies. Our technically-managed VLGCs are currently classed with either Lloyd's Register,
ABS or Det Norske Veritas.
A vessel must undergo annual surveys, intermediate surveys, drydockings, and special surveys. In lieu of a special
survey, a vessel's machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically
over a five-year period. Our vessels are on special survey cycles for hull inspection and continuous survey cycles for machinery
inspection. Every vessel is also required to be drydocked every 30 to 36 months for inspection of the underwater parts of such
vessel. However, for vessels not exceeding 15 years that have means to facilitate underwater inspection in lieu of drydocking, the
drydocking can be skipped and be conducted concurrently with the special survey. Certain cargo vessels that meet the system
requirements set by classification societies may qualify for extended drydocking, which extends the 5-year period to 7.5 years, by
replacing certain dry-dockings with in-water surveys.
Our vessels also undergo inspections with a view towards compliance under the SIRE and USCG requirements, as
applicable. If a vessel does not maintain its class and/or fails any annual survey, intermediate survey, dry-docking, or special
survey, the vessel will be unable to carry cargo between ports and will be unemployable and uninsurable, which would cause us
to be in violation of covenants in our loan agreements and insurance contracts or other financing arrangements. This would
adversely impact our operations and revenues.
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Maritime claimants could arrest our vessels, which could interrupt our cash flow.
Crew members, suppliers of goods and services to a vessel, shippers of cargo and others may be entitled to a maritime
lien against that vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien
by arresting or attaching a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could
interrupt our cash flow and require us to pay large sums of funds to have the arrest lifted.
In addition, in some jurisdictions, such as South Africa, under the "sister ship" theory of liability, a claimant may arrest
both the vessel which is subject to the claimant's maritime lien and any "associated" vessel, which is any vessel owned or
controlled by the same owner. Claimants could try to assert "sister ship" liability against one vessel in our fleet for claims relating
to another of our ships or, possibly, another vessel managed by one of our shareholders holding more than 5% of our common
shares or entities affiliated with them.
Governments could requisition our vessels during a period of war or emergency, resulting in loss of revenues.
The government of a vessel's registry could requisition for title or seize our vessels. Requisition for title occurs when a
government takes control of a vessel and becomes the owner. A government could also requisition our vessels for hire.
Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter
rates. Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of our vessels
could have a material adverse effect on our business, results of operations, cash flows and financial condition.
The operation of ocean-going vessels is inherently risky, and an incident resulting in significant loss or environmental
consequences involving any of our vessels could harm our reputation and business.
The operation of an ocean-going vessel carries inherent risks. Our vessels and their cargoes are at risk of being damaged
or lost because of events such as marine disasters, bad weather, mechanical failures, grounding, fire, explosions, collisions,
human error, war, terrorism, piracy, cargo loss, latent defects, acts of God and other circumstances or events. Changing
economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to time
resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. Damage to the environment
could also result from our operations, particularly through spillage of fuel, lubricants or other chemicals and substances used in
operations, or extensive uncontrolled fires. These hazards may result in death or injury to persons, loss of revenues or property,
environmental damage, higher insurance rates, damage to our customer relationships, market disruptions, delay or rerouting, any
of which may also subject us to litigation. As a result, we could be exposed to substantial liabilities not recoverable under our
insurances. Further, the involvement of our vessels in a serious accident could harm our reputation as a safe and reliable vessel
operator and lead to a loss of business.
If our vessels suffer damage, they may need to be repaired at a dry docking facility and in certain instances such damage
may result in lost revenues under and in certain cases the termination of the employment contract under which such vessel is
operating. The costs of drydock repairs are unpredictable and may be substantial. We may have to pay drydocking costs that our
insurance does not cover at all or in full. The loss of earnings while these vessels are being repaired and repositioned, as well as
the actual cost of these repairs, may adversely affect our business and financial condition. In addition, space at drydocking
facilities is sometimes limited and not all drydocking facilities are conveniently located. We may be unable to find space at a
suitable drydocking facility or our vessels may be forced to travel to a drydocking facility that is not conveniently located to our
vessels' positions. The loss of earnings while these vessels are forced to wait for space or to travel or be towed to more distant
drydocking facilities may adversely affect our business, financial condition, results of operations and cash flows.
We may be subject to litigation that could have an adverse effect on our business and financial condition.
We are currently not involved in any litigation matters that are expected to have a material adverse effect on our
business or financial condition. Nevertheless, we anticipate that we could be involved in litigation matters from time to time in
the future. The operating hazards inherent in our business expose us to litigation, including personal injury litigation,
environmental litigation, contractual litigation with clients, intellectual property litigation, tax or securities
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litigation, and maritime lawsuits including the possible arrest of our vessels. We cannot predict with certainty the outcome or
effect of any claim or other litigation matter. Any future litigation may have an adverse effect on our business, financial position,
results of operations and our ability to pay dividends, because of potential negative outcomes, the costs associated with
prosecuting or defending such lawsuits, and the diversion of management's attention to these matters. Additionally, our insurance
may not be applicable or sufficient to cover the related costs in all cases or our insurers may not remain solvent.
Acts of piracy on ocean-going vessels could adversely affect our business.
Acts of piracy have historically affected ocean-going vessels. At present, most piracy and armed robbery incidents are
recurrent in the Gulf of Aden region off the coast of Somalia, South China Sea, Sulu Sea and Celebes Sea and in particular the
Gulf of Guinea region off Nigeria, which experienced increased incidents of piracy in 2019. Sea piracy incidents continue to
occur. If these piracy attacks occur in regions in which our vessels are deployed and are characterized by insurers as "war risk"
zones or Joint War Committee "war and strikes" listed areas, premiums payable for such coverage, for which we are responsible
with respect to vessels employed on spot charters, but not vessels employed on bareboat or time charters, could increase
significantly and such insurance coverage may be more difficult to obtain. In addition, costs to employ onboard security guards
could increase in such circumstances. We may not be adequately insured to cover losses from these incidents, which could have a
material adverse effect on us. In addition, detention hijacking as a result of an act of piracy against our vessels, or an increase in
cost, or unavailability of insurance for our vessels, could have a material adverse impact on our business, financial condition and
results of operations.
Our operations outside the United States expose us to global risks, such as political conflict, terrorism and public health
threats, which may interfere with the operation of our vessels and could have a material adverse impact on our operating
results, revenues and costs.
We are an international company and primarily conduct our operations outside the United States. Changing economic,
political and governmental conditions in the countries where we are engaged in business or where our vessels are registered affect
us. In the past, political conflicts have resulted in attacks on vessels or other petroleum-related infrastructures, mining of
waterways and other efforts to disrupt shipping. Continuing conflicts, instability and other recent developments in the Middle
East and elsewhere, including tensions between the United States and Iran which in January 2020 escalated into a U.S. airstrike in
Baghdad that killed a high-ranking Iranian general. and prior attacks involving vessels and vessel seizures in the Strait of Hormuz
and off the coast of Gibraltar, the prior attack on an Iranian tanker near the Saudi Arabian port city of Jeddah and the presence of
U.S. or other armed forces in Afghanistan, may lead to additional acts of terrorism or armed conflict around the world, and our
vessels may face higher risks of being attacked or detained, or shipping routes transited by our vessels, such as the Strait of
Hormuz, may be otherwise disrupted. In addition, future hostilities or other political instability in regions where our vessels trade
could affect our trade patterns and adversely affect our operations and performance. Further hostilities in or closure of major
waterways in the Middle East, Black Sea, or South China Sea region could adversely affect the availability of and demand for
crude oil and petroleum products, as well as LPG, and negatively affect our investment and our customers' investment decisions
over an extended period of time. In addition, sanctions against oil exporting countries such as Iran, Russia, Sudan and Syria may
also impact the availability of crude oil, petroleum products and LPG would increase the availability of applicable vessels thereby
negatively impacting charter rates.
Terrorist attacks, or the perception that LPG or natural gas facilities or oil refineries and LPG carriers are potential
terrorist targets, could materially and adversely affect the continued supply of LPG. Concern that LPG and natural gas facilities
may be targeted for attack by terrorists has contributed to a significant community and environmental resistance to the
construction of a number of natural gas facilities, primarily in North America. If a terrorist incident involving a gas facility or gas
carrier did occur, the incident may adversely affect necessary LPG facilities or natural gas facilities currently in operation.
Furthermore, future terrorist attacks could result in increased volatility of the financial markets in the United States and globally
and could result in an economic recession in the United States or the world.
In addition, public health threats, such as the coronavirus, influenza and other highly communicable diseases or viruses,
outbreaks of which have from time to time occurred in various parts of the world in which we operate could adversely impact our
operations, and the operations of our customers.
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Any of these occurrences and related consequences could have a material adverse impact on our operating results,
revenues and costs.
The novel coronavirus (COVID-19) pandemic is dynamic and expanding and has negatively affected the shipping and energy
industries. The continuation of this outbreak likely would have, and the emergence of other epidemic or pandemic crises
could have, material adverse effects on our business, results of operations, or financial condition.
Since the beginning of calendar year 2020, the outbreak of COVID-19 pandemic has negatively affected economic
conditions, the supply chain, the labor market, the demand for certain shipped goods regionally as well as globally and may
otherwise impact our operations and the operations of our customers and suppliers. The COVID-19 pandemic resulted in
numerous actions taken by governments and governmental agencies in an attempt to mitigate the spread of the virus, including
travel bans, quarantines, and other emergency public health measures, and a number of countries implemented lockdown
measures. These measures have resulted in a significant reduction in global economic activity and extreme volatility in the global
financial markets. If the COVID-19 pandemic continues on a prolonged basis or becomes more severe, the adverse impact on the
global economy and the rate environment for tankers, containerships, dry bulk and other cargo vessels may deteriorate further
and our operations and cash flows may be negatively impacted. The extent of COVID-19’s impact on our financial and
operational results, which could be material, will depend on the length of time that the pandemic continues and whether
subsequent waves of the infection happen. Uncertainties regarding the economic impact of the COVID-19 pandemic are likely to
result in sustained market turmoil, which could also negatively impact our business, financial condition and cash flows.
Governments are approving large stimulus packages to mitigate the effects of the sudden decline in economic activity caused by
the pandemic; however, we cannot predict the extent to which these measures will be sufficient to restore or sustain the business
and financial condition of companies in the shipping industry. These measures, though contemplated to be temporary in nature,
may continue and increase as countries attempt to contain the outbreak or any reoccurrences thereof.
At this stage, it is difficult to determine the full impact of COVID-19 on our business. Effects of the current pandemic have
or may include, among others:
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deterioration of worldwide, regional or national economic conditions and activity, and of demand for global demand for
LPG, demand for our services, and charter and spot rates;
disruptions to our operations as a result of the potential health impact on our employees and crew, and on the
workforces of our customers and business partners;
disruptions to our business from, or additional costs related to, new regulations, directives or practices implemented in
response to the pandemic, such as travel restrictions (including for any of our onshore personnel or any of our crew
members to timely embark or disembark from our vessels), increased inspection regimes, hygiene measures (such as
quarantining and physical distancing) or increased implementation of remote working arrangements;
potential shortages or a lack of access to required spare parts for our vessels, or potential delays in any repairs to, or
scheduled or unscheduled maintenance or modifications or dry docking of, our vessels, as a result of a lack of berths
available by shipyards from a shortage in labor or due to other business disruptions, as evidenced by the approximately
60-day delay in drydock experienced by one of our vessels in China;
delays in vessel inspections and related certifications by class societies, customers or government agencies;
potential for reduced cash flows and financial condition, including potential liquidity constraints;
reduced access to capital, including the ability to refinance any existing obligations, as a result of any credit tightening
generally or due to continued declines in global financial markets, including to the prices of publicly-traded securities of
us, our peers and of listed companies generally;
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a reduced ability to opportunistically sell any of our LPG vessels on the second-hand market, either as a result of
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a lack of buyers or a general decline in the value of second-hand vessels;
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a decline in the market value of our vessels, which may cause us to (a) incur impairment charges or (b) breach certain
covenants under our financing agreements;
disruptions, delays or cancellations (i) in the construction of new LPG projects by our customers or export facility
operators, which could limit or adversely affect the demand for our vessels or our ability to pursue future growth
opportunities and (ii) in connection with among others, vessel special surveys, installation of ballast water systems and
scrubber installations, which could increase our off-hire time and decrease revenues; and
potential deterioration in the financial condition and prospects of our customers or joint venture partners, which could
adversely impact their ability or willingness to fulfill their obligations to us, or attempts by customers or third parties to
renegotiate existing agreements or invoke force majeure contractual clauses as a result of delays or other disruptions, in
each such event in accordance with the terms and conditions of the respective contract.
The COVID-19 pandemic and measures to contain its spread have negatively impacted regional and global economies
and trade patterns in markets in which we operate, the way we operate our business, and the businesses of our charterers and
suppliers. These negative impacts could continue or worsen, even after the pandemic itself diminishes or ends. Companies,
including us, have also taken precautions, such as requiring employees to work remotely and imposing travel restrictions, while
some other businesses have been required to close entirely. Moreover, we face significant risks to our personnel and operations
due to the COVID-19 pandemic. Our crews face risk of exposure to COVID-19 as a result of travel to ports in which cases of
COVID-19 have been reported. Our shore-based personnel likewise face risk of such exposure, as we maintain offices in areas
that have been impacted by the spread of COVID-19.
Measures against COVID-19 in a number of countries have restricted crew rotations on our vessels, which may continue
or become more severe. As a result, in the fiscal year ended March 31, 2021, we experienced and may continue to experience
disruptions to our normal vessel operations caused by increased deviation time associated with positioning our vessels to
countries in which we can undertake a crew rotation in compliance with such measures. Delays in crew rotations have led to
issues with crew fatigue and may continue to do so, which may result in delays or other operational issues. We have had and
expect to continue to have increased expenses due to incremental fuel consumption in order to deviate to certain ports on which
we would ordinarily not call during a typical voyage and days in port during which our vessels are unable to earn revenue in
order to deviate to certain ports on which we would ordinarily not call during a typical voyage. We may also incur additional
expenses associated with testing, personal protective equipment, quarantines, and travel expenses such as airfare costs in order to
perform crew rotations in the current environment. In the year ended March 31, 2021, delays in crew rotations have also caused
us to incur additional costs related to crew bonuses paid to retain existing crew members and may continue to do so.
Organizations across industries, including ours, are rightly focusing on their employees' well-being, whilst making sure
that their operations continue undisrupted and at the same time, adapting to the new ways of operating. As such employees are
encouraged or even required to operate remotely which significantly increases the risk of cyber security attacks, although we take
many precautions to mitigate such risks.
Further, containment measures and quarantine restrictions adopted by many countries worldwide have caused
significant impact on our ability to embark and disembark crew members and on our seafarers themselves. As a result, since the
outbreak of COVID-19 and as of the date of this report, we have encountered certain prolonged delays and surrounding
complexities in embarking and disembarking crew onto our ships which further resulted in increased operational costs and
decreased revenues by reason of off-hires associated with crew rotation and related logistical complications associated with
supplying our vessels with spares or other supplies.
The occurrence or continued occurrence of any of the foregoing events or other epidemics or an increase in the severity
or duration of the COVID-19 or other epidemics could have a material adverse effect on our business, results of operations, cash
flows, financial condition, and value of our vessels.
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If labor or other interruptions are not resolved in a timely manner, such interruptions could have a material adverse effect on
our financial condition.
We employ masters, officers and crews to man our vessels. If not resolved in a timely and cost-effective manner,
industrial action or other labor unrest or any other interruption arising from incidents of whistleblowing whether proven or not,
could prevent or hinder our operations from being carried out as we expect and could have a material adverse effect on our
business, financial condition, results of operations, and cash flows.
Information technology failures and data security breaches, including as a result of cybersecurity attacks, could negatively
impact our results of operations and financial condition, subject us to increased operating costs, and expose us to litigation.
We rely on our computer systems and network infrastructure across our operations, including on our vessels. Despite
our implementation of security and back-up measures, all of our technology systems are vulnerable to damage, disability or
failures due to physical theft, fire, power loss, telecommunications failure, operational error, or other catastrophic events. Our
technology systems are also subject to cybersecurity attacks including malware, other malicious software, phishing email attacks,
attempts to gain unauthorized access to our data, the unauthorized release, corruption or loss of our data, loss or damage to our
data delivery systems, and other electronic security breaches. In addition, as we continue to grow the volume of transactions in
our businesses, our existing IT systems infrastructure, applications and related functionality may be unable to effectively support
a larger scale operation, which can cause the information being processed to be unreliable and impact our decision-making or
damage our reputation with customers.
Despite our efforts to ensure the integrity of our systems and prevent future cybersecurity attacks, it is possible that our
business, financial and other systems could be compromised, especially because such attacks can originate from a wide variety of
sources including persons involved in organized crime or associated with external service providers. Those parties may also
attempt to fraudulently induce employees, customers or other users of our systems to disclose sensitive information in order to
gain access to our data or use electronic means to induce the company to enter into fraudulent transactions. A successful cyber-
attack could materially disrupt our operations, including the safety of our vessel operations. Past and future occurrences of such
attacks could damage our reputation and our ability to conduct our business, impact our credit and risk exposure decisions, cause
us to lose customers or revenues, subject us to litigation and require us to incur significant expense to address and remediate or
otherwise resolve these issues, which could have a material adverse effect on our business, financial condition, results of
operations and cash flows.
Further, data protection laws apply to us in certain countries in which we do business. Specifically, the EU General Data
Protection Regulation, or GDPR, which was applicable beginning May 2018, increases penalties up to a maximum of 4% of
global annual turnover for breach of the regulation. The GDPR requires mandatory breach notification, the standard for which is
also followed outside the EU (particularly in Asia). Non-compliance with data protection laws could expose us to regulatory
investigations, which could result in fines and penalties. In addition to imposing fines, regulators may also issue orders to stop
processing personal data, which could disrupt operations. We could also be subject to litigation from persons or corporations
allegedly affected by data protection violations. Violation of data protection laws is a criminal offence in some countries, and
individuals can be imprisoned or fined. Any violation of these laws or harm to our reputation could have a material adverse effect
on our earnings, cash flows and financial condition.
Risks Relating to Our Common Shares
The price of our common shares has fluctuated in the past, has recently been volatile and may be volatile in the future, and as
a result, investors in our common shares could incur substantial losses.
Our stock price has fluctuated in the past, has recently been volatile and may be volatile in the future without any
discernable announcements or developments by the company or third parties to substantiate the movement of our stock price. Our
stock prices may experience rapid and substantial decreases or increases in the foreseeable future that are unrelated to our
operating performance or prospects. In addition, the ongoing outbreak of the novel COVID-19 virus has caused broad stock
market and industry fluctuations. The stock market in general and the market for shipping companies in particular have
experienced extreme volatility that has often been unrelated to the operating performance of particular
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companies. As a result of this volatility, investors may experience substantial losses on their investment in our common shares.
The market price for our common shares may be influenced by many factors, including the following:
●
●
●
●
●
●
●
●
●
●
investor reaction to our business strategy;
our continued compliance with the listing standards of the NYSE;
regulatory or legal developments in the United States and other countries, especially changes in laws or regulations
applicable to our industry;
variations in our financial results or those of companies that are perceived to be similar to us;
our ability or inability to raise additional capital and the terms on which we raise it;
declines in the market prices of stocks generally;
trading volume of our common shares;
sales of our common shares by us or our stockholders;
general economic, industry and market conditions; and
other events or factors, including those resulting from such events, or the prospect of such events, including war,
terrorism and other international conflicts, public health issues including health epidemics or pandemics, such as the
ongoing COVID-19 pandemic, adverse weather and climate conditions could disrupt our operations or result in political
or economic instability.
These broad market and industry factors may seriously harm the market price of our common shares, regardless of our
operating performance, and may be inconsistent with any improvements in actual or expected operating performance, financial
condition or other indicators of value. Since the stock price of our common shares has fluctuated in the past, has been recently
volatile and may be volatile in the future, investors in our common shares could incur substantial losses. In the past, following
periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if
instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could
materially and adversely affect our business, financial condition, results of operations and growth prospects. There can be no
guarantee that our stock price will remain at current prices.
Additionally, recently, securities of certain companies have experienced significant and extreme volatility in stock price
due short sellers of shares of common shares, known as a “short squeeze”. These short squeezes have caused extreme volatility in
those companies and in the market and have led to the price per share of those companies to trade at a significantly inflated rate
that is disconnected from the underlying value of the company. Many investors who have purchased shares in those companies at
an inflated rate face the risk of losing a significant portion of their original investment as the price per share has declined steadily
as interest in those stocks have abated. While we have no reason to believe our shares would be the target of a short squeeze,
there can be no assurance that we will not be in the future, and you may lose a significant portion or all of your investment if you
purchase our shares at a rate that is significantly disconnected from our underlying value.
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Although we have initiated a stock repurchase program, we cannot assure you that we will continue to repurchase shares or
that we will repurchase shares at favorable prices.
On August 5, 2019, our Board of Directors authorized the repurchase of up to $50.0 million of our common shares
through the period ended December 31, 2020 (the “Common Share Repurchase Program”). On February 3, 2020, our Board of
Directors authorized an increase to our Common Share Repurchase Program to repurchase up to an additional $50.0 million of
our common shares. On December 29, 2020, our Board of Directors authorized an extension of and an increase to the remaining
authorization of $41.4 million under our Common Share Repurchase Program, which was set to expire on December 31, 2020.
Following this Board action, we are now authorized to repurchase up to $50.0 million of our common shares from December 29,
2020 through December 31, 2021. Following the increase and extension of the program, we currently have $42.0 million of
available share repurchase authority remaining. Purchases may be made at our discretion in the form of open market repurchase
programs, privately negotiated transactions, accelerated share repurchase programs or a combination of these methods. The actual
amount and timing of share repurchases are subject to capital availability, our determination that share repurchases are in the best
interest of our shareholders and market conditions. We are not obligated to make any common share repurchases under the
Common Share Repurchase Program. As of the date of this annual report we have repurchased 6.0 million aggregate amount of
our common shares under the Common Share Repurchase Program at an average price of $11.17 per share.
Our ability to repurchase shares will depend upon, among other factors, our cash balances and potential future capital
requirements for strategic investments, our results of operations, our financial condition, and other factors beyond our control that
we may deem relevant. A reduction in repurchases, or the completion of our stock repurchase program, could have a negative
impact on our stock price. Additionally, price volatility of our common shares over a given period may cause the average price at
which we repurchase our common shares to exceed the stock’s market price at a given point in time. Conversely, repurchases of
our common shares could also increase the volatility of the trading price of our common shares and will diminish our cash
reserves. As such, we can provide no assurance that we will repurchase shares at favorable prices, if at all. See Note 11 to our
consolidated financial statements included herein for a discussion of our Common Share Repurchase Program.
Our board of directors may not declare dividends.
We have not paid any dividends since our inception in July 2013. In general, the terms of our credit facility do not
permit us to pay dividends if there is, or the payment of the dividend would result in, an event of default or a breach of a loan
covenant.
In the future, we will evaluate the potential level and timing of dividends as soon as profits and cash flows allow.
However, the timing and amount of any dividend payments will always be subject to the discretion of our board of directors and
will depend on, among other things, earnings, capital expenditure commitments, market prospects, current capital expenditure
programs, investment opportunities, the provisions of Marshall Islands law affecting the payment of distributions to shareholders,
and the terms and restrictions of our existing and future credit facilities. The LPG shipping industry is highly volatile, and we
cannot predict with certainty the amount of cash, if any, that will be available for distribution as dividends in any period. Also,
there may be a high degree of variability from period to period in the amount of cash that is available for the payment of
dividends.
We may incur expenses or liabilities or be subject to other circumstances in the future that reduce or eliminate the
amount of cash that we have available for distribution as dividends, including as a result of the risks described herein. Our growth
strategy contemplates that we will primarily finance our acquisitions of additional vessels through debt financings or the net
proceeds of future equity issuances on terms acceptable to us. If financing is not available to us on acceptable terms, our board of
directors may determine to finance or refinance acquisitions with cash from operations, which would reduce the amount of any
cash available for the payment of dividends.
The Republic of Marshall Islands laws also generally prohibit the payment of dividends other than from surplus
(retained earnings and the excess of consideration received for the sale of shares above the par value of the shares) or while a
company is insolvent or would be rendered insolvent by the payment of such a dividend. We may not have sufficient
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surplus in the future to pay dividends and our subsidiaries may not have sufficient funds or surplus to make distributions to us.
We can give no assurance that dividends will be paid at any level or at all.
We are a holding company and depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our
financial obligations and to make dividend payments.
We are a holding company and our subsidiaries conduct all of our operations and own all of our operating assets. As a
result, our ability to satisfy our financial obligations and to pay dividends, if any, to our shareholders depends on the ability of our
subsidiaries to generate profits available for distribution to us. The ability of a subsidiary to make these distributions could be
affected by a claim or other action by a third party, including a creditor, the terms of our financing arrangements or by the law of
its jurisdiction of incorporation which regulates the payment of dividends.
We may issue additional shares in the future, which could cause the market price of our common shares to decline.
We may issue additional common shares in the future without shareholder approval, in a number of circumstances,
including in connection with, among other things, future vessel acquisitions or repayment of outstanding indebtedness. Our
issuance of additional shares would have the following effects: our existing shareholders' proportionate ownership interest in us
will decrease; the amount of cash available for dividends payable per share may decrease; the relative voting strength of each
previously outstanding share may be diminished; and the market price of our shares may decline.
A future sale of shares by major shareholders may reduce the share price.
As of the date of this report and based on information contained in documents publicly filed by our Principal
Shareholders, our Principal Shareholders own an aggregate of 8.9 million common shares, or approximately 21.6% of our
outstanding common shares, and two other major shareholders own approximately 28.8% of our outstanding common shares.
Sales or the possibility of sales of substantial amounts of our common shares by any of our Principal Shareholders or other major
shareholders could adversely affect the market price of our common shares.
We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law.
We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate or
case law. As a result, shareholders may have fewer rights and protections under Marshall Islands law than under a typical
jurisdiction in the United States. Our corporate affairs are governed by our articles of incorporation and bylaws and by the
Marshall Islands Business Corporations Act, or BCA. The provisions of the BCA resemble provisions of the corporation laws of
a number of states in the United States. However, there have been few judicial cases in the Republic of the Marshall Islands
interpreting the BCA. The rights and fiduciary responsibilities of directors under the law of the Republic of the Marshall Islands
are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in
existence in certain United States jurisdictions. Shareholder rights may differ as well. While the BCA does specifically
incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar
legislative provisions, we cannot predict whether Marshall Islands courts would reach the same conclusions as United States
courts. Therefore, our public shareholders may have more difficulty in protecting their interests in the face of actions by the
management, directors or controlling shareholders than would shareholders of a corporation incorporated in a United States
jurisdiction.
It may be difficult to enforce a United States judgment against us, our officers and our directors because we are a foreign
corporation.
We are incorporated in the Republic of the Marshall Islands and most of our subsidiaries are organized in the Republic
of the Marshall Islands. Substantially all of our assets and those of our subsidiaries are located outside the United States. As a
result, our shareholders should not assume that courts in the countries in which we or our subsidiaries are incorporated or where
our assets or the assets of our subsidiaries are located (1) would enforce judgments of United States courts obtained in actions
against us or our subsidiaries based upon the civil liability provisions of applicable United States
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federal and state securities laws or (2) would enforce, in original actions, liabilities against us or our subsidiaries based upon
these laws.
Our organizational documents contain anti--takeover provisions.
Several provisions of our articles of incorporation and our bylaws could make it difficult for our shareholders to change
the composition of our board of directors in any one year, preventing them from changing the composition of management. In
addition, the same provisions may discourage, delay or prevent a merger or acquisition that shareholders may consider favorable.
These provisions include:
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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
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restricting business combinations with interested shareholders.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 2. PROPERTIES.
VLGCs are our principal physical properties and are more fully described in "Our Fleet" in "Item 1. Business." We do
not own any real estate. We lease office space at 27 Signal Road, Stamford, Connecticut, 06902, USA; River House, 143-145
Farringdon Road, London, EC1R 3AB, UK; August Bournonvilles Passage 1, 1055 Copenhagen, Denmark; and 24 Poseidonos
Avenue, 17674, Kallithea, Greece.
ITEM 3. LEGAL PROCEEDINGS.
We have not been involved in any legal proceedings other than that described below that we believe may have a
material effect on our business, financial position, results of operations or liquidity, and we are not aware of any proceedings that
are pending or threatened that may have a material effect on our business, financial position, results of operations or liquidity.
From time to time we are and expect to be subject to legal proceedings and claims in the ordinary course of our business, such as
personal injury and property casualty claims. These claims, even if lacking merit, could result in the expenditure of significant
financial and managerial resources.
In January 2021, subsequent to the delivery of one of our VLGCs on time charter, a dispute arose relating to the vessel’s
readiness to lift a cargo scheduled by the charterer. The facts of the claim are currently in dispute. We have recorded a contingent
liability and corresponding expense of $4.0 million during the year ended March 31, 2021.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
Our common shares have traded on the New York Stock Exchange, or NYSE, since May 9, 2014, under the symbol
"LPG." As of June 1, 2021, we had 145 registered holders of our common shares, including Cede & Co., the nominee for the
Depository Trust Company. This number excludes shareholders whose stock is held in nominee or street name by brokers.
Tender Offer
On February 2, 2021, we announced a tender offer to purchase up to 7,407,407, or about 14.8%, of our then outstanding
common shares at a price of $13.50 per share. Based on preliminary results indicating that the tender offer was oversubscribed,
we elected to increase the number of shares accepted for payment by 997,739, or slightly less than 2% of our then outstanding
shares. The number of shares we purchased and canceled from each tendering shareholder was prorated so our purchases in the
tender offer totaled of 8,405,146 shares, or approximately 16.8% of our then outstanding common shares, for an aggregate
purchase price of approximately $113.5 million.
Stock Repurchase Program
On August 5, 2019, our Board of Directors authorized the repurchase of up to $50.0 million of our common shares
through the period ended December 31, 2020 (the “Common Share Repurchase Program”). On February 3, 2020, our Board of
Directors authorized an increase to our Common Share Repurchase Program to repurchase up to an additional $50.0 million of
our common shares. On December 29, 2020, our Board of Directors authorized an extension of and an increase to the remaining
authorization of $41.4 million under our Common Share Repurchase Program, which was set to expire on December 31, 2020.
Following this Board action, we are now authorized to repurchase up to $50.0 million of our common shares from December 29,
2020 through December 31, 2021. See Note 11 to our consolidated financial statements included herein for a discussion of our
Common Share Repurchase Program.
Equity Compensation Plans
Information about the securities authorized for issuance under our equity compensation plan is set forth under “Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Equity Compensation
Plan Information.”
Taxation
Please see “Item 1. Business—Taxation” for a discussion of certain tax considerations related to holders of our common
shares.
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Issuer Purchases of Equity Securities
The table below sets forth information regarding our purchases of our common stock during the quarterly period ended
March 31, 2021:
Total
Number of
Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs
Maximum Dollar
Value of Shares
that May Yet Be
Purchased Under the
Plan or Programs
Average
Price Paid
Per Share
—
13.50
—
13.50
— $
8,405,146
—
8,405,146
$
47,916,044
47,916,044
47,916,044
47,916,044
Total
Number
of Shares
Purchased
— $
8,405,146
—
8,405,146
$
Period
January 1 to 31, 2021
February 1 to 28, 2021
March 1 to 31, 2021
Total
Purchases of our common shares during the quarterly period ended March 31, 2021 represent share repurchases under
the tender offer described above.
Stock Performance Graph
The performance graph below shows the cumulative total return to shareholders of our common stock relative to the
cumulative total returns of the Russell 2000 Index and the Dorian Peer Group Index (defined below). The graph tracks the
performance of a $100 investment in our common stock and in each of the indices (with the reinvestment of dividends) from
March 31, 2016 to March 31, 2021. The stock price performance included in this graph is not necessarily indicative of future
stock price performance.
The Dorian Peer Group Index is a self-constructed peer group that consists of the following direct competitors on a line-
of-business basis: BWLPG, NVGS and Avance. NVGS’s common stock trades on the New York Stock Exchange, while the
common stock of Avance and BWLPG trade on the Oslo Stock Exchange. For the purposes of the below comparison, the
cumulative total returns for Avance and BWLPG were converted into U.S. dollars based on the relevant NOK to one USD
exchange rate prevailing on the dates listed below.
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Dorian LPG Ltd. ("LPG")
Russell 2000 Index ("RTY Index")
Peer Index
NOK to USD exchange conversion rate
3/31/16
3/31/17
3/31/18
3/31/19
3/31/20
3/31/21
100.00
100.00
100.00
8.2698
112.93
125.18
80.46
8.5945
80.02
141.74
69.55
7.8416
64.21
144.14
55.33
8.6273
89.00
105.72
43.60
10.4017
136.97
205.64
113.10
8.5574
This performance graph shall not be deemed “soliciting material” or to be “filed” with the Commission for purposes of
Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be
incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Act.
ITEM 6. (Reserved)
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
You should read the following discussion of our financial condition and results of operations in conjunction with our
consolidated financial statements and related notes included herein. Among other things, those financial statements include more
detailed information regarding the basis of presentation for the following information. The financial statements have been
prepared in accordance with U.S. GAAP and are presented in U.S. dollars unless otherwise indicated. The following discussion
contains forward‑looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth
under "Item 1A—Risk Factors," "Forward-Looking Statements" and elsewhere in this report, our actual results may differ
materially from those anticipated in these forward‑looking statements.
Overview
We are a Marshall Islands corporation, headquartered in the United States, focused on owning and operating VLGCs.
Our fleet currently consists of twenty-three VLGCs, including nineteen new fuel-efficient 84,000 cbm ECO VLGCs, three 82,000
cbm VLGCs, and one time chartered-in VLGC.
Our nineteen ECO VLGCs, which incorporate fuel efficiency and emission-reducing technologies and certain custom
features, were acquired by us for an aggregate purchase price of $1.4 billion and delivered to us between July 2014 and February
2016, seventeen of which were delivered during calendar year 2015 or later.
On April 1, 2015, Dorian and Phoenix began operations of the Helios Pool, which entered into pool participation
agreements for the purpose of establishing and operating, as charterer, under a variable rate time charter to be entered into with
owners or disponent owners of VLGCs, a commercial pool of VLGCs whereby revenues and expenses are shared. The vessels
entered into the Helios Pool may operate either in the spot market, pursuant to COAs or on time charters of two years' duration or
less. As of June 1, 2021, twenty-one of our twenty-three VLGCs, including the time chartered-in vessel, were deployed in the
Helios Pool.
Our customers, either directly or through the Helios Pool, include or have included global energy companies such as
Exxon Mobil Corp., Chevron Corp., China International United Petroleum & Chemicals Co., Ltd., Royal Dutch Shell plc,
Equinor ASA, Total S.A., and Sunoco LP, commodity traders such as Glencore plc, Itochu Corporation, Bayegan Group and the
Vitol Group and importers such as E1 Corp., Indian Oil Corporation, SK Gas Co. Ltd. Astomos Energy Corporation, and Oriental
Energy Company Ltd. or subsidiaries of the foregoing. For the year ended March 31, 2021, the Helios Pool accounted for 93% of
our total revenues. No other individual charterer accounted for more than 10%. Within the Helios Pool, one charterer represented
16% of net pool revenues—related party, respectively. For the year ended March 31, 2020, the Helios Pool accounted for 89% of
our total revenues. No other individual charterer accounted for more than 10%. Within the Helios Pool, two charterers
represented 12% and 11%, respectively of net pool revenues—related party, respectively. For the year ended March 31, 2019, the
Helios Pool and one other individual charterer represented 76%, and 14%, respectively, of our total revenues and within the
Helios Pool, two charterers each represented 10% of net pool revenues—related party. See “Item 1A. Risk Factors—We operate
exclusively in the LPG shipping industry. Due to the general lack of industry diversification, adverse developments in the LPG
shipping industry may adversely affect our
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business, financial condition and operating results” and “Item 1A. Risk Factors—We expect to be dependent on a limited number
of customers for a material part of our revenues, and failure of such customers to meet their obligations could cause us to suffer
losses or negatively impact our results of operations and cash flows.”
We continue to pursue a balanced chartering strategy by employing our vessels on a mix of multi-year time charters,
some of which may include a profit-sharing component, shorter-term time charters, spot market voyages and COAs. Two of our
vessels are currently on fixed time charters outside of the Helios Pool. See “Item 1. Business—Our Fleet” above for more
information.
On August 5, 2019, our Board of Directors authorized our Common Share Repurchase Program. For more information
please refer to Part II, Item 5, “Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of
Equity Securities.”
Recent Developments
On March 31, 2021, we entered into a bareboat agreement to charter-in a newbuilding dual-fuel VLGC that is expected
to be delivered from Kawasaki Heavy Industries in March 2023. See Note 18 to our consolidated financial statements for further
details on the newbuilding and bareboat charter-in agreement. In April 2021, we made the first payment of $8.0 million under this
commitment.
Vessel Deployment—Spot Voyages, Time Charters, COAs, and Pooling Arrangements
We seek to employ our vessels in a manner that maximizes fleet utilization and earnings upside through our chartering
strategy in line with our goal of maximizing shareholder value and returning capital to shareholders when appropriate, taking into
account fluctuations in freight rates in the market and our own views on the direction of those rates in the future. As of June 1,
2021, twenty-one of our twenty-three VLGCs, including the time chartered-in vessel, were employed in the Helios Pool, which
includes time charters with a term of less than two years.
A spot market voyage charter is generally a contract to carry a specific cargo from a load port to a discharge port for an
agreed upon freight per ton of cargo or a specified total amount. Under spot market voyage charters, we pay voyage expenses
such as port and fuel costs. A time charter is generally a contract to charter a vessel for a fixed period of time at a set daily or
monthly rate. Under time charters, the charterer pays voyage expenses such as port and fuel costs. Vessels operating on time
charters provide more predictable cash flows, but can yield lower profit margins than vessels operating in the spot market during
periods characterized by favorable market conditions. Vessels operating in the spot market generate revenues that are less
predictable but may enable us to capture increased profit margins during periods of improvements in the freight market although
we are exposed to the risk of a decline in the freight market and lower utilization. Pools generally consist of a number of vessels
which may be owned by a number of different ship owners which operate as a single marketing entity in an effort to produce
freight efficiencies. Pools typically employ experienced commercial charterers and operators who have close working
relationships with customers and brokers while technical management is typically the responsibility of each ship owner. Under
pool arrangements, vessels typically enter the pool under a time charter agreement whereby the cost of bunkers and port expenses
are borne by the charterer (i.e., the pool) and operating costs, including crews, maintenance and insurance are typically paid by
the owner of the vessel. Pools, in return, typically negotiate charters with customers primarily in the spot market. Since the
members of a pool typically share in the revenue generated by the entire group of vessels in the pool, and since pools operate
primarily in the spot market, including the pool in which we participate, the revenue earned by vessels placed in spot market
related pools is subject to the fluctuations of the spot market and the ability of the pool manager to effectively employ its fleet.
We believe that vessel pools can provide cost-effective commercial management activities for a group of similar class vessels and
potentially result in lower waiting times and higher earnings.
COAs relate to the carriage of multiple cargoes over the same or several routes at pre-agreed terms, volumes and periods
and enables the COA holder to nominate and lift cargoes, without controlling tonnage themselves or having their own vessel in
position. COAs are usually based on voyage terms, where all of the vessel's operating, voyage and capital costs are borne by the
ship owner.
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On April 1, 2015, Dorian and Phoenix began operation of the Helios Pool, which is a pool of VLGC vessels. We
believe that the operation of certain of our VLGCs in this pool allows us to achieve better market coverage and utilization.
Vessels entered into the Helios Pool are commercially managed jointly by Dorian LPG (UK) Ltd., our wholly-owned subsidiary,
and Phoenix. The members of the Helios Pool share in the net pool revenues generated by the entire group of vessels in the pool,
weighted according to certain technical vessel characteristics, and net pool revenues (see Note 2 to our consolidated financial
statements included herein) are distributed as variable rate time charter hire to each participant. The vessels entered into the
Helios Pool may operate either in the spot market, COAs, or on time charters of two years' duration or less. As of June 1, 2021,
the Helios Pool operated twenty-nine VLGCs, including twenty-one vessels from our fleet, four Phoenix vessels, and four from
other participants.
For further description of our business, please see “Item 1. Business” above.
Important Financial and Operational Terms and Concepts
We use a variety of financial and operational terms and concepts in the evaluation of our business and operations
including the following:
Vessel Revenues. Our revenues are driven primarily by the number of vessels in our fleet, the number of days during
which our vessels operate and the daily rates that our vessels earn under our charters, which, in turn, are affected by a number of
factors, including levels of demand and supply in the LPG shipping industry; the age, condition and specifications of our vessels;
the duration of our charters; the timing of when any profit-sharing arrangements are earned; the amount of time that we spend
positioning our vessels; the availability of our vessels, which is related to the amount of time that our vessels spend in drydock
undergoing repairs and the amount of time required to perform necessary maintenance or upgrade work; and other factors
affecting rates for LPG vessels.
We generate revenue by providing seaborne transportation services to customers pursuant to three types of contractual
relationships:
Pooling Arrangements. As from April 1, 2015, we began operation of the Helios Pool. Net pool revenues—related party
for each vessel is determined in accordance with the profit-sharing terms specified within the pool agreement for the
Helios Pool. In particular, the pool manager aggregates the revenues and voyage expenses of all of the pool participants
and Helios Pool general and administrative expenses and distributes the net earnings to participants based on:
●
●
pool points (vessel attributes such as cargo carrying capacity, fuel consumption, and speed are taken into
consideration); and
number of days the vessel was on-hire in the Helios Pool in the period.
For the years ended March 31, 2021, 2020, and 2019, approximately 92.6%, 89.4% and 75.9% of our revenue,
respectively, was generated through the Helios Pool as net pool revenues—related party.
Voyage Charters. A voyage charter, or spot charter, is a contract for transportation of a specified cargo between two or
more designated ports. This type of charter is priced on a current or "spot" market rate, typically on a price per ton of
product carried. Under voyage charters, we are responsible for all of the voyage expenses in addition to providing the
crewing and other vessel operating services. Revenues for voyage charters are more volatile as they are typically tied to
prevailing market rates at the time of the voyage. Our gross revenue under voyage charters are generally higher than
under comparable time charters so as to compensate us for bearing all voyage expenses. As a result, our revenue and
voyage expenses may vary significantly depending on our mix of time charters and voyage charters. None of our
revenue was generated pursuant to voyage charters from our VLGCs not in the Helios Pool for the years ended
March 31, 2021, 2020, and 2019.
Time Charters. A time charter is a contract under which a vessel is chartered for a defined period of time at a fixed
daily or monthly rate. Under time charters, we are responsible for providing crewing and other vessel
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operating services, the cost of which is intended to be covered by the fixed rate, while the customer is responsible for
substantially all of the voyage expenses, including bunker fuel consumption, port expenses and canal tolls. LPG is
typically transported under a time charter arrangement, with terms ranging up to seven years. In addition, we may also
have profit-sharing arrangements with some of our customers that provide for additional payments above a floor
monthly rate (usually up to an agreed ceiling) based on the actual, average daily rate quoted by the Baltic Exchange for
VLGCs on the benchmark Ras Tanura‑Chiba route over an agreed time period converted to a TCE monthly rate. For the
years ended March 31, 2021, 2020, and 2019, approximately 6.2%, 10.2% and 23.9%, respectively, of our revenue was
generated pursuant to time charters from our VLGCs not in the Helios Pool.
Other Revenues, net. Other revenues, net represent income from charterers, including the Helios Pool, relating to
reimbursement of expenses such as costs for security guards and war risk insurance for voyages operating in high risk
areas. For the years ended March 31, 2021, 2020, and 2019, approximately 1.2%, 0.4% and 0.2%, respectively, of our
revenue was generated pursuant to other revenues, net.
Of these revenue streams, revenue generated from voyage charter agreements is further described in our revenue
recognition policy as described in Note 2 to our consolidated financial statements. Revenue generated from pools and time
charters is accounted for as revenue earned under recently adopted accounting guidance to update the requirements of financial
accounting and reporting for lessees and lessors as described in Note 2 to our consolidated financial statements.
Calendar Days. We define calendar days as the total number of days in a period during which each vessel in our fleet
was owned or operated pursuant to a bareboat charter. Calendar days are an indicator of the size of the fleet over a period and
affect both the amount of revenues and the amount of expenses that are recorded during that period.
Time Chartered-in Days. We define time chartered-in days as the aggregate number of days in a period during which
we time chartered-in vessels from third parties. Time chartered-in days are an indicator of the size of the fleet over a period and
affect both the amount of revenues and the amount of charter hire expenses that are recorded during that period.
Available Days. We define available days as the sum of calendar days and time chartered-in days (collectively
representing our commercially-managed vessels) less aggregate off hire days associated with major repairs and scheduled
maintenance, which include drydockings, vessel upgrades or special or intermediate surveys. We use available days to measure
the aggregate number of days in a period that our vessels should be capable of generating revenues.
Operating Days. We define operating days as available days less the aggregate number of days that the commercially-
managed vessels in our fleet are off‑hire for any reason other than major repairs and scheduled maintenance. We use operating
days to measure the number of days in a period that our operating vessels are on hire.
Drydocking. We must periodically drydock each of our vessels for any major repairs and maintenance and for
inspection of the underwater parts of the vessel that cannot be performed while the vessels are operating and for any
modifications to comply with industry certification or governmental requirements. The classification societies provide guidelines
applicable to LPG vessels relating to extended intervals for drydocking. Generally, we are required to drydock a vessel under 15
years of age once every five years unless an extension of the drydocking to seven and one-half years is granted by the
classification society and the vessel is not older than 20 years of age. We capitalize costs directly associated with the drydockings
that extend the life of the vessel and amortize these costs on a straight-line basis over the period through the date the next survey
is scheduled to become due under the "Deferral" method permitted under U.S. GAAP. Costs incurred during the drydocking
period which relate to routine repairs and maintenance are expensed as incurred. The number of drydockings undertaken in a
given period and the nature of the work performed determine the level of drydocking expenditures.
Fleet Utilization. We calculate fleet utilization by dividing the number of operating days during a period by the number
of available days during that period. An increase in non‑scheduled off‑hire days, including waiting time, would reduce our
operating days, and therefore, our fleet utilization. We use fleet utilization to measure our ability to efficiently find suitable
employment for our vessels.
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Time Charter Equivalent Rate. TCE rate is a measure of the average daily revenue performance of a vessel. TCE rate
is a shipping industry performance measure used primarily to compare period‑to‑period changes in a shipping company’s
performance despite changes in the mix of charter types (such as time charters, voyage charters) under which the vessels may be
employed between the periods. Our method of calculating TCE rate is to divide revenue net of voyage expenses by operating
days for the relevant time period.
Voyage Expenses. Voyage expenses are all expenses unique to a particular voyage, including bunker fuel consumption,
port expenses, canal fees, charter hire commissions, war risk insurance and security costs. Voyage expenses are typically paid by
us under voyage charters and by the charterer under time charters, including our VLGCs chartered to the Helios Pool.
Accordingly, we generally only incur voyage expenses for our own account when performing voyage charters or during
repositioning voyages between time charters for which no cargo is available or travelling to or from drydocking. We generally
bear all voyage expenses under voyage charters and, as such, voyage expenses are generally greater under voyage charters than
time charters. As a result, our voyage expenses may vary significantly depending on our mix of time charters and voyage
charters.
Charter Hire Expenses. We time charter hire certain vessels from third-party owners or operators for a contracted
period and rate in order to charter the vessels to our customers. Charter hire expenses include vessel operating lease expense
incurred to charter-in these vessels.
Vessel Operating Expenses. Vessel operating expenses are expenses that are not unique to a specific voyage. Vessel
operating expenses are paid by us under each of our charter types. Vessel operating expenses include crew wages and related
costs, the costs for lubricants, insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores,
tonnage taxes and other miscellaneous expenses. Our vessel operating expenses will increase with the expansion of our fleet and
are subject to change because of higher crew costs, higher insurance premiums, unexpected repair expenses and general inflation.
Furthermore, we expect maintenance costs will increase as our vessels age and during periods of drydock.
Daily Vessel Operating Expenses. Daily vessel operating expenses are calculated by dividing vessel operating
expenses by calendar days for the relevant time period.
Depreciation and Amortization. We depreciate our vessels on a straight‑line basis using an estimated useful life of 25
years from initial delivery from the shipyard and after considering estimated salvage values.
We amortize the cost of deferred drydocking expenditures on a straight‑line basis over the period through the date the
next drydocking/special survey is scheduled to become due.
General and Administrative Expenses. General and administrative expenses principally consist of the costs incurred in
the corporate administration of the vessel and non‑vessel owning subsidiaries. We have granted restricted stock awards to certain
of our officers, directors, employees and non-employee consultants that vest over various periods (see Note 12 to our
consolidated financial statements included herein). Granting of restricted stock results in an increase in expenses. Compensation
expense for employees is measured at the grant date based on the estimated fair value of the awards and is recognized over the
vesting period and for nonemployees is re-measured at the end of each reporting period based on the estimated fair value of the
awards on that date and is recognized over the vesting period.
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make estimates
in the application of our accounting policies based on our best assumptions, judgments and opinions. On a regular basis,
management reviews the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial
statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be
determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.
Accounting estimates and assumptions discussed in this section are those that we consider to be the most critical to an
understanding of our financial statements because they inherently involve significant judgments
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and uncertainties. For a description of our material accounting policies, see Note 2 of our consolidated financial statements
included herein.
Vessel Depreciation. The cost of our vessels less their estimated residual value is depreciated on a straight‑line basis
over the vessels' estimated useful lives. We estimate the useful life of each of our vessels to be 25 years from the date the vessel
was originally delivered from the shipyard. Based on the current market and the types of vessels we have in our fleet, the residual
values of our vessels are based upon a value of approximately $400 per lightweight ton. An increase in the useful life of our
vessels or in their residual value would have the effect of decreasing the annual depreciation charge and extending it into later
periods. An increase in the useful life of a vessel may occur as a result of superior vessel maintenance performed, favorable ocean
going and weather conditions the vessel is subjected to, superior quality of the shipbuilding or yard, or high freight market rates,
which result in owners scrapping the vessels later due to the attractive cash flows. A decrease in the useful life of our vessels or in
their residual value would have the effect of increasing the annual depreciation charge and possibly result in an impairment
charge. A decrease in the useful life of a vessel may occur as a result of poor vessel maintenance performed, harsh ocean going
and weather conditions the vessel is subjected to, or poor quality of the shipbuilding or yard. If regulations place limitations over
the ability of a vessel to trade on a worldwide basis, we will adjust the vessel's useful life to end at the date such regulations
preclude such vessel's further commercial use.
Impairment of vessels. We review our vessels for impairment when events or circumstances indicate the carrying
amount of the asset may not be recoverable. In addition, we compare independent appraisals to our carrying value for indicators
of impairment to our vessels. When such indicators are present, an asset is tested for recoverability by comparing the estimate of
future undiscounted net operating cash flows expected to be generated by the use of the asset over its remaining useful life and its
eventual disposition to its carrying amount. An impairment charge is recognized if the carrying value is in excess of the estimated
future undiscounted net operating cash flows. The impairment loss is measured based on the excess of the carrying amount over
the fair market value of the asset. The new lower cost basis would result in a lower annual depreciation than before the
impairment.
Our estimates of fair market value assume that our vessels are all in good and seaworthy condition without need for
repair and if inspected would be certified in class without notations of any kind. Our estimates are based on information available
from various industry sources, including:
●
●
●
●
●
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.
As we obtain information from various industry and other sources, our estimates of fair market value are inherently
uncertain. In addition, vessel values are highly volatile; as such, our estimates may not be indicative of the current or future fair
market value of our vessels or prices that we could achieve if we were to sell them.
As of March 31, 2021, independent appraisals of the commercially and technically-managed VLGCs in our fleet had no
indicators of impairment on any of our VLGCs in accordance with ASC 360 Property, Plant, and Equipment. No impairment
charges were recognized for the year ended March 31, 2021.
As of March 31, 2020, independent appraisals of the commercially and technically-managed VLGCs in our fleet had
indicators of impairment on ten of our VLGCs in accordance with ASC 360 Property, Plant, and Equipment. We
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determined estimated net operating cash flows for these VLGCs by applying various assumptions regarding future time charter
equivalent revenues net of commissions, operating expenses, scheduled drydockings, expected offhire and scrap values. These
assumptions were based on historical data as well as future expectations. We estimated spot market rates by obtaining the trailing
10-year historical average spot market rates, as published by maritime industry researchers. Estimated outflows for operating
expenses and drydocking expenses were based on historical and budgeted costs and were adjusted for assumed inflation.
Utilization was based on our historical levels achieved in the spot market and estimates of a residual value consistent with scrap
rates used in management's evaluation of scrap value. Such estimates and assumptions regarding expected net operating cash
flows require considerable judgment and were based upon historical experience, financial forecasts and industry trends and
conditions. Therefore, based on this analysis, we concluded that no impairment charge was necessary because we believe the
vessel carrying values are recoverable. No impairment charges were recognized for the year ended March 31, 2020.
In addition, we performed a sensitivity analysis as of March 31, 2020 to determine the effect on recoverability of
changes in TCE rates. The sensitivity analysis suggests that we would not incur an impairment charge on any of the commercially
and technically-managed VLGCs in our fleet if daily TCE rates based on the 10-year historical average spot market rates were
reduced by 30%. An impairment charge of approximately $11.3 million on six of our VLGCs would be triggered by a reduction
of 40% in the 10-year historical average spot market rates.
As of March 31, 2019, independent appraisals of the commercially and technically-managed VLGCs in our fleet had
indicators of impairment on twenty-one of our VLGCs in accordance with ASC 360 Property, Plant, and Equipment. Based on
the methodology described above on assessing our vessels for impairment, we concluded that no impairment charges were
required for the year ended March 31, 2019.
In addition, we performed a sensitivity analysis as of March 31, 2019 to determine the effect on recoverability of
changes in TCE rates. The sensitivity analysis suggests that we would not incur an impairment charge on any of the commercially
and technically-managed VLGCs in our fleet if daily TCE rates based on the 10-year historical average spot market rates were
reduced by 30%. An impairment charge of approximately $104.1 million on twenty-one of our VLGCs would be triggered by a
reduction of 40% in the 10-year historical average spot market rates.
The amount, if any, and timing of any impairment charges we may recognize in the future will depend upon the then
current and expected future charter rates and vessel values, which may differ materially from those used in our estimates as of
March 31, 2021, 2020 and 2019.
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The table set forth below indicates the carrying value of each commercially and technically-managed vessel in our fleet
as of March 31, 2021 and 2020 at which times none of the vessels listed in the table below was being held for sale:
Vessels
Captain Nicholas ML(3)
Captain John NP
Captain Markos NL(3)
Comet
Corsair(3)
Corvette
Cougar
Concorde
Cobra
Continental
Constitution(3)
Commodore
Cresques(3)
Constellation
Clermont(3)
Cheyenne(3)
Cratis(3)
Commander
Chaparral
Copernicus(3)
Challenger(3)
Caravelle
Capacity
(Cbm)
82,000
82,000
82,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
1,842,000
Year
Built
2008
2007
2006
2014
2014
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2016
Date of
Acquisition/
Delivery
Purchase Price/
Original Cost
7/29/2013
7/29/2013
7/29/2013
7/25/2014
9/26/2014
1/2/2015
6/15/2015
6/24/2015
6/26/2015
7/23/2015
8/20/2015
8/28/2015
9/1/2015
9/30/2015
10/13/2015
10/22/2015
10/30/2015
11/5/2015
11/20/2015
11/25/2015
12/11/2015
2/25/2016
$
$
68,156,079
64,955,636
61,421,882
75,276,432
80,906,292
84,262,500
80,427,640
81,168,031
80,467,667
80,487,197
80,517,226
80,468,889
82,960,176
78,649,026
80,530,199
80,503,271
83,186,333
78,056,729
80,516,187
83,333,085
80,576,863
81,119,450
1,727,946,790
Carrying value at Carrying value at
March 31, 2021(1) March 31, 2020(2)
$
$
45,607,917
43,752,063
39,756,647
61,755,175
66,467,033
65,458,097
64,324,422
64,326,433
64,507,318
64,261,784
68,257,793
64,967,232
70,071,205
66,657,356
65,658,724
68,357,084
70,598,639
64,572,089
65,033,303
70,996,965
65,535,449
66,263,728
$ 1,387,186,457
48,770,251
45,026,465
42,358,963
64,847,787
69,834,204
68,382,786
66,434,929
67,128,028
66,659,127
67,292,456
68,123,418
67,090,925
73,401,625
69,800,803
68,522,988
71,649,915
73,912,967
66,415,810
67,824,584
74,348,050
68,044,591
69,124,886
$ 1,444,995,559
(1)
(2)
(3)
Our vessels are stated at carrying values (refer to our accounting policy in Note 2 to our consolidated financial
statements included herein) including deferred drydocking costs and, as of March 31, 2021, the carrying value of none
of our vessels exceeded their estimated market value. On an aggregate fleet basis, the estimated market value of our
vessels was higher than their carrying value as of March 31, 2021 by $82.1 million. There were no indications of
impairment on any of our vessels and no impairment was recorded during the year ended March 31, 2021.
Our vessels are stated at carrying values (refer to our accounting policy in Note 2 to our consolidated financial
statements included herein) including deferred drydocking costs and, as of March 31, 2020, the carrying value of ten of
our vessels exceeded their estimated market value. On an aggregate fleet basis, the estimated market value of our
vessels was higher than their carrying value as of March 31, 2020 by $5.6 million. No impairment was recorded during
the year ended March 31, 2020 as we believed that the carrying value of our vessels was fully recoverable.
VLGCs for which we believe, as of March 31, 2020, that the estimated fair value is lower than the VLGCs’ carrying
value. We believe that the aggregate carrying value of these vessels exceeds their aggregate estimated fair value by
$13.1 million as of March 31, 2020. However, as described above, the estimated net operating cash flows for each of
these VLGCs were higher than their respective carrying amounts and consequently, no impairment loss was recognized.
Drydocking and special survey costs. We must periodically drydock each of our vessels to comply with industry
standards, regulatory requirements and certifications. The classification societies provide guidelines applicable to LPG vessels
relating to extended intervals for drydocking. Generally, we are required to drydock a vessel under 15 years of age once every
five years unless an extension of the drydocking to seven and one-half years is granted by the classification society and the vessel
is not older than 20 years of age.
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Drydocking 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 drydocking is scheduled to become due. 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. Drydocking costs do not include vessel operating
expenses such as replacement parts, crew expenses, provisions, luboil consumption, and insurance during the drydock period.
Expenses related to regular maintenance and repairs of our vessels are expensed as incurred, even if such maintenance and repair
occurs during the same time period as our drydocking.
If a drydocking 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 nature of the work performed and the number of drydockings undertaken in a given period
determine the level of drydocking expenditures.
Fair Value of Derivative Instruments. We use derivative financial instruments to manage interest rate risks. The fair
value of our interest rate swap agreements is the estimated amount that we would receive or pay to terminate the agreements at
the reporting date, taking into account current interest rates and the current credit worthiness of both us and the swap
counterparties. The estimated amount is the present value of estimated future cash flows, being equal to the difference between
the benchmark interest rate and the fixed rate in the interest rate swap agreement, multiplied by the notional principal amount of
the interest rate swap agreement at each interest reset date.
The fair value of our interest swap agreements at the end of each period is most significantly affected by the interest rate
implied by the LIBOR interest yield curve, including its relative steepness. Interest rates have experienced significant volatility in
recent years in both the short and long term. While the fair value of our interest rate swap agreements is typically more sensitive
to changes in short‑term rates, significant changes in the long‑term benchmark interest rates also materially impact our interest.
The fair value of our interest swap agreements is also affected by changes in our own and our counterparty specific
credit risk included in the discount factor. Our estimate of our counterparty's credit risk is based on the credit default swap spread
of the relevant counterparty which is publicly available. The process of determining our own credit worthiness requires
significant judgment in determining which source of credit risk information most closely matches our risk profile, which includes
consideration of the margin we would be able to secure for future financing. A 10% increase / decrease in our own or our
counterparty credit risk would not have had a significant impact on the fair value of our interest rate swaps.
The LIBOR interest rate yield curve and our specific credit risk are expected to vary over the life of the interest rate
swap agreements. The larger the notional amount of the interest rate swap agreements outstanding and the longer the remaining
duration of the interest rate swap agreements, the larger the impact of any variability in these factors will be on the fair value of
our interest rate swaps. We economically hedge the interest rate exposure on a significant amount of our long‑term debt and for
long durations. As such, we have experienced, and we expect to continue to experience, material variations in the
period‑to‑period fair value of our derivative instruments.
Although we measure the fair value of our derivative instruments utilizing the inputs and assumptions described above,
if we were to terminate the interest rate swap agreements at the reporting date, the amount we would pay or receive to terminate
the derivative instruments may differ from our estimate of fair value. If the estimated fair value differs from the actual
termination amount, an adjustment to the carrying amount of the applicable derivative asset or liability would be recognized in
earnings for the current period. Such adjustments have been and could be material in the future.
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Results of Operations For The Year Ended March 31, 2021 As Compared To The Year Ended March 31, 2020
Revenues
The following table compares revenues for the years ended March 31:
Net pool revenues—related party
Time charter revenues
Other revenues, net
Total
$
$
2021
292,679,614 $
19,492,595
3,766,603
315,938,812 $
2020
298,079,123 $
34,111,230
1,239,645
333,429,998 $
Increase /
(Decrease)
Percent
Change
(5,399,509)
(14,618,635)
2,526,958
(17,491,186)
(1.8)%
(42.9)%
203.8 %
(5.2)%
Revenues, which represent net pool revenues—related party, time charters and other revenues, net, were $315.9 million
for the year ended March 31, 2021, a decrease of $17.5 million, or 5.2%, from $333.4 million for the year ended March 31, 2020.
The decrease is primarily attributable to a reduction of average TCE rates and decreased fleet utilization. Average TCE rates of
$39,606 for the year ended March 31, 2021 decreased from $42,798 for the year ended March 31, 2020. During the year ended
March 31, 2021, we recognized a reallocation of prior period pool profits based on a periodic review of actual vessel performance
in accordance with the pool participation agreements. This reallocation resulted in a $707 decrease in our fleet’s overall TCE
rates for the year ended March 31, 2021 due to adjustments related to the relative speed and consumption performance of all
vessels participating in the Helios Pool. This compares to a $240 increase in our fleet’s overall TCE rates for reallocation of prior
period pool profits during the year ended March 31, 2020. Excluding this reallocation for both years, TCE rates decreased by
$2,245 when comparing the year ended March 31, 2021 to the year ended March 31, 2020, primarily driven by a reduction in
spot market rates. The Baltic Exchange Liquid Petroleum Gas Index, an index published daily by the Baltic Exchange for the spot
market rate for the benchmark Ras Tanura-Chiba route (expressed as U.S. dollars per metric ton), averaged $55.703 for the year
ended March 31, 2021 compared to an average of $67.050 for the year ended March 31, 2020. Our fleet utilization decreased
from 95.4% during the year ended March 31, 2020 to 92.8% during the year ended March 31, 2021.
Charter Hire Expenses
Charter hire expenses for the vessels chartered in from third parties were $18.1 million for the year ended
March 31, 2021 compared to $9.9 million for the year ended March 31, 2020. The increase of $8.2 million, or 83.9%, was caused
by an increase in time chartered-in days, which increased from 426 for the year ended March 31, 2020 to 740 for the year ended
March 31, 2021.
Vessel Operating Expenses
Vessel operating expenses were $78.2 million during the year ended March 31, 2021, or $9,741 per vessel per calendar
day, which is calculated by dividing vessel operating expenses by calendar days for the relevant time period for the vessels that
were in our fleet. This was an increase of $6.7 million, or 9.4%, from $71.5 million, or $8,877 per vessel per calendar day, for the
year ended March 31, 2020. The increase in vessel operating expenses was primarily the result of a $6.0 million, or $755 per
vessel per calendar day, increase in operating expenses related to repairs and maintenance, spares and stores, and coolant costs,
which is inclusive of an increase of $0.4 million, or $54 per vessel per calendar day, in operating expenses related to the
drydocking of vessels.
General and Administrative Expenses
General and administrative expenses were $33.9 million for the year ended March 31, 2021, an increase of $10.5
million, or 45.1%, from $23.4 million for the year ended March 31, 2020. This was driven by the recording of a contingent
liability of $4.0 million related to a disputed claim relating to one of our VLGCs readiness to lift a cargo scheduled by a charterer
and increases of $2.0 million in annual cash bonuses to certain employees, $3.1 million in salaries, wages and benefits, and $1.4
million in higher insurance premiums.
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Interest and Finance Costs
Interest and finance costs amounted to $27.6 million for the year ended March 31, 2021, a decrease of $8.5 million from
$36.1 million for the year ended March 31, 2020. The decrease of $8.5 million during the year ended March 31, 2021 was due to
a decrease of $10.6 million in interest incurred on our long-term debt, primarily resulting from a decrease in average indebtedness
and a reduced margin from the refinancing of the Commercial Tranche of the 2015 Facility, partially offset by a reduction of $2.2
million in amortization of deferred financing fees and loan expenses. Average indebtedness, excluding deferred financing fees,
decreased from $683.9 million for the year ended March 31, 2020 to $633.7 million for the year ended March 31, 2021. As of
March 31, 2021, the outstanding balance of our long-term debt, excluding deferred financing fees, was $602.1 million.
Unrealized Gain/(Loss )on Derivatives
Unrealized gain on derivatives amounted to approximately $7.2 million for the year ended March 31, 2021 compared to
an unrealized loss of $18.2 million for the year ended March 31, 2020. The favorable $25.4 million difference is primarily
attributable to an increase of $20.2 million in favorable fair value changes to our interest rate swaps resulting from changes in
forward LIBOR yield curves and $5.2 million in favorable variances related to the settlement in the current period of our FFA
positions.
Realized Gain/(Loss) on Derivatives
Realized loss on derivatives was $4.6 million for the year ended March 31, 2021, compared to a realized gain of $2.8
million for the year ended March 31, 2020. The unfavorable $7.4 million change is primarily attributable to (1) fluctuations in
floating LIBOR resulting in a $6.2 million unfavorable variance on realized losses in the current period on our interest rate swaps
and (2) additional realized losses incurred related to settlements on our FFA positions of $1.2 million.
Results of Operations For The Year Ended March 31, 2020 As Compared To The Year Ended March 31, 2019
For a discussion of the year ended March 31, 2020 compared to the year ended March 31, 2019, please refer to Part II,
Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on
Form 10-K for the year ended March 31, 2020.
Operating Statistics and Reconciliation of GAAP to non-GAAP Financial Measures
To supplement our financial statements presented in accordance with U.S.GAAP, we present certain operating statistics
and non-GAAP financial measures to assist in the evaluation of our business performance. These non-GAAP financial measures
include Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) and time charter equivalent
rate. These non-GAAP financial measures may not be comparable to similarly titled measures used by other companies and
should not be considered in isolation or as a substitute for net income and revenues, which are the most directly comparable
measures of performance prepared in accordance with GAAP.
We use these non-GAAP financial measures in assessing the performance of our ongoing operations and in planning
and forecasting future periods. These adjusted measures provide a more comparable basis to analyze operating results and
earnings and are measures commonly used by shareholders to measure our performance. We believe that these adjusted
measures, when considered together with the corresponding U.S. GAAP financial measures and the
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reconciliations to those measures, provide meaningful supplemental information to assist investors and analysts in understanding
our business results and assessing our prospects for future performance.
(in U.S. dollars, except fleet data)
Financial Data
Adjusted EBITDA
Fleet Data
Calendar days(1)
Time chartered-in days(1)
Available days(1)
Operating days(1)
Fleet utilization(1)
Average Daily Results
Time charter equivalent rate
Daily vessel operating expenses(1)
Year ended
March 31, 2021
Year ended
March 31, 2020
Year ended
March 31, 2019
$
188,555,935
$
233,240,304
$
64,408,989
8,030
740
8,505
7,891
92.8 %
$
$
39,606
9,741
$
$
8,052
426
8,088
7,715
95.4 %
42,798
8,877
$
$
8,030
10
7,997
7,189
89.9 %
21,746
8,329
(1)
Refer to “Important Financial and Operational Terms and Concepts” above for definitions of calendar days, time
chartered-in days, available days, operating days, fleet utilization, and daily vessel operating expenses.
Adjusted EBITDA
Adjusted EBITDA is an unaudited non-U.S. GAAP financial measure and represents net income/(loss) before interest
and finance costs, unrealized (gain)/loss on derivatives, realized (gain)/loss on interest rate swaps, stock-based compensation
expense, impairment, 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 of derivatives, interest and finance costs, stock-based compensation expense,
impairment, 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/(loss) 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.
Adjusted EBITDA has certain limitations in use and should not be considered an alternative to net income/(loss),
operating income/(loss), cash flow from operating activities or any other measure of financial performance presented in
accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income/(loss). Adjusted EBITDA as
presented below may not be computed consistently with similarly titled measures of other companies and, therefore, might not be
comparable with other companies.
The following table sets forth a reconciliation of net income/(loss) to Adjusted EBITDA (unaudited) for the periods
presented:
(in U.S. dollars)
Net income/(loss)
Interest and finance costs
Unrealized (gain)/loss on derivatives
Realized (gain)/loss on interest rate swaps
Stock-based compensation expense
Depreciation and amortization
Adjusted EBITDA
Year ended
March 31, 2020
Year ended
March 31, 2019
$
$
111,841,258
36,105,541
18,206,769
(2,403,480)
3,227,686
66,262,530
233,240,304
$
$
(50,945,905)
40,649,231
7,816,401
(3,788,123)
5,476,234
65,201,151
64,408,989
Year ended
March 31, 2021
$
92,564,653
27,596,124
(7,202,880)
3,779,363
3,356,199
68,462,476
188,555,935
$
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Time charter equivalent rate
Time charter equivalent rate, or TCE rate, is a non-U.S. GAAP measure of the average daily revenue performance of a
vessel. TCE rate is a shipping industry performance measure used primarily to compare period‑to‑period changes in a shipping
company’s performance despite changes in the mix of charter types (such as time charters, voyage charters) under which the
vessels may be employed between the periods. Our method of calculating TCE rate is to divide revenue net of voyage expenses
by operating days for the relevant time period, which may not be calculated the same by other companies.
The following table sets forth a reconciliation of revenues to TCE rate (unaudited) for the periods presented:
(in U.S. dollars, except operating days)
Numerator:
Revenues
Voyage expenses
Time charter equivalent
Pool adjustment*
Time charter equivalent excluding pool adjustment*
Denominator:
Operating days
TCE rate:
Time charter equivalent rate
TCE rate excluding pool adjustment*
Year ended
March 31, 2021
Year ended
March 31, 2020
Year ended
March 31, 2019
$
$
$
$
$
315,938,812
(3,409,650)
312,529,162
5,579,857
318,109,019
7,891
39,606
40,313
$
$
$
$
$
333,429,998
(3,242,923)
330,187,075
(1,851,722)
328,335,353
7,715
42,798
42,558
$
$
$
$
$
158,032,485
(1,697,883)
156,334,602
—
156,334,602
7,189
21,746
21,746
* Adjusted for the effects of reallocations of pool profits in accordance with the pool participation agreements due to adjustments related to
speed and consumption performance of the vessels operating in the Helios Pool.
We determine operating days for each vessel based on the underlying vessel employment, including our vessels in the
Helios Pool, or the Company Methodology. If we were to calculate operating days for each vessel within the Helios Pool as a
variable rate time charter, or the Alternate Methodology, our operating days and fleet utilization would be increased with a
corresponding reduction to our TCE rate. Operating data using both methodologies is as follows:
Company Methodology:
Operating Days
Fleet Utilization
Time charter equivalent rate
Alternate Methodology:
Operating Days
Fleet Utilization
Time charter equivalent rate
Year ended
March 31, 2021
Year ended
March 31, 2020
Year ended
March 31, 2019
7,891
92.8 %
39,606
8,505
100.0 %
36,747
$
$
7,715
95.4 %
42,798
8,088
100.0 %
40,824
$
$
7,189
89.9 %
21,746
7,991
99.9 %
19,564
$
$
We believe that Our Methodology using the underlying vessel employment provides more meaningful insight into
market conditions and the performance of our vessels.
Liquidity and Capital Resources
Our business is capital intensive, and our future success depends on our ability to maintain a high‑quality fleet. As of
March 31, 2021, we had cash and cash equivalents of $79.3 million, current restricted cash of $5.3 million and non-current
restricted cash of $0.1 million.
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Our primary sources of capital during the year ended March 31, 2021 were $170.6 million in cash generated from
operations $24.0 million in net proceeds from the refinancing of the Cresques, $15.0 million in proceeds from the maturity of
U.S. treasury bills, and $2.8 million in net proceeds from the refinancing of the 2015 AR Facility. As of March 31, 2021, the
outstanding balance of our long-term debt, net of deferred financing fees of $10.6 million, was $591.5 million including $51.8
million of principal on our long-term debt scheduled to be repaid during the year ending March 31, 2022.
On August 5, 2019, our Board of Directors authorized the repurchase of up to $50.0 million of our common shares
through the period ended December 31, 2020. On February 3, 2020, our Board of Directors authorized an increase to our
Common Share Repurchase Program to repurchase up to an additional $50.0 million of our common shares. On December 29,
2020, our Board of Directors authorized an extension of and an increase to the remaining authorization of $41.4 million under our
Common Share Repurchase Program, which was set to expire on December 31, 2020. Following this Board action, we are now
authorized to repurchase up to $50.0 million of our common shares from December 29, 2020 through December 31, 2021. As of
March 31, 2021, our total purchases under this authority totaled 5.5 million of our common shares for an aggregate consideration
of $60.7 million. Following the increase and extension of the program, we currently have $47.9 million of available share
repurchase authority remaining. Purchases may be made at our discretion in the form of open market repurchase programs,
privately negotiated transactions, accelerated share repurchase programs or a combination of these methods. The actual amount
and timing of share repurchases are subject to capital availability, our determination that share repurchases are in the best interest
of our shareholders, and market conditions. We are not obligated to make any common share repurchases under the Common
Share Repurchase Program.
On April 23, 2020, we refinanced a 2015-built VLGC, the Cresques, pursuant to a memorandum of agreement and a
bareboat charter agreement (“Cresques Japanese Financing”). On April 21, 2020, we prepaid $28.5 million, which represented
the portion of the then outstanding principal of the 2015 Facility related to the 2015-built VLGC Cresques, using cash on hand
prior to the closing of the Cresques Japanese Financing. Pursuant to the Cresques Japanese Financing, we refinanced a 2015-built
VLGC, the Cresques, from which the proceeds of $52.5 million increased our unrestricted cash by $24.0 million after taking into
account the aforementioned $28.5 million we prepaid under the 2015 Facility. Refer to Note 9 to the consolidated financial
statements for further details on the prepayment of the 2015 Facility and the refinancing of the Cresques.
On April 29, 2020, we amended and restated the 2015 Facility, to among other things, refinance the Original
Commercial Tranche through the entry into the New Facilities (as defined above), including (i) a new senior secured term loan
facility in an aggregate principal amount of $155.8 million, which was used to prepay in full the outstanding principal amount
under the Original Commercial Tranche and for general corporate purposes and (ii) a new senior secured revolving credit facility
in an aggregate principal amount of up to $25.0 million, which we intend to use for general corporate purposes. Refer to Note 9
to the consolidated financial statements for further details on the refinancing of the Original Commercial Tranche of the 2015
Facility.
On June 11, 2018, we refinanced our 2007-built VLGC, the Captain John NP, pursuant to a memorandum of agreement
and a bareboat charter agreement (the “CJNP Japanese Financing”). In connection therewith, we transferred the Captain John NP
to the buyer for $48.3 million and, as part of the agreement, CJNP LPG Transport LLC, our wholly-owned subsidiary, bareboat
chartered the vessel back for a period of 6 years, with purchase options from the end of year 2 through a mandatory buyout by
2024. We continue to technically manage, commercially charter, and operate the Captain John NP. We received $21.7 million,
which increased our unrestricted cash, as part of the transaction, with $26.6 million to be retained by the buyer as a deposit (the
“CJNP Deposit”), which can be used by us towards the repurchase of the vessel either pursuant to an early buyout option or at the
end of the 6-year bareboat charter term. On October 13, 2020, we exercised the repurchase option under the CJNP Japanese
Financing and repurchased the Captain John NP for $18.3 million in cash and the application of the CJNP Deposit amount.
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On February 2, 2021, we announced a tender offer to purchase up to 7,407,407, or about 14.8%, of our then outstanding
common shares at a price of $13.50 per share. Based on preliminary results indicating that the tender offer was oversubscribed,
we elected to increase the number of shares accepted for payment by 997,739, or slightly less than 2% of our then outstanding
shares. The number of shares we purchased and canceled from each tendering shareholder was prorated so our purchases in the
tender offer totaled of 8,405,146 shares, or approximately 16.8% of our then outstanding common shares, for an aggregate
purchase price of approximately $113.5 million.
Operating expenses, including expenses to maintain the quality of our vessels in order to comply with international
shipping standards and environmental laws and regulations, the funding of working capital requirements, long-term debt
repayments, financing costs, and commitments under the bareboat charter for a newbuilding dual-fuel VLGC as described in
Note 18 to our consolidated financial statements represent our short-term, medium-term and long-term liquidity needs as of
March 31, 2021. We anticipate satisfying our liquidity needs for at least the next twelve months with cash on hand and cash from
operations. We may also seek additional liquidity through alternative sources of debt financings and/or through equity financings
by way of private or public offerings. However, if these sources are insufficient to satisfy our short-term liquidity needs, or to
satisfy our future medium-term or long-term liquidity needs, we may need to seek alternative sources of financing and/or
modifications of our existing credit facility and financing arrangements. There is no assurance that we will be able to obtain any
such financing or modifications to our existing credit facility and financing arrangements on terms acceptable to us, or at all.
As part of our growth strategy, we will continue to consider strategic opportunities, including the acquisition of
additional vessels. We may choose to pursue such opportunities through internal growth or joint ventures or business
acquisitions. We expect to finance the purchase price of any future acquisitions either through internally generated funds, public
or private debt financings, public or private issuances of additional equity securities or a combination of these forms of financing.
Cash Flows
The following table summarizes our cash and cash equivalents provided by/(used in) operating, financing and investing
activities for the periods presented:
Net cash provided by operating activities
Net cash provided by/(used in) investing activities
Net cash used in financing activities
Net increase/(decrease) in cash, cash equivalents, and restricted cash
March 31, 2021
March 31, 2020
March 31, 2019
$
$
170,595,696
1,021,090
(174,484,467)
(2,661,928)
$
$
169,036,407
(33,144,834)
(114,651,756)
20,916,481
$
$
8,883,433
(4,520,304)
(67,005,777)
(62,895,734)
Operating Cash Flows. Net cash provided by operating activities for the year ended March 31, 2021 was $170.6 million
compared with $169.0 million for the year ended March 31, 2020. The increase is primarily related to changes in working capital,
mainly from amounts due from the Helios Pool as distributions from the Helios Pool are impacted by the timing of the
completion of voyages and spot market rates, partially offset by a reduction in operating income.
Net cash provided by operating activities for the year ended March 31, 2020 was $169.0 million compared with $8.9
million for the year ended March 31, 2019. The increase is primarily related to a sharp increase in our operating income for the
year ended March 31, 2020 from increased TCE rates.
Net cash flow from operating activities depends upon our overall profitability, market rates for vessels employed on
voyage charters, charter rates agreed to for time charters, the timing and amount of payments for drydocking expenditures and
unscheduled repairs and maintenance, fluctuations in working capital balances and bunker costs.
Investing Cash Flows. Net cash provided by investing activities was $1.0 million for the year ended March 31, 2021,
compared with net cash used in investing activities of $33.1 million for the year ended March 31, 2020. For the year ended
March 31, 2021, net cash provided by investing activities was comprised of $15.0 million in proceeds from the maturity of short-
term investments, partially offset by our capital expenditures of $9.5 million and $4.7 million in purchases of investment
securities.
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Net cash used in investing activities was $33.1 million for the year ended March 31, 2020, compared with net cash used
in investing activities of $4.5 million for the year ended March 31, 2019. For the year ended March 31, 2020, net cash used in
investing activities was comprised of our capital expenditures of $19.9 million and $14.9 million in purchases of short-term
investments, partially offset by $1.8 million in proceeds from the sale of investment securities. For the year ended March 31,
2019, net cash used in investing activities comprised primarily of our capital expenditures of $4.0 million and $0.5 million in
purchases of short-term investments.
Financing Cash Flows. Net cash used in financing activities was $174.5 million for the year ended March 31, 2021,
compared with net cash used in financing activities of $114.7 million for the year ended March 31, 2020. For the year ended
March 31, 2021, net cash used in financing activities consisted of the repurchase of common stock of $126.2 million, repayments
of long-term debt of $99.4 million, and payments of financing costs of $4.2 million, partially offset by $55.4 million of proceeds
from long-term debt borrowings.
Net cash used in financing activities was $114.7 million for the year ended March 31, 2020, compared with net cash
used in financing activities of $67.0 million for the year ended March 31, 2019. For the year ended March 31, 2020, net cash used
in financing activities consisted of repayments of long-term debt of $64.0 million and treasury stock repurchases of $50.6 million.
For the year ended March 31, 2019, net cash used in financing activities consisted of repayments of long-term debt of $130.2
million, treasury stock repurchases of $1.3 million, and payment of debt financing costs of $0.6 million, partially offset by
proceeds from long-term debt borrowings of $65.1 million related to the CJNP Japanese Financing, CMNL/CJNPL Japanese
Financing, and our 2018 refinancing of our 2008-built VLGC, the Captain Nicholas ML, pursuant to a memorandum of
agreement and a bareboat charter agreement (the “CNML Japanese Financing”). For more information with respect to the
CMNL/CJNP Japanese Financing, the CMNL/CJNP Japanese Financing and the CNML Japanese Financing please see Note 9 to
our audited consolidated financial statements included herein
Capital Expenditures. LPG transportation is a capital‑intensive business, requiring significant investment to maintain
an efficient fleet and to stay in regulatory compliance.
We are generally required to complete a drydock a vessel once every 30 to 36 months for inspection of the underwater
parts of the vessel. However, for vessels not exceeding 15 years that have means to facilitate underwater inspection in lieu of
drydocking, the drydocking can be skipped and be conducted concurrently with the special survey. Certain cargo vessels that
meet the system requirements set by classification societies may qualify for extended drydocking, which extends the 5-year
period to 7.5 years, by replacing certain dry-dockings with in-water surveys. Drydocking each vessel takes approximately 10 to
20 days. We spend significant amounts for scheduled drydocking (including the cost of classification society surveys) for each of
our vessels.
As our vessels age and our fleet expands, our drydocking expenses will increase. We estimate the current cash outlay for
a VLGC special survey to be approximately $1.0 million per vessel (excluding any capital improvements, such as scrubbers and
ballast water management systems, to the vessel that may be made during such drydockings) and the cost of an intermediate
survey to be between $100,000 and $200,000 per vessel. Ongoing costs for compliance with environmental regulations are
primarily included as part of our drydocking and classification society survey costs. Additionally, ballast water management
systems are expected to be installed on three of our VLGCs between November 2021 and July 2024 for approximately $0.8
million per vessel. Further, in October 2016, the International Maritime Organization (the “IMO”) set January 1, 2020 as the
implementation date for vessels to comply with its low sulfur fuel oil requirement, which cuts sulfur levels from 3.5% to 0.5%.
We may comply with this regulation by (i) consuming compliant fuels on board (0.5% sulfur), which are readily available
globally since our last quarterly filing, but at a significantly higher cost; (ii) continuing to consume high-sulfur fuel oil by
installing scrubbers for cleaning of the exhaust gases to levels at or below compliance with regulations (0.5% sulfur); or (iii) by
retrofitting vessels to be powered by liquefied natural gas or LPG, which may be a viable option subject to the relative pricing of
compliant low-sulfur fuel (0.5% sulfur) and LPG. Such costs of compliance with the IMO’s low sulfur fuel oil requirement are
significant and could have an adverse effect on our operations and financial results. Currently, eleven of our technically-managed
VLGCs are equipped with scrubbers while one additional vessel is expected to be equipped during June 2021. We had
contractual commitments for scrubber purchases of $1.5 million as of March 31, 2021. These amounts only reflect firm
commitments for the purchase of scrubber parts and materials as of March 31, 2021. We are not aware of any other proposed
regulatory changes or environmental
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laws that we expect to have a material impact on our current or future results of operations that we have not already considered.
Please see "Item 1A. Risk Factors—Risks Relating to Our Company—We may incur increasing costs for the drydocking,
maintenance or replacement of our vessels as they age, and, as our vessels age, the risks associated with older vessels could
adversely affect our ability to obtain profitable charters.”
On March 31, 2021, we entered into a thirteen year bareboat agreement to charter-in a newbuilding dual-fuel VLGC that
is expected to be delivered from Kawasaki Heavy Industries in March 2023. The financing structure of the newbuilding is
analogous to that of our Japanese financings pursuant to which a third-party will purchase the vessel and bareboat charter the
vessel to us. As part of the agreement, we control the building of the vessel and its use after delivery. The vessel will be built to
our specifications; we will supervise the building of the vessel to meet these specifications; and we will technically and
commercially manage the vessel after its delivery. Under the agreement, we have commitments of $24 million of predelivery
costs as well as the cost of additional features to meet our specifications and supervision costs for an aggregate total of
approximately $25 million. As of March 31, 2021, we expect to settle the commitments under the agreement with installment
payments totaling $16.0 million in the 12 months following March 31, 2021, of which $8.0 million was paid in April 2021, and
approximately $9.0 million during the year ended March 31, 2023. As of March 31, 2021, construction of the vessel has not
commenced.
Description of Our Debt Obligations
See Note 9 to our consolidated financial statements included herein for a description of our debt obligations.
Recent Accounting Pronouncements
Refer to Note 2 of our consolidated financial statements included herein.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are exposed to various market risks, including changes in interest rates, foreign currency fluctuations, and inflation.
Interest Rate Risk
The LPG shipping industry is capital intensive, requiring significant amounts of investment. Much of this investment is
provided in the form of long-term debt. Our debt agreement contains interest rates that fluctuate with LIBOR. We have entered
into interest rate swap agreements to hedge a majority of our exposure to fluctuations of interest rate risk associated with our
2015 AR Facility. We have hedged $366.3 million of amortizing principal of the 2015 AR Facility as of March 31, 2021 and thus
increasing interest rates could adversely impact our future earnings. For the 12 months following March 31, 2021, a hypothetical
increase or decrease of 20 basis points in the underlying LIBOR rates would result in an increase or decrease of our interest
expense on our unhedged interest-bearing debt by approximately $0.1 million assuming all other variables are held constant. See
Notes 9 and 19 to our audited consolidated financial statements included herein for a description of our debt obligations and
interest rate swaps, respectively.
Foreign Currency Exchange Rate Risk
Our primary economic environment is the international LPG shipping market. This market utilizes the U.S. dollar as its
functional currency. Consequently, our revenues are in U.S. dollars and the majority of our operating expenses are in U.S.
dollars. However, we incur some of our expenses in other currencies, particularly Euro, Singapore Dollar, Danish Krone,
Japanese Yen, British Pound Sterling, and Norwegian Krone. The amount and frequency of some of these expenses, such as
vessel repairs, supplies and stores, may fluctuate from period to period. Depreciation in the value of the U.S. dollar relative to
other currencies will increase the cost of us paying such expenses. For the year ended March 31, 2021, 23% of our expenses
(excluding depreciation and amortization, interest and finance costs and gain/loss on derivatives), were in currencies other than
the U.S. dollar, and as a result we expect the foreign exchange risk associated with these operating expenses to be immaterial. We
do not have foreign exchange exposure in respect of our credit facility and interest rate swap agreements, as these are
denominated in U.S. dollars.
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The portion of our business conducted in other currencies could increase in the future, which could expand our exposure
to losses arising from currency fluctuations.
Inflation
Certain of our operating expenses, including crewing, insurance and drydocking costs, are subject to fluctuations caused
by market forces. Crewing costs in particular have risen over the past number of years as a result of a shortage of trained crews.
Please see "Item 1A. Risk Factors—We may be unable to attract and retain key management personnel and other employees in
the shipping industry without incurring substantial expense as a result of rising crew costs, which may negatively affect the
effectiveness of our management and our results of operations." A shortage of qualified officers makes it more difficult to crew
our vessels and may increase our operating costs. If this shortage were to continue or worsen, it may impair our ability to operate
and could have an adverse effect on our business, financial condition and operating results. Inflationary pressures on bunker (fuel
and oil) costs could have a material effect on our future operations if the number of vessels employed on voyage charters
increases. In the case of any vessels that are time‑chartered to third parties, it is the charterers who pay for the fuel. If our vessels
are employed under voyage charters, freight rates are generally sensitive to the price of fuel. However, a sharp rise in bunker
prices may have a temporary negative effect on our results since freight rates generally adjust only after prices settle at a higher
level. Please see "Item 1A. Risk Factors—Changes in fuel, or bunker, prices may adversely affect profits.”
Forward Freight Agreements
From time to time, we may take hedging or speculative positions in derivative instruments, including FFAs. The usage
of such derivatives can lead to fluctuations in our reported results from operations on a period-to-period basis. Generally, freight
derivatives may be used to hedge our exposure to the spot market for a specified route and period of time. Upon settlement, if the
contracted charter rate is less than the average of the rates reported on an identified index for the specified route and time period,
the seller of the FFA is required to pay the buyer the settlement sum, being an amount equal to the difference between the
contracted rate and the settlement rate, multiplied by the number of days of the specified period. Conversely, if the contracted rate
is greater than the settlement rate, the buyer is required to pay the seller the settlement sum. If we take positions in FFAs or other
derivative instruments we could suffer losses in the settling or termination of these agreements. This could adversely affect our
results of operations and cash flows. During the year ended March 31, 2020, we entered into a FFAs as an economic hedge to
reduce the risk on vessels trading in the spot market and to take advantage of short-term fluctuations in market prices. We do not
classify these freight derivatives as cash flow hedges for accounting purposes and therefore gains or losses are recognized in
earnings. As of March 31, 2020, we had FFA derivative instruments classified under current liabilities of $2.6 million. We had no
outstanding FFA positions as of March 31, 2021.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial information required by this Item is set forth on pages F-1 to F-33 and is filed as part of this annual report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated
the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e)
under the Exchange Act, as of the end of the period covered by this Annual Report on Form 10-K.
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Based on this evaluation, our management concluded that our disclosure controls and procedures were effective as of
March 31, 2021. Our disclosure controls and procedures are designed to provide reasonable assurance that information required
to be disclosed by the Company in the reports that it files or submits to the Commission under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in Commission rules and forms and that such information
is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining an adequate system of internal control over financial
reporting, as defined in the Rule 13a-15(f) and 15d-15(f) of the Exchange Act. Our management conducted an evaluation of our
effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Our internal control over
financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of our financial statements in accordance with U.S. GAAP, and that our receipts and
expenditures are being made in accordance with authorizations of our management and directors; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a
material effect on the financial statements. Because of the inherent limitations of internal controls over financial reporting,
misstatements may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the
internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Based on the
evaluation, management concluded that our internal control over financial reporting was effective as of March 31, 2021.
The effectiveness of our internal control over financial reporting as of March 31, 2021 has been audited by Deloitte
Certified Public Accountants S.A., an independent registered public accounting firm, as stated in their report which appears
herein.
Changes in Internal Control over Financial Reporting
Our management with the participation of our principal executive officer and principal financial officer or persons
performing similar functions has determined that no change in our internal control over financial reporting (as that term is
defined in Rules 13(a)-15(f) and 15(d)-15(f) of the Exchange Act) occurred during the fourth fiscal quarter of our fiscal year
ended March 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.
Limitation on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and our internal control over financial reporting, management
recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives. In addition, the design of disclosure controls and our internal control over financial
reporting must reflect the fact that there are resource constraints and that management is required to apply its judgment in
evaluating the benefits of possible controls and procedures relative to their costs.
ITEM 9B. OTHER INFORMATION.
None
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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Class II Directors — Terms expiring at the Company’s 2021 Annual Meeting of Shareholders
PART III
Øivind Lorentzen, 70, has served as a director of the Company since July 2013 and is currently the Chairman of the
Audit Committee. Mr. Lorentzen is currently Managing Director of Northern Navigation, LLC. Mr. Lorentzen was Non-
Executive Vice Chairman of SEACOR Holdings Inc. from early 2015 to April 2021, prior to which he was its Chief Executive
Officer. From 1990 until September 2010, Mr. Lorentzen was President of Northern Navigation International, Ltd., an investment
management and ship-owning company concentrating in specialized marine transportation and ship finance. From 1979 to 1990,
Mr. Lorentzen was Managing Director of Lorentzen Empreendimentos S.A., an industrial and shipping group in Brazil, and he
served on its board of directors until December 2005. From 2001 to 2008, Mr. Lorentzen was Chairman of NFC Shipping Funds,
a leading private equity fund in the maritime industry. Mr. Lorentzen is a director of the Global Maritime Forum, an international
not-for-profit organization dedicated to promoting the potential of the global maritime industry. Mr. Lorentzen earned his
undergraduate degree at Harvard College and his MBA from Harvard Business School. Mr. Lorentzen’s expertise in the maritime
and shipping industries provides him with the important qualifications and skills to serve as a member of our Board of Directors.
John C. Lycouris, 71, serves as Chief Executive Officer of Dorian LPG (USA) LLC and is a director of the Dorian LPG
Ltd. since its inception in July 2013. Previously, Mr. Lycouris was a Director and VP/Treasurer of Eagle Ocean, Inc. beginning in
1993 and of Eagle Ocean Transport, Inc. beginning in 2004, where he attended to pre- and post-delivery financings of
newbuilding and second-hand vessels in the tanker, LPG, and dry bulk sectors, including execution of a multitude of sale and
purchase contracts. Mr. Lycouris’ responsibilities also included operational and technical matters as well as investment strategy
for a number of portfolios of foreign principals represented by the Companies. Before joining Eagle Ocean, Inc., Mr. Lycouris
served as Director of Peninsular Maritime Ltd. a ship brokerage firm in London, UK, which he joined in 1974, and managed the
Finance and Accounts departments. Mr. Lycouris holds a BS in Business Administration from Ithaca College and an MBA in
Finance from Cornell University. Mr. Lycouris’ successful leadership and executive experience, along with his deep knowledge
of the commercial, technical and operational aspects of shipping in general and LPG shipping in particular, provide him with the
qualifications and skills to serve as a member of our Board of Directors.
Ted Kalborg, 70, has served as a director of the Company since December 12, 2014 and is currently a member of the
Audit Committee and Compensation Committee. Mr. Kalborg is the founder of the Tufton Group, a fund management group he
founded in 1985 that specializes in the shipping and energy sectors. The group manages hedge funds and private equity funds.
Mr. Kalborg’s primary focus has been corporate reorganizations. Mr. Kalborg holds a BA from Stockholm School of Economics
and received an MBA from Harvard Business School. Mr. Kalborg’s diversified experience in the oil drilling, shipping, and
investment industries, his specialty in maritime and transportation fund management, and his extensive background serving as
director of several other companies equip him with the qualifications and skills to act as a member of our Board of Directors.
Class III Directors — Terms expiring at the Company’s 2022 Annual Meeting of Shareholders
John C. Hadjipateras, 70, has served as Chairman of the Board and as our President and Chief Executive Officer and as
President of Dorian LPG (USA) LLC since our inception in July 2013. Mr. Hadjipateras has been actively involved in the
management of shipping companies since 1972. From 1972 to 1992, Mr. Hadjipateras was the Managing Director of Peninsular
Maritime Ltd. in London and subsequently served as President of Eagle Ocean, which provides chartering, sale and purchase,
protection and indemnity insurance and shipping finance services. Mr. Hadjipateras has served as a member of the boards of the
Greek Shipping Co-operation Committee and of the Council of INTERTANKO, and has been a member of the Baltic Exchange
since 1972 and of the American Bureau of Shipping since 2011. Mr. Hadjipateras also served on the Board of Advisors of the
Faculty of Languages and Linguistics of Georgetown University and is a trustee of Kidscape, a leading U.K. charity organization.
Mr. Hadjipateras was a director of SEACOR Holdings Inc., a global provider of marine transportation equipment and logistics
services, from 2000 to 2013. We believe that Mr. Hadjipateras’ expertise in the maritime and shipping industries provides him
with the qualifications and skills to serve as a member of our Board of Directors.
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Malcolm McAvity, 70, has served as a director of the Company since January 2015 and is currently the Chairman of our
Nominating and Corporate Governance Committee and a member of our Compensation Committee. Mr. McAvity formerly
served as Vice Chairman of Phibro LLC, one of the world’s leading international commodities trading firms, from 1986 through
2012. Mr. McAvity has held various positions trading crude oil and other commodities. Mr. McAvity earned a BA from Stanford
University and an MBA from Harvard Business School. We believe that Mr. McAvity’s experience in commodities trading
provides him with the qualifications and skills to serve as a member of our Board of Directors.
Class I Directors — Terms expiring at the Company’s 2023 Annual Meeting of Shareholders
Thomas J. Coleman, 54, has served as a director of the Board since September 2013 and is currently our Lead
Independent Director, Chairman of the Company’s compensation committee (the “Compensation Committee”) and a member of
the Company’s nominating and corporate governance committee (the “Nominating and Corporate Governance Committee”). Mr.
Coleman has served as co-Founder and co-President of Kensico Capital Management Corporation (“Kensico”) since 2000. Mr.
Coleman is also the co-principal of each of Kensico’s affiliates. Prior to working with Kensico and its affiliates, Mr. Coleman
was employed by Halo Capital Partners (“Halo”). Prior to his employment at Halo, Mr. Coleman founded and served as Chief
Executive Officer and a director of PTI Holding Inc. from 1990 until 1995. From October 2012 until January 2014, Mr. Coleman
served as a director of WebMD. From February 2011 until its sale in January 2012, Mr. Coleman served as a director of Tekelec,
a publicly traded global provider of core network solutions. We believe that Mr. Coleman’s knowledge of corporate finance
provides him with the qualifications and skills to serve as a member of our Board of Directors.
Christina Tan, 68, has served as a director of the Company since May 1, 2015 and is currently a member of the Audit
and Nominating and Corporate Governance Committees. Ms. Tan has been the Chief Executive Officer of the MT Maritime
Management Group (“MTM Group”) since the beginning of 2020. Ms. Tan has been an officer with the MTM Group for over 30
years, performing in a variety of capacities, including finance and chartering, and was also a board member of Northern Shipping
Funds from 2008 to 2015, at which point she remained as a member of the Limited Partnership Advisory Committee (LPAC).
For eight years prior to joining MTM Group, Ms. Tan was Vice President of Finance & Trading for Socoil Corporation, a major
Malaysian palm oil refiner and trading company. Ms. Tan earned a BA in Economics and Mathematics from Western State
College of Colorado. We believe that Ms. Tan’s long-standing experience in the shipping industry and in maritime investments
provide her with the qualifications and skills to serve as a member of our Board of Directors.
Information about Executive Officers Who Are Not Directors
Theodore B. Young, 53, has served as our Chief Financial Officer, Treasurer and Principal Financial and Accounting
Officer since July 2013, as Chief Financial Officer and Treasurer of Dorian LPG (USA) LLC since July 2013, and as head of
corporate development for Eagle Ocean from 2011 to 2013. From 2004 to 2011, Mr. Young was a Senior Managing Director and
member of the Investment Committee at Irving Place Capital (“IPC”), where he worked on investments in the industrial,
transportation and business services sectors. Prior to joining IPC, Mr. Young was a principal at Harvest Partners, a New York-
based middle market buyout firm, from 1997 to 2004. There, Mr. Young was active in industrial transactions and played a key
role in the firm’s multinational investment strategy. Prior to his career in private equity, Mr. Young was an investment banker
with Merrill Lynch & Co., Inc. and SBC Warburg Dillon Read and its predecessors in New York, Zurich, and London. Mr.
Young holds an AB from Dartmouth College and an MBA from the Wharton School of the University of Pennsylvania with a
major in accounting.
Tim T. Hansen, 52, has served as our Chief Commercial Officer since 2018. He joined the Company in 2014 as
Chartering Manager and in 2015 became the Managing Director for the Helios LPG Pool London Office. In 2019 he joined the
Helios Pool Board of Directors and has since 2020 served as Chairman of the Board. Mr. Hansen began his career at sea in 1985
with AP Moeller Maersk (“Maersk”) rising through the ranks in tankers, container and dry cargo vessels, ending his seagoing
career as captain of various sized LPG carriers. Mr. Hansen was also a Lieutenant in the Royal Danish Navy from 1992 through
1993, where he served as Skipper on Vessel Traffic Services (“VTS”) vessels, performed various coast guard services, and
worked as a VTS Operator at Green Belt Traffic Service. Mr. Hansen returned to Maersk in 1993, where he eventually came
ashore in 1999 with responsibilities in several sectors including supercargo, operations,
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and chartering in the dry cargo segment, Maersk Line and was Senior Charterer in Broestroem. In 2002, Mr. Hansen began to
focus on the LPG sector and from 2004 until Maersk's exit from the LPG sector in 2013 was Senior Charterer responsible for the
daily employment of handy, mid-size and VLGC vessels.
Alexander C. Hadjipateras, 41, has served as our Executive Vice President of Business Development since July 2013
and is the son of John C. Hadjipateras, the Chairman of the Board of Directors and President and Chief Executive Officer of the
Company. Mr. Alexander C. Hadjipateras’ main areas of focus are business development, vessel sale and purchase, and assisting
in the management of the Company’s operations in Athens, Greece. Since joining Eagle Ocean in 2006, Mr. Alexander C.
Hadjipateras been involved in its newbuilding program at Sumitomo Shipyard in Japan and Hyundai Heavy Industries in South
Korea and worked on Aframax spot chartering. Prior to joining Eagle Ocean, Mr. Alexander C. Hadjipateras worked as a
Business Development Manager at Avenue A/ Razorfish, a leading digital advertising agency based in San Francisco. Mr.
Alexander C. Hadjipateras has served as a director of the Helios LPG Pool since 2018, a director of the UK P&I Club since 2016,
and a director on the Greek Shipping Corporation Committee (GSCC) since 2018. Mr. Alexander C. Hadjipateras graduated from
Georgetown University with a BA in history in 2001 and is currently completing an executive MBA at HEC Paris.
Audit Committee
The Audit Committee, established in accordance with Section 3(a)(58)(A) of the Exchange Act, currently consists of
Messrs. Lorentzen and Kalborg and Ms. Tan, with Mr. Lorentzen serving as its chairperson. The Audit Committee meets a
minimum of four times per year, and during such meetings, the Audit Committee meets with the Company’s management,
internal auditors and independent external auditors separately from the Board.
Under the Audit Committee charter, the Audit Committee assists the Board in overseeing the quality of the Company’s
financial statements and its financial reporting practices. To that end, the Audit Committee has direct responsibility for the
appointment, replacement, compensation, retention, termination and oversight of the work of the independent registered public
accounting firm engaged to prepare an audit report, to perform other audits and to perform review or attest services for us. The
Audit Committee confers directly with the Company’s independent registered public accounting firm. The Audit Committee also
assesses the outside auditors’ qualifications and independence. The Audit Committee is responsible for the pre-approval of all
audit and non-audit services performed by our independent registered public accounting firm. The Audit Committee acts on
behalf of the Board in reviewing the scope of the audit of the Company’s financial statements and results thereof. Our Chief
Financial Officer has direct access to the Audit Committee. The Audit Committee also oversees the operation of our internal
controls covering the integrity of our financial statements and reports, compliance with laws, regulations and corporate policies,
and the qualifications, performance and independence of our independent registered public accounting firm. Based on this
oversight, the Audit Committee advises the Board on the adequacy of the Company’s internal controls, accounting systems,
financial reporting practices and the maintenance of the Company’s books and records. The Audit Committee is also responsible
for determining whether any waiver of our Code of Ethics will be permitted and for reviewing and determining whether to
approve any related party transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K. Annually, the Audit
Committee recommends that the Board request shareholder ratification of the appointment of the independent registered public
accounting firm. The responsibilities and activities of the Audit Committee are further described in the Audit Committee charter.
Our Board of Directors has determined that the Audit Committee consists entirely of directors who meet the
independence requirements of the NYSE listing standards and Rule 10A-3 of the Exchange Act. The Board has also determined
that each member of the Audit Committee has sufficient knowledge and understanding of the Company’s financial statements to
serve on the Audit Committee and is financially literate within the meaning of the NYSE listing standards as interpreted by the
Board. The Board has further determined that Messrs. Kalborg and Lorentzen and Ms. Tan satisfy the definition of “audit
committee financial expert” as defined under federal securities laws.
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Anti-Bribery and Corruption Policy
We have an Anti-Bribery and Corruption Policy which memorializes our commitment to adhere faithfully to both the
letter and spirit of all applicable anti-bribery legislation in the conduct of our business activities worldwide.
Code of Conduct and Ethics
We have adopted a Code of Ethics applicable to officers, directors and employees (the “Code of Ethics”), which fulfills
applicable guidelines issued by the Commission.
Our Code of Ethics and our Anti-Bribery and Corruption Policy can be found on our website at
http://www.dorianlpg.com/investor-center/corporate-governance/. We will also provide a hard copy of our Code of Ethics and
Anti-Bribery and Corruption Policy free of charge upon written request to Dorian LPG Ltd. c/o Dorian LPG (USA) LLC, 27
Signal Road, Stamford, Connecticut 06902. Our employees are required to make written reaffirmation of their commitment to the
Anti-Bribery and Corruption Policy and Code of Ethics on an annual basis. Any waiver that is granted, and the basis for granting
the waiver, will be publicly communicated as appropriate, including through posting on our website, as soon as practicable. We
have granted no waivers to the Anti-Bribery and Corruption Policy since its inception. We granted no waivers under our Code of
Ethics during the fiscal year ended March 31, 2021. We intend to post any amendments to and any waivers of our Code of Ethics
on our website within four business days.
Shareholder Nominations
There have been no material changes to the procedures by which security holders may recommend nominees to our
board of directors.
Delinquent Section 16(A) Reports
Section 16(a) of the Exchange Act requires our directors and executive officers, and beneficial owners of more than ten
percent of any class of our registered equity securities including our common stock, to file with the Commission initial reports of
beneficial ownership and reports of changes in beneficial ownership of common stock and other equity securities of the
Company, and to provide the Company with a copy of those reports.
To the Company’s knowledge, based solely on a review of copies of such reports furnished to the Company, and written
representations that no reports were required, during the fiscal year ended March 31, 2021, all Section 16(a) filing requirements
applicable to the Company’s officers, directors, and greater than ten percent beneficial owners were complied with, except for
one late Form 4 pertaining to one transaction for our Executive Vice President of Business Development, Mr. Alexander C.
Hadjipateras, and one late Form 4 pertaining to one transaction for one of our directors, Mr. Ted Kalborg.
ITEM 11. EXECUTIVE COMPENSATION.
Compensation Discussion and Analysis
General
This Compensation Discussion and Analysis (“CD&A”) provides information regarding the compensation program for
our executive officers in the fiscal year ended March 31, 2021 (“Fiscal Year 2021”). It describes our compensation philosophy;
the objectives of the executive compensation program in Fiscal Year 2021; the elements of the compensation program; and how
each element fits into our overall compensation philosophy. Certain information with respect to the compensation program for
our executive officers in the fiscal year ended March 31, 2020 (“Fiscal Year 2020”) and in the fiscal year ended March 31, 2022
(“Fiscal Year 2022”) has also been included where the Compensation Committee deemed that such information may be helpful to
give context to the disclosure herein.
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Our named executive officers (or “NEOs”), consisting of our principal executive officer (“PEO”), principal financial
officer (“PFO”), and our three most highly compensated executive officers other than our PEO and PFO for Fiscal Year 2021 are:
●
●
●
●
John C. Hadjipateras, President, Chief Executive Officer, and Chairman of the Board of Directors;
Theodore B. Young, Chief Financial Officer;
John C. Lycouris, Chief Executive Officer of Dorian LPG (USA) LLC and a Director on our Board of Directors;
Tim T. Hansen, Chief Commercial Officer; and
● Alexander C. Hadjipateras, Executive Vice President of Business Development.
Highlights for the Fiscal Year Ended 2021
◾ Revenues of $315.9 million.
◾ TCE(1) per operating day rate for our fleet of $39,606.
◾ Net income of $92.6 million, or $1.86 EPS.
◾ Adjusted EBITDA(1) of $188.6 million.
◾ Repurchased over $124.8 million of our common stock, or approximately 9.6 million shares, between our previously
announced tender offer and common share repurchase program.
◾ Completed refinancing of commercial tranche of 2015 AR facility resulting in lower interest cost and improved terms.
◾ Completed refinancing of Cresques releasing $24.0 million of cash.
◾ Successfully completed 6 drydockings during the fiscal year.
◾ ESG commitment – AER ahead of trajectory levels for year ended December 31, 2020, crew rotations largely returned
to pre-pandemic levels, and anticipate publication of first ESG report.
(1) Time Charter Equivalent and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of revenues to
TCE and net income to adjusted EBITDA included in Item 7. Management Discussion and Analysis of this annual
report.
Compensation Philosophy and Objectives
Our compensation philosophy is designed to establish and maintain an executive compensation program that attracts,
retains, and rewards talented executives who possess the skills necessary to help the Company achieve its strategic objectives.
We believe that the compensation program should (i) align the interests of executives with those of stockholders in achieving and
sustaining increases in stockholder value over the short and long-term, (ii) encourage and reward achievement of our annual and
longer-term performance objectives, (iii) promote the long-term success of the Company through an appropriate balance of
current and long-term compensation opportunities, (iv) differentiate pay based on individual and Company performance, (v)
provide competitive compensation relative to the market and (vi) balance incentives for risk management.
As a result, we endeavor to pay competitive total compensation that is guided by market rates and tailored to account for
the specific needs and responsibilities of the particular position as well as the unique qualifications of the individual executive.
Historically, in light of the cyclical nature of the shipping industry and the volatile and unpredictable markets in which we
operate, we have not established specific performance targets for incentive compensation to our NEOs. We apply judgment and
reasonable discretion in making compensation decisions to avoid relying on a formulaic
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program, taking into account both what has been accomplished and how it has been accomplished in light of the existing
commercial environment.
Our goal is to maintain an executive compensation program that is competitive, based on the principles of pay-for-
performance, and that follows best practices in executive compensation and corporate governance. To this end, the Compensation
Committee routinely evaluates its practices and programs with respect to executive compensation to identify opportunities for
improvement.
Key factors affecting the compensation decisions for the NEOs included key financial and statistical measurements, the
design and implementation by the NEOs of (i) strategic objectives for us, such as the design and implementation of our
commercial strategy, including health and safety initiatives and retrofitting of our vessels with scrubbers; as well as the
achievement of our operational goals or goals in a particular area of responsibility for the respective NEOs, such as operations or
chartering, (ii) a finance strategy for us, including obtaining or renegotiating financing on favorable terms in a difficult market
environment, and (iii) continuing our commitment to our ESG goals including carbon reduction, sustainability, and transparency.
In addition, we do not provide for excise tax gross-ups, supplemental executive retirement plans and for the Fiscal Year 2021, as
a general matter, we did not provide perquisites for our executive officers. While the Compensation Committee may deem it
appropriate to provide perquisites for its executive officers in the future, it has no current intention to do so.
Roles in Setting Executive Compensation
Role of the Compensation Committee
For Fiscal Year 2021, the Compensation Committee consisted of three members of the Board, each of whom qualified
as “independent” under the NYSE listing standards and applicable independence standards under Rule 10A-3 of the Securities
Exchange Act of 1934 (the “Exchange Act”). In view of the importance that independence plays in executive compensation, the
Compensation Committee and the other independent directors regularly meet in executive session, without any members
of management present.
The primary role of the Compensation Committee is to establish the Company’s compensation philosophy and strategy
and to ensure that the Company’s executives are compensated in a manner consistent with the articulated philosophy and
strategy. The Compensation Committee takes many factors into account when making compensation decisions with respect to the
NEOs and other senior executives, including:
● Our overall performance;
●
●
●
Individual performance, tenure, experience, and long-term potential;
Internal pay equity among the senior leadership team; and
External, publicly available market data on competitive compensation levels and practices.
Role of the CEO in Setting CEO and Other Executives’ Compensation
All decisions relating to the compensation of Mr. J. Hadjipateras, our Chairman of the Board of Directors and Chief
Executive Officer (our “CEO”), are made by the Compensation Committee without him or other members of management
present. In making determinations regarding compensation for Dorian’s other NEOs and other selected senior executives, the
Compensation Committee considers the recommendations of our CEO (for all executives other than himself).
Our CEO makes recommendations to the Compensation Committee with respect to salary, short-term incentive (bonus),
and long-term incentive awards for all executive officers other than himself. He develops those recommendations based on
competitive market information, our compensation strategy, his assessment of individual performance, the scope of
responsibilities, experience level, time in position, and long-term potential of the particular executive. Our CEO’s
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recommendations are subject to review, modification, and ultimately approval of the Compensation Committee or, when
sufficiently material, the full Board. All Fiscal Year 2021 compensation decisions reported herein (including base salaries, annual
and long-term compensation) were made by the Compensation Committee.
Role of Outside Advisors
The Compensation Committee has the authority to engage independent advisors to assist in carrying out its duties. In
April 2021, the Compensation Committee engaged Steven Hall & Partners (“Steven Hall”) as its independent compensation
consultant to advise on executive and director compensation arrangements and related governance matters. Additionally, Steven
Hall has assisted management in the preparation of this CD&A.
Compensation Consultant Conflict of Interest Assessment: As required by rules adopted by the SEC under the Dodd-
Frank Act, the Compensation Committee assessed the relevant factors, including those set forth in Rule 10C-1(b)(4)(i) through
(vi) under the Exchange Act, and determined that the work of Steven Hall did not raise any conflict of interest in Fiscal Year
2021.
Consideration of Prior Say-on-Pay Vote Results
We held our first non-binding stockholder advisory vote on executive compensation (“say-on-pay”) at our 2020 annual
meeting. Our board, considering the results of the 2020 say-on-pay frequency vote by our stockholders and on the
recommendation of our compensation committee, has opted to hold these say-on-pay votes every two years. Our next advisory
vote on the frequency of future say-on-pay votes will be held at our 2022 annual meeting of stockholders.
At our 2020 annual meeting, our stockholders overwhelmingly approved our executive compensation, with more than
94% of voting shares cast in favor of the say-on-pay resolution. The Committee considers the results of the most recent say-on-
pay vote along with other factors when making executive compensation decisions. The Compensation Committee will continue to
engage with stockholders and will consider feedback from them, as well as the results from the 2020 and future advisory votes on
executive compensation, when evaluating the Company’s executive compensation program and policies.
Fiscal Year 2021 Peer Group
The Compensation Committee examines the executive compensation of a group of peer companies to stay current with
market pay practices and trends, and to understand the competitiveness of our total compensation and its various elements. In
general, we strive for total compensation to be competitive with a group of companies that the Compensation Committee believes
to be an appropriate compensation reference group (the “Peer Group”). The Compensation Committee reviews the Peer Group at
least annually to affirm that it is comprised of companies that are similar to us in terms of industry focus and scope of operations,
size (based on revenues and market capitalization), and the competitive marketplace for talent. While the Compensation
Committee believes the data derived from any peer group is helpful, it also recognizes that benchmarking is not necessarily
definitive in every case.
Most of our direct business competitors are foreign companies that are not required to disclose compensation
information for their executive officers on an individual basis and detailed compensation data is, therefore, limited or unavailable.
The Peer Group is limited to those companies for which executive compensation data is publicly available, which necessarily
eliminates many of the Company’s competitors that are privately held and/or incorporated in jurisdictions that do not require
public disclosure of executive compensation. Thus, while the Compensation Committee uses the Peer Group information for
informational and analytical purposes, it does not target a specific percentile or make compensation decisions based solely on
such information. The Company reviews the Peer Group information in the context of other publicly-available survey data, and
alongside annual assessments of corporate and individual performance to make recommendations and decisions on the
compensation applicable to the Company’s NEOs.
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The Peer Group for 2021 consisted of the following eight publicly-traded oil and gas shipping and transportation
companies:
Diamond S Shipping Inc.
Eagle Bulk Shipping
International Seaways, Inc.
SEACOR Marine LLC
Overseas Shipholding Group, Inc.
Tidewater, Inc.
Genco Shipping & Trading Ltd.
SEACOR Holdings
Elements of the Fiscal Year 2021 Executive Officer Compensation Program
The Compensation Committee reviews each element of compensation annually to ensure alignment with its
compensation philosophy and objectives, as well as to assess its executive compensation program and levels relative to the
competitive marketplace. The executive compensation program consists of the following:
● Base salary;
● Annual bonus;
●
Long-term incentive compensation;
● Retirement benefits generally available to all employees; and
● Welfare and similar benefits (e.g., medical, dental, disability and life insurance).
Base Salary
We use salary to compensate our NEOs for services rendered during the year and to recognize the experience, skills,
knowledge and responsibilities required of each NEO.
The Compensation Committee reviews the base salaries of the NEOs and compares them to the salaries of senior
management among the Peer Group companies. Using this information in conjunction with review of other elements of
compensation, the Compensation Committee aims to determine whether the NEO salaries are at levels sufficient to attract,
motivate and retain these NEOs in leading the Company and driving stockholder value.
Annual adjustments in base salary, if any, consider individual performance, prior experience, position duties and
responsibilities, internal equity and external market practices. The Compensation Committee generally relies on the CEO’s
evaluation of each NEO’s performance (other than his own) in deciding whether to recommend and/or approve merit increases
for any NEOs in a given year. In those instances where the duties and responsibilities of a NEO change, the CEO may
recommend any adjustments believed to be warranted, and the Compensation Committee will consider all of the factors
enumerated above in determining whether to approve any such changes.
For Fiscal Year 2021, the Compensation Committee reviewed the total compensation and salaries of our NEOs for
Fiscal Year 2021, Messrs. J. Hadjipateras, Lycouris, Young, Hansen and A. Hadjipateras, taking into consideration market
conditions, the recommendations of our Chief Executive Officer (for all executives other than himself), and the desire to retain
our experienced, skilled, and knowledgeable NEOs who are essential to leading the Company and driving stockholder value, in
keeping with our compensation philosophy. Following its review and using the factors described above, our Compensation
Committee increased the annual salary levels as follows: for Mr. J. Hadjipateras, a base salary increase from $550,000 to
$650,000; for Mr. J. Lycouris, a base salary increase from $450,000 to $550,000; for Mr. Young, a base salary increase from
$400,000 to $500,000; for Mr. Hansen, a base salary increase from DKK 2,625,000 to DKK 3,250,000; and for Mr. A.
Hadjipateras, a base salary increase from $250,000 to $325,000.
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The following table summarizes Fiscal Year 2021 base salaries for our NEOs.
Name
John C. Hadjipateras
John C. Lycouris
Theodore B. Young
Tim T. Hansen(1)
Alexander C. Hadjipateras
$
$
$
$
$
Fiscal Year 2021 Salary
650,000
550,000
500,000
509,297
325,000
(1)
Converted from Danish Krones to U.S. Dollars at a rate of 1 DKK = 0.1567 USD.
Named Executive Officer Base Salary Increases for Fiscal Year 2022
Base Salary increases for our NEOs for the fiscal year ending March 31, 2022, if any, have not been determined by the
Compensation Committee and are thus not calculable as of the date of this report. The Compensation Committee expects to
determine such increases, if any, no later than September 30, 2021 and the amounts of these increases, if any, will be disclosed in
a filing by the Company in a Current Report on Form 8-K under Item 5.02(f) once the amounts are determined.
Annual Bonus
Our NEOs are eligible for cash incentives based on annual performance. We use these annual incentive opportunities to
reward and drive initiatives as well as short-term achievements and milestones towards meeting the Company’s long-term goals.
For Fiscal Year 2020 and Fiscal Year 2021, our NEOs each received discretionary cash bonuses (including a $1,500 holiday
bonus). Factors reviewed in determining bonus amounts include: safety measures such as time lost to injuries and the number and
frequency or reportable incidents; operating expense per day; chartering performance; EBITDA; and overall evaluation of
individual performance.
The cash bonus amounts in recognition of the NEOs’ contributions to the Company for Fiscal Year 2020 and paid in
Fiscal Year 2021 are detailed in the table below:
Name
John C. Hadjipateras
John C. Lycouris
Theodore B. Young
Tim T. Hansen
Alexander C. Hadjipateras
$
$
$
$
$
Cash Bonus Awarded(1)
1,225,000
300,000
300,000
345,613 (2)
250,000
(1)
(2)
In recognition of the NEOs’ contributions to the Company for Fiscal Year 2020.
Converted from Danish Krones to U.S. Dollars at a rate of 1 DKK = 0.1567 USD.
For Fiscal Year 2021, cash bonuses for the NEOs have not been determined by the Compensation Committee and are
thus not calculable through the date of this report. The Compensation Committee expects to determine such cash bonuses no later
than September 30, 2021, and the amounts of these bonuses, if any, will be disclosed in a filing by the Company in a Current
Report on Form 8-K under Item 5.02(f) once the amounts are determined.
Equity-Based Compensation
Our equity-based compensation program is intended to align the interests of our executives with those of our
stockholders, and to help reduce the possibility of making excessively risky decisions that could maximize short term profits at
the expense of long term value, thereby establishing a direct relationship between executive compensation, long-term operating
performance, and sustained increases in stockholder value.
To determine the size of annual equity grants, as described above, our Compensation Committee generally considers the
executives’ prior performance, their role and responsibility, and their ability to influence the Company’s
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long-term growth and business performance, including the recommendations of our Chief Executive Officer (except with respect
to his own equity award). Our Compensation Committee also considers Peer Group information, as applicable.
The Compensation Committee believes restricted stock serves as a retention and motivation tool for executives in the
volatile shipping industry. On May 14, 2020, the Compensation Committee approved the following long-term equity awards for
our NEOs in the form of time-based restricted stock in recognition of the officers' contributions to the Company for Fiscal Year
2020: Mr. J. Hadjipateras received 155,654 fully vested restricted shares on June 22, 2020, Messrs. Lycouris, Young, and A.
Hadjipateras received 37,500, 35,000, and 30,000 shares of restricted stock on June 15, 2020, vesting in escalating installments
on the grant date and the first, second and third anniversary of the grant date, and Mr. Hansen received 40,000 restricted stock
units vesting in escalating installments on the first, second and third anniversary of the grant date.
Name
Grant Date
Number of shares or units of stock
granted(1)
Grant date fair value of shares or units
of stock(2)
Restricted Stock Awards and Restricted Stock Units
John C. Hadjipateras
John C. Lycouris
Theodore B. Young
Tim T. Hansen
Alexander C. Hadjipateras
6/22/2020
6/15/2020
6/15/2020
6/15/2020
6/15/2020
155,654
37,500
35,000
40,000
30,000
$
$
$
$
$
1,224,997
307,875
287,350
328,400
246,300
(1)
(2)
In recognition of the NEOs’ contributions to the Company for Fiscal Year 2020.
The market price of the Company’s stock on the grant dates of June 15, 2020 and June 22, 2020 was $8.21 and $7.87, respectively.
All restricted shares and restricted stock units of a NEO will vest (i) if such named executive officer’s employment
terminates other than for Cause (as defined in the Severance and CIC Plan (defined below)—see “2014 Executive Severance and
Change in Control Severance Plan” below) or on account of death or Disability or (ii) upon a Change of Control (as defined in
the Equity Incentive Plan (defined below) and related restricted stock award agreements) that occurs while such NEO is still
employed with us.
For Fiscal Year 2021, long-term equity awards for the NEOs have not been determined through the date of this report.
The Compensation Committee expects to determine such awards no later than September 30, 2021, and the amounts of these
awards, if any, will be disclosed in a filing by the Company in a Current Report on Form 8-K under Item 5.02(f) once the
amounts are determined.
Employment Agreements with the NEOs
None of our NEOs, with the exception of Mr. Hansen, are subject to an employment agreement with us or our
subsidiaries.
Mr. Hansen has an employment agreement that entitles him to receive certain benefits and payments if his employment
terminates in specified separation scenarios. These arrangements are described under the Potential Payments upon Termination
and Change in Control section.
Executive Severance and Change in Control Severance Plan
The 2014 Executive Severance and Change in Control Severance Plan (the "Severance and CIC Plan") provides for
payments and other benefits in certain circumstances involving a termination of employment, including a termination of
employment in connection with a change-in-control. Cash payments in connection with a change-in-control are subject to a
double trigger; that is, the executive is not entitled to payment unless there is both a change-in-control and the executive is
subsequently terminated without cause (or resigns for good reason) within a two-year period following the change-in-control. Our
executives are not entitled to any severance payments as a result of voluntary termination (outside of the retirement context) or if
they are terminated for cause. Detailed information with respect to these payments and benefits can be found under the Potential
Payments upon Termination and Change in Control section. Mr. J. Hadjipateras, Mr. Lycouris, Mr. Young, and Mr. A.
Hadjipateras are participants to the Severance and CIC Plan.
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Pursuant to the 2014 Equity Incentive Plan, in the event of a change-in-control all outstanding equity awards become
fully vested and any forfeiture provisions shall lapse.
The Committee believes that these severance benefits encourage the commitment of our NEOs and ensure that they will
be able to devote their full attention and energy to our affairs in the face of potentially disruptive and distracting circumstances.
Additional Information
Retirement Benefits
We provide retirement plan benefits, discussed in this section below, that we believe are customary in our industry. We
provide them to remain competitive in retaining talent and attracting new talent to join us.
401(k) Savings Plan
We provide all qualifying full-time employees with the opportunity to participate in our tax-qualified 401(k) savings
plan. The plan allows employees to defer receipt of earned salary, up to tax law limits, on a tax-advantaged basis. Accounts may
be invested in a wide range of mutual funds. Up to tax law limits, we provide a 3% of salary safe harbor contribution for U.S.
employees.
Nonqualified Deferred Compensation
We contribute to retirement accounts for certain Denmark-based employees, including Mr. Hansen based on a
percentage of their annual salaries.
Tax Consideration
As part of its role, the Compensation Committee reviews and considers the expected tax treatment to the Company and
its executive officers as one of the factors in determining compensation matters. For Fiscal Year 2021 our gross U.S. source
income was exempt from tax under Code section 883 and thus deductions for executive compensation are not relevant to the
Company’s U.S. federal income tax positions. If the Company is not exempt from U.S. federal income taxation by reason of
Code section 883 and is subject to U.S. federal income taxation on a net income basis, the deduction of certain items of
compensation paid to certain of our executives or former executives may be limited. The Compensation Committee has taken,
and intends to continue to take, actions, as appropriate, to attempt to minimize, if not eliminate, the Company’s non-deductible
compensation expense within the context of maintaining the flexibility that the Compensation Committee believes to be an
important element of the Company’s executive compensation program.
Risk Assessment
The Compensation Committee believes that the Company’s compensation objectives and policies do not create risks
that are reasonably likely to have a material adverse effect on the Company. Determinations regarding incentive compensation
are based on a discretionary assessment of a variety of factors related to the performance of the Company and the contributions of
each executive officer to that performance. Incentive compensation awards are not tied to formulas based on short-term
performance, and no one factor disproportionately affects incentive amounts, which diversifies the risk associated with any single
indicator of performance. A significant portion of each executive’s total compensation is delivered in the form of equity that vests
over multiple years, thereby aligning the interests of our executive officers with those of our shareholders. Compensation is
determined by our Compensation Committee, which is comprised solely of independent members of our Board of Directors
under NYSE listing standards.
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Report of the Compensation Committee
The Compensation Committee, comprised entirely of independent directors (as defined under U.S. securities laws,
NYSE listing standards and applicable guidelines under the Code), has reviewed the CD&A included in this annual report and
discussed that CD&A with management. Based on its review and discussion with management, the Compensation Committee
approved the CD&A and recommended to the Dorian Board of Directors that the CD&A be included in this annual report.
Compensation Committee:
Thomas J. Coleman
Ted Kalborg
Malcolm McAvity
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Summary Compensation Table
The table below sets forth the compensation earned by our NEOs during the years indicated.
Name and Principal Position
John Hadjipateras(4)
Chief Executive Officer
John Lycouris(5)
Chief Executive Officer, Dorian LPG (USA) LLC
Theodore B. Young
Chief Financial Officer
Tim T. Hansen(6)
Chief Commercial Officer
Alexander C. Hadjipateras
Executive Vice President of Business Development
Fiscal Year
Ended
March 31,
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
Salary
Bonus(1)
$ 650,000 $ 1,226,500
301,500
$ 550,000 $
301,500
$ 550,000 $
$ 550,000 $
$ 450,000 $
$ 450,000 $
301,500
201,500
201,500
$ 500,000 $
$ 400,000 $
$ 400,000 $
301,500
301,500
201,500
$ 509,297 $
$ 390,552 $
$ 390,309 $
347,024
174,228
176,538
$ 325,000 $
$ 250,000 $
$ 250,000 $
251,500
146,500
146,500
Stock
Awards(2)
$ 1,224,997
531,187
$
540,892
$
All Other
Compensation(3)
9,300
$
8,400
$
8,250
$
Total
$ 3,110,797
$ 1,391,087
$ 1,400,642
$
$
$
$
$
$
$
$
$
$
$
$
307,875
164,200
167,200
287,350
164,200
167,200
328,400
147,780
150,480
246,300
123,150
125,400
$
$
$
$
$
$
$
$
$
$
$
$
9,300
8,400
8,250
$ 1,168,675
824,100
$
826,950
$
9,300
8,400
8,250
$ 1,098,150
874,100
$
776,950
$
50,930
39,055
39,031
$ 1,235,650
751,615
$
756,358
$
9,300
8,400
8,250
$
$
$
832,100
528,050
530,150
(1)
(2)
(3)
(4)
(5)
(6)
Represents cash bonuses paid to each of the NEOs for the applicable fiscal year and earned in the immediately preceding fiscal year.
The amount of cash bonuses earned in respect of the fiscal year ended March 31, 2021 has not yet been determined. The
Compensation Committee expects to determine such cash bonuses no later than September 30, 2021, and the amounts of these cash
bonuses, if any, will be disclosed in a filing by the Company in a Current Report on Form 8-K under Item 5.02(f) once the amounts
are determined.
The amounts set forth next to each award represent the aggregate grant date fair value of awards computed in accordance with FASB
ASC Topic 718. The assumptions used in calculating the grant date fair value reported in these columns are set forth in Note 12 to our
consolidated financial statements included herein.
The amounts set forth represent contributions by the Company to each of the named executive officer’s 401(k) defined contribution
plan for U.S. employees or retirement account for non-U.S. employees.
As our Chief Executive Officer, Mr. Hadjipateras does not receive any additional compensation for his services as a director.
As the Chief Executive Officer of our subsidiary, Dorian LPG (USA) LLC, Mr. Lycouris does not receive any additional
compensation for his services as a director.
Mr. Hansen’s salary is calculated using the average applicable exchange rates during each fiscal year for the local currency of
employment.
Narrative Disclosure to the Summary Compensation Table
Dorian (Hellas) S.A. (“DHSA”) formerly provided technical, crew, commercial management, insurance and accounting
services to our vessels and had agreements to outsource certain of these services to Eagle Ocean Transport Inc. (“Eagle Ocean
Transport”), which is 100% owned by Mr. John C. Hadjipateras, our Chairman, President and Chief Executive Officer.
Dorian LPG (USA) LLC and its subsidiaries entered into an agreement with DHSA, retroactive to July 2014 and
superseding an agreement between Dorian LPG (UK) Ltd. and DHSA, for the provision by Dorian LPG (USA) LLC and its
subsidiaries of certain chartering and marine operation services to DHSA, for which income was earned and included in “Other
income-related parties” totaling $0.1 million, $0.1 million and $0.2 million for the years ended March 31, 2021, 2020 and 2019,
respectively. As of March 31, 2021, $1.0 million was due from DHSA and included in “Due from related parties.”
Eagle Ocean Transport incurs miscellaneous costs on behalf of us, for which we reimbursed Eagle Ocean Transport less
than $0.1 million for each of the years ended March 31, 2021, 2020 and 2019. Such expenses are reimbursed based on their
actual cost.
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None of our members of senior management, including Mr. Hadjipateras, Mr. Lycouris and Mr. Young, are subject to
an employment agreement with us or our subsidiaries.
Equity Compensation
On June 30, 2014, Mr. J. Hadjipateras, Mr. Lycouris, Mr. Young, and Mr. A. Hadjipateras received 350,000, 185,000,
90,000, and 30,000 shares of restricted stock, respectively, vesting in equal installments on the third, fourth and fifth anniversary
of the grant date. On June 15, 2016, Mr. J. Hadjipateras, Mr. Lycouris, Mr. Young, Mr. Hansen and Mr. A. Hadjipateras received
75,000, 30,000, 27,500, 24,000 and 17,500 shares of restricted stock, respectively, vesting in equal installments on the grant date
and the first, second and third anniversary of the grant date. On June 15, 2017, Mr. J. Hadjipateras, Mr. Lycouris, Mr. Young, Mr.
Hansen and Mr. A. Hadjipateras received 75,000, 30,000, 27,500, 24,000, and 17,500 shares of restricted stock, respectively,
vesting in equal installments on the grant date and the first, second and third anniversary of the grant date. On June 15, 2018, Mr.
J. Hadjipateras, Mr. Lycouris, Mr. Young, Mr. Hansen and Mr. A. Hadjipateras received 64,700, 20,000, 20,000, 18,000 and
15,000 shares of restricted stock, respectively, vesting in equal installments on the grant date and the first, second and third
anniversary of the grant date. On August 5, 2019, Mr. J. Hadjipateras, Mr. Lycouris, Mr. Young, and Mr. A. Hadjipateras
received 64,700, 20,000, 20,000, and 15,000 shares of restricted stock, respectively, vesting in equal installments on the grant
date and the first, second and third anniversary of the grant date, and Mr. Hansen received 18,000 restricted stock units vesting in
equal installments on the first, second and third anniversary of the grant date. On June 15, 2020, Mr. Lycouris, Mr. Young, and
Mr. A. Hadjipateras received 37,500, 35,000 and 30,000 shares of restricted stock, respectively, vesting in escalating installments
on the grant date and the first, second and third anniversary of the grant date, and Mr. Hansen received 40,000 restricted stock
units vesting in escalating installments on the first, second and third anniversary of the grant date. On June 22, 2020, Mr. J.
Hadjipateras received 155,654 shares of restricted stock vesting on the grant date.
All restricted shares and restricted stock units of a named executive officer will vest (i) if such named executive
officer’s employment terminates other than for Cause (as defined in the Severance and CIC Plan (defined below)—see “2014
Executive Severance and Change in Control Severance Plan” below) or on account of death or Disability or (ii) upon a Change of
Control (as defined in the Equity Incentive Plan (defined below) and related restricted stock award agreements) that occurs while
such named executive officer is still employed with us.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth certain information concerning outstanding equity awards as of March 31, 2021, for each
NEO:
Name
Grant Date
Number of shares or units of stock that
have not vested
Market value of shares or units of stock
that have not vested(1)
Restricted Stock Awards and Restricted Stock Units
John C. Hadjipateras
John C. Lycouris
Theodore B. Young
Tim T. Hansen
Alexander C. Hadjipateras
8/5/2019
6/15/2018
6/15/2020
8/5/2019
6/15/2018
6/15/2020
8/5/2019
6/15/2018
6/15/2020
8/5/2019
6/15/2018
6/15/2020
8/5/2019
6/15/2018
32,350(3)
16,175(4)
30,000(2)
10,000(3)
5,000(4)
30,000(2)
10,000(3)
5,000(4)
40,000(2)
12,000(3)
4,500(4)
25,000(2)
7,500(3)
3,750(4)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
424,756
212,378
393,900
131,300
65,650
393,900
131,300
65,650
525,200
157,560
59,085
328,250
98,475
49,238
(1)
Fair market value of our common stock on March 31, 2021. The amount listed in this column represents the product of the closing
market price of the Company’s stock as of March 31, 2021 ($13.13) multiplied by the number of shares or units of stock subject to the
award.
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(2)
(3)
(4)
Granted on June 15, 2020 and vested or vests with escalating terms on each of the grant date and first, second and third anniversaries
of the date of grant.
Granted on August 5, 2019 and vested or vests ratably on each of the grant date and first, second and third anniversaries of the date of
grant.
Granted on June 15, 2018 and vested or vests ratably on each of the grant date and first, second and third anniversaries of the date of
grant.
Options Exercised and Stock Vested
The following table provides information for the year ended March 31, 2021 concerning the vesting of restricted stock
awards by the NEOs. There were no stock options exercised by the NEOs for the year ended March 31, 2021 and no options have
been granted by the Company since its inception.
Option Awards
Restricted Stock Awards and Restricted Stock Units
Name
John C. Hadjipateras(1)
John C. Lycouris(2)
Theodore B. Young(3)
Tim T. Hansen(4)
Alexander C. Hadjipateras(5)
Number of shares
acquired on exercise
-
-
-
-
-
Value realized on
exercise
Number of shares
acquired on vesting
Value realized on vesting
-
-
-
-
-
206,754
25,000
21,875
16,500
16,875
$
$
$
$
$
1,656,983
209,100
183,444
140,085
141,431
(1)
(2)
(3)
(4)
(5)
Mr. J, Hadjipateras had 34,925 shares of restricted stock vested on June 15, 2020 at a market price of $8.21, 16,175 shares of
restricted stock vested on August 5, 2020 at a market price of $8.98, and 155,654 shares of restricted stock vested on June 22, 2020 at
a market price of $7.87.
Mr. Lycouris had 20,000 shares of restricted stock vested on June 15, 2020 at a market price of $8.21 and 5,000 shares of restricted
stock vested on August 5, 2020 at a market price of $8.98.
Mr. Young had 16,875 shares of restricted stock vested on June 15, 2020 at a market price of $8.21 and 5,000 shares of restricted
stock vested on August 5, 2020 at a market price of $8.98.
Mr. Hansen had 10,500 shares of restricted stock vested on June 15, 2020 at a market price of $8.21 and 6,000 restricted stock units
vested on August 5, 2020 at a market price of $8.98.
Mr. A, Hadjipateras had 13,125 shares of restricted stock vested on June 15, 2020 at a market price of $8.21 and 3,750 shares of
restricted stock vested on August 5, 2020 at a market price of $8.98.
Director Compensation
We pay each non-executive director annual compensation of $100,000 (50% in cash and 50% as an equity award in a
form determined by our Compensation Committee), paid quarterly in arrears. The chairman of the Compensation Committee, the
Audit Committee and the Nominating and Corporate Governance Committee each receive additional annual cash compensation
of $15,000. Further, any director serving on a committee of the Board, other than a chairman of a committee, receives additional
annual cash compensation of $10,000 per committee. Beginning October 1, 2020, the payments were made 100% as equity
awards. Beginning April 1, 2021, the payments will be made annually in arrears.
Each director is also reimbursed for out-of-pocket expenses in connection with attending meetings of the board of
directors or committees. Each director will be fully indemnified by us for actions associated with being a director to the extent
permitted under Marshall Islands law. Further, none of the members of our board of directors will receive any benefits upon
termination of their directorship positions. Our directors are eligible to receive awards under an equity incentive plan that we
adopted prior to the completion of our initial public offering and which is described below under “2014 Equity Incentive Plan.”
Our Compensation Committee reviews director compensation annually and makes recommendations to the Board with respect to
compensation and benefits provided to the members of the Board. Our Corporate Governance Guidelines provide that director
compensation should be fair and equitable to enable the Company to attract qualified members to serve on its Board.
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The following table provides certain information concerning the compensation earned by each of our non-employee
directors serving on our Board for the year ended March 31, 2021, for services rendered in all capacities:
Name
Thomas J. Coleman
Ted Kalborg
Øivind Lorentzen
Malcolm McAvity
Christina Tan
____________________
Fees earned or paid in
cash (1)
Restricted Stock Awards and
Restricted Stock Units(2)
Total
$
$
$
$
$
37,500
35,000
32,500
37,500
35,000
$
$
$
$
$
92,959
90,188
87,430
92,959
90,188
$
$
$
$
$
130,459
125,188
119,930
130,459
125,188
(1)
(2)
Represents cash compensation earned for services rendered as a director for the fiscal year ended March 31, 2021.
Represents equity compensation for services rendered as a director for the fiscal year ended March 31, 2021. The value of each stock
award equals the grant date fair values of $7.74, $8.01, $12.19, and $13.13 per share on June 30, 2020, September 30, 2020,
December 31, 2020 and March 31, 2021, respectively.
2014 Equity Incentive Plan
Our 2014 equity incentive plan (the “2014 Equity Incentive Plan”), which was unanimously adopted by our Board of
Directors in April 2014, was approved by a shareholder vote at the 2015 annual meeting of shareholders. Pursuant to the terms of
the 2014 Equity Incentive Plan, we expect that directors, officers, and employees (including any prospective officer or employee)
of the Company and its subsidiaries and affiliates, and consultants and service providers to (including persons who are employed
by or provide services to any entity that is itself a consultant or service provider to) the Company and its subsidiaries and
affiliates, as well as entities wholly-owned or generally exclusively controlled by such persons, may be eligible to receive stock
appreciation rights, stock awards, restricted stock units and performance compensation awards that the plan administrator
determines are consistent with the purposes of the plan and the interests of the Company. The maximum number of shares of
common stock that may be granted under the 2014 Equity Incentive Plan shall not exceed 2,850,000 in the aggregate. In June
2014, we granted 655,000 shares of restricted stock to certain of our officers. In March 2015, we granted 274,000 shares of
restricted stock to certain of our directors, employees and non-employee consultants, of which 8,506 shares were subsequently
forfeited by a former employee and are again available for issuance. In June 2016, we issued 250,000 shares of restricted stock to
certain of our executive officers and employees, of which 3,054 shares were subsequently forfeited by three former employees
and are again available for issuance. In June 2016, we granted 6,950 shares of stock to certain of our directors. In September
2016, we granted 10,130 shares of stock to certain of our directors. In December 2016, we granted 10,434 shares of stock to
certain of our directors and non-employee consultants. In March 2017, we granted 7,194 shares of stock to certain of our directors
and non-employee consultants. In June 2017, we issued 259,800 shares of restricted stock to certain of our executive officers and
employees, of which 3,018 shares were subsequently forfeited by a former employee and are again available for issuance. In June
2017, we granted 8,664 shares of stock to certain of our directors and non-employee consultants. In September 2017, we granted
10,062 shares of stock to certain of our directors. In December 2017, we granted 9,714 shares of stock to certain of our directors
and non-employee consultants. In March 2018, we granted 9,720 shares of stock to certain of our directors and non-employee
consultants. In June 2018, we issued 200,000 shares of restricted stock to certain of our executive officers and employees, of
which 50,000 restricted shares vested on the grant date and of which 150 shares were subsequently forfeited and are again
available for issuance. In June 2018, we granted 9,552 shares of stock to certain of our directors and non-employee consultants.
In September 2018, we granted 9,582 shares of stock to certain of our directors and non-employee consultants. In December
2018, we granted 10,416 shares of stock to certain of our directors and non-employee consultants. In March 2019, we granted
12,804 shares of stock to certain of our directors and non-employee consultants. In June 2019, we granted 7,750 shares of stock
to certain of our directors. In July 2019, we granted 1,550 shares of stock to a non-employee consultant. In August 2019, we
granted 22,500 restricted stock units and issued 175,200 shares of restricted stock to certain of our executive officers and
employees, of which 43,802 restricted shares vested on the grant date. In September 2019, we granted 6,470 shares of stock to
certain of our directors. In December 2019, we granted 4,745 shares of stock to certain of our directors. In March 2020, we
granted 5,060 shares of stock to certain of our directors. In June 2020, we granted 56,450 restricted stock units and issued
188,400 shares of restricted stock to certain of our executive officers and employees, of which 38,975 restricted shares vested on
the grant date. In June 2020, we granted 155,654 shares of restricted stock to our executive officer that all vested immediately. In
June 2020, we granted 7,575 shares of stock to certain of our directors. In September 2020, we granted 7,600 shares of stock to
certain of our directors. In December 2020, we granted 15,105 shares of stock to certain of our directors. In March 2021, we
granted 11,431 shares
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of stock to certain of our directors. As of June 1, 2021, there were 358,171 shares of restricted stock and restricted stock units that
were issued and outstanding, but not yet vested. As of that date, there were 445,216 shares of common stock remaining available
for future grants under the 2014 Equity Incentive Plan.
Upon a “Change in Control” (as defined in the 2014 Equity Inventive Plan) of the Company, all unvested restricted stock
awards granted under the 2014 Equity Inventive Plan and related restricted stock award agreements will become fully vested.
Retirement Benefits
We provide retirement plan benefits, discussed in this section below, that we believe are customary in our industry. We
provide them to remain competitive in retaining talent and attracting new talent to join us.
401(k) Savings Plan
We provide all qualifying full-time employees with the opportunity to participate in our tax-qualified 401(k) savings
plan. The plan allows employees to defer receipt of earned salary, up to tax law limits, on a tax-advantaged basis. Accounts may
be invested in a wide range of mutual funds. Up to tax law limits, we provide a 3% of salary safe harbor contribution for U.S.
employees.
Pension Benefits
Our Greece-based employees have a statutory required defined benefit pension plan according to provisions of Greek
law 4093/2012 covering all eligible employees.
Nonqualified Deferred Compensation
We contribute to retirement accounts for certain United Kingdom and Denmark-based employees based on a percentage
of their annual salaries.
2014 Executive Severance and Change in Control Severance Plan
Except as set forth under “2014 Equity Incentive Plan” above and as provided under our Executive Severance and
Change in Control Severance Plan (the “Severance and CIC Plan”), none of our members of senior management, including Mr.
Hadjipateras, Mr. Lycouris and Mr. Young, will receive any benefits as a result of change in control.
We adopted our Severance and CIC Plan in June 2014, under which we expect that certain executive officers of the
Company and our subsidiaries and affiliates, may be eligible to receive severance benefits in connection with termination by the
Company without Cause (as defined below) or termination by such officer for Good Reason (as defined below). Mr.
Hadjipateras, Mr. Lycouris and Mr. Young are participants to the Severance and CIC Plan. A dismissed officer may be eligible
for additional severance benefits when dismissed during the period within two years following a change in control of the
Company, or in certain cases, during the six-month period prior to a “Change in Control” (as generally defined under the Equity
Incentive Plan with the addition of any transaction the board determines to be a Change in Control).
In the event of termination without Cause or for Good Reason, officers subject to the Severance and CIC Plan will be
eligible to receive a lump-sum payment equal to two times the sum of such officer’s base salary plus bonus, a pro rata annual
bonus for the year of termination, a cash payment equal to 18 months of COBRA continuation coverage and one year’s
outplacement services (not to exceed $10,000). Should such termination take place within two years following a Change in
Control of the Company, or in certain cases, during the six-month period prior to a Change in Control (the “CIC Termination
Period”), all outstanding equity awards of a terminated officer subject to the Severance and CIC Plan shall vest and the lump-sum
payment to the officer will be increased to 2.99 times the sum of the officer’s base salary plus bonus. The participant will receive
payments and pay the excise tax, or the payments will be reduced so that no excise tax applies, whatever puts the participant in a
better after-tax position. For purposes of the Severance and CIC Plan, “Cause” is generally defined to mean: (i) the willful and
continued failure to substantially perform his or her duties, (ii) the willful
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engaging in illegal conduct or gross misconduct which is demonstrably and materially injurious to the Company or its affiliates,
(iii) engaging in conduct or misconduct that materially harms the reputation or financial position of the Company, (iv) the
participant (x) obstructs or impedes, (y) endeavors to influence, obstruct or impede or (z) fails to materially cooperate with, an
investigation, (v) the participant withholds, removes, conceals, destroys, alters or by other means falsifies any material which is
requested in connection with an investigation, (vi) conviction of, or the entering of a plea of nolo contendere to, a felony or (vii)
being found liable in any SEC or other civil or criminal securities law action. For purposes of the Severance and CIC Plan, “Good
Reason” generally means (A) with respect to the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer, a
material diminution in the nature and scope of the participant’s duties, responsibilities or status, (B) a material diminution in
current annual base salary or annual performance bonus target opportunities; or (C) an involuntary relocation to a location more
than 25 miles from a participant’s principal place of business, provided that, during the CIC Termination Period, “Good Reason”
shall mean (A) (1) any material change in the duties, responsibilities or status (including reporting responsibilities); provided,
however, that good reason shall not be deemed to occur upon a change in duties, responsibilities (other than reporting
responsibilities) or status that is solely and directly a result of the Company no longer being a publicly traded entity or (2) a
material and adverse change in titles or offices (including, if applicable, membership on the board); (B) a more than 10%
reduction in the participant’s rate of annual base salary or annual performance bonus or equity incentive compensation target
opportunities (including any material and adverse change in the formula for such targets) as in effect immediately prior to such
change in control; (C) the failure to continue in effect any employee benefit plan, compensation plan, welfare benefit plan or
fringe benefit plan in which the participant is participating immediately prior to such change in control or the taking of any action
by the Company, in each case which would materially adversely affect the participant, unless the participant is permitted to
participate in other plans providing the participant with materially equivalent benefits in the aggregate; (D) the failure of the
Company to obtain the assumption of the Company’s obligations under the plan from any successor; (E) an involuntary
relocation of the principal place of business to a location more than 25 miles from the principal place of business immediately
prior to such change in control; or (F) a material breach by the Company of the terms of an employment agreement. Although
none of our members of senior management, including Mr. Hadjipateras, Mr. Lycouris and Mr. Young, are subject to an
employment agreement with us or our subsidiaries, we cannot guarantee that such members will not enter into such agreements in
the future.
Prohibition on Hedging
While the Company does not currently have a policy prohibiting its employees, including executive officers, and
directors from engaging in hedging transactions (derivatives, equity swaps, forwards, etc.) involving Company securities, the
Company does have an insider trading policy that requires, among other things, that all trading in Company shares by “insiders”
(as defined below) must be pre-cleared with the Company’s Chief Financial Officer, the Company's Chief Executive Officer or
the Chief Executive Officer of Dorian LPG (USA) LLC (each, an “Authorized Person“) prior to commencing any trade. The
relevant Authorized Person will consult as necessary with senior management and/or outside legal counsel to the Company
before clearing any proposed trade. The Company’s insider trading policy covers all of the Company’s officers, directors and
employees (“insiders”), as well as any transactions in any securities participated in by family members, trusts or corporations
directly or indirectly controlled by insiders. In addition, the Company’s insider trading policy applies to transactions engaged in
by corporations in which the insider is an officer, director or 10% or greater stockholder and a partnership of which the insider is
a partner, unless the insider has no direct or indirect control over the partnership.
President and Chief Executive Officer Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform Act and Item 402(u) of Regulation S-K, we are
providing the following information about the relationship of the annual total compensation of our median employee and the
annual total compensation of John Hadjipateras, our President and Chief Executive Officer ("CEO"):
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and
employment records and other data as described below. The SEC rules for identifying the median compensated employee and
calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of
methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation
practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported
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above, as other companies may have different employment and compensation practices and may utilize different methodologies,
exclusions, estimates and assumptions in calculating their own pay ratios.
The compensation of the Company’s median employee (“Median Employee”) was determined by reviewing the amount
of compensation paid to each of the Company’s employees using the data as shown in its payroll records including base salary,
bonuses (including equity awards), and other benefits paid by or on behalf of the Company using the same calculation methods
and assumptions, disclosed in the Summary Compensation Table. The total reported compensation for Mr. John Hadjipateras in
Fiscal Year 2021 was $3,110,797, as reflected in the Summary Compensation Table included in this Annual Report on Form 10-
K, and was approximately 22.3 times the Median Employee’s annual total compensation of $139,385. The methodology used to
identify the Median Employee uses the same pay components, as well as the same calculation methods and assumptions,
disclosed in the Summary Compensation Table. Given the different methodologies that various public companies will use to
determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between
companies. The methodology used to identify the Median Employee excludes consideration of the seafarers who had served on
the Company’s commercially-managed vessels for one or more days during the year ended March 31, 2021, since such seafarers
were employed, and their compensation was determined, by unaffiliated third parties and these seafarers provide services to the
Company or its consolidated subsidiaries as independent contractors or “leased” workers. These seafarers are sourced from
seafarer recruitment and placement service agencies and are employed with short-term employment contracts.
Compensation Committee Interlocks and Insider Participation
During our last fiscal year, Messrs. Coleman, Kalborg and McAvity served on the Compensation Committee. Each of
them is not, nor have any of them ever been, an officer or employee of the Company or any of its subsidiaries. In addition, during
the last fiscal year, no executive officer of the Company served as a member of the board of directors or the compensation
committee of any other entity that has one or more executive officers serving on our Board or our Compensation Committee.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information known to the Company regarding the beneficial ownership of its
common stock as of June 1, 2021 unless otherwise indicated below by (i) each person, group or entity known by the Company to
be the beneficial owner of more than 5% of the outstanding shares of its common stock, (ii) each of our directors and director
nominees, (iii) each of our NEOs and (iv) all of our executive officers and directors as a group. Unless otherwise stated, the
address of each named executive officer and director is c/o Dorian LPG Ltd., c/o Dorian LPG (USA) LLC, 27 Signal Road,
Stamford, Connecticut 06902.
Name and Address of Beneficial Owner
Common Shares Beneficially Owned(1)
Percent of Class Beneficially Owned(2)
5% Shareholders
Wellington Management Group LLP(3)
Blackrock, Inc.(4)
Kensico Capital Management Corp.(5)
Dimensional Fund Advisors LP(6)
Directors and Executive Officers
John C. Hadjipateras(7)
Thomas J. Coleman(8)
John C. Lycouris(9)
Theodore B. Young(10)
Christina Tan
Tim Hansen(11)
Alexander C. Hadjipateras
Øivind Lorentzen
Ted Kalborg
Malcolm McAvity
All directors and executive officers as a
group (10 persons)(12)
____________________
6,333,372
5,603,957
4,112,240
4,071,402
4,767,623
4,145,336
420,122
136,335
84,084
76,866
67,249
51,804
48,249
33,096
9,617,681
15.4 %
13.6 %
10.0 %
9.9 %
11.6 %
10.1 %
1.0 %
*
*
*
*
*
*
*
23.4 %
*
(1)
(2)
(3)
The percentage of shares beneficially owned by such director or executive officer does not exceed one percent of the outstanding shares of
common stock.
Each share of common stock is entitled to one vote on matters on which common shareholders are eligible to vote. Beneficial ownership
described in the table above has been obtained by the Company only from public filings and information provided to the Company by the
listed shareholders for inclusion herein. Beneficial ownership is required to be determined by the shareholder in accordance with the rules
under the Exchange Act and consists of either or both voting or investment power with respect to securities. Except as otherwise indicated by
footnote, and subject to community property laws where applicable, the persons named in the table have reported that they have sole voting
and sole investment power with respect to all shares of common stock shown as beneficially owned by them.
Percentages based on a total of 41,086,069 shares of common stock outstanding and entitled to vote at the Annual Meeting as of June 1,
2021.
According to a filing made with the Commission on February 12, 2018, Wellington Management Group LLP (“Wellington Management
Group”) possesses shared voting power over 4,488,439 shares and shared dispositive power over 6,333,772 shares. According to the filing
made with the Commission on February 12, 2018, all shares are owned of record by clients of one or more investment advisers directly or
indirectly owned by Wellington Management Group. Those clients have the right to receive, or the power to direct the receipt of, dividends
from, or the proceeds from the sale of, such securities. No such client is known to have such right or power with respect to more than 5% of
this class of shares. According to the filing made with the Commission on February 12, 2018, the principal business address of Wellington
Management Group is c/o Wellington Management Company LLP, 280 Congress Street, Boston, Massachusetts 02210. Wellington
Management Group may have made additional transactions in our common shares since its most recent filing with the Commission.
Accordingly, the information presented may not reflect all of the shares currently beneficially owned by Wellington Management Group.
(4)
According to the filing made with the Commission on January 27, 2021, Blackrock Inc. possesses sole voting power over 5,546,043 and sole
dispositive power over 5,603,957 common shares. Blackrock may have made additional transactions in our common shares since its most
recent filing with the Commission. Accordingly, the information presented may not reflect all of the shares currently beneficially owned by
Blackrock.
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(5)
(6)
According to a filing made with the Commission March 31, 2021, Kensico possesses shared voting and dispositive power over 4,112,240
shares. According to a filing made with the Commission on March 31, 2021, the principal business address of Kensico is 55 Railroad
Avenue, 2nd Floor, Greenwich CT, 06830. Kensico provides investment management services to certain affiliated funds, including Kensico
Associates, L.P. and Kensico Offshore Fund Master, Ltd. (collectively, the “Investment Funds”). As Kensico’s co-presidents, Mr. Coleman
and Michael B. Lowenstein may be deemed to be controlling persons of Kensico. By virtue of these relationships, Messrs. Coleman and
Lowenstein may be deemed to beneficially own the entire number of Dorian shares held by the Investment Funds; however, each disclaims
beneficial ownership of any Dorian shares, and proceeds thereof, except to the extent of his pecuniary interest therein. Kensico may have
made additional transactions in our common stock since its most recent filings with the Commission. Accordingly, the information presented
may not reflect all of the shares currently beneficially owned by Kensico.
According to the filing made with the Commission on February 12, 2021, Dimensional Fund Advisors LP possesses sole voting power over
3,920,526 shares and sole dispositive power over 4,071,402 shares. According to the filing made with the Commission on February 12, 2021,
Dimensional Fund Advisors LP furnishes investment advice to four investment companies registered under the Investment Company Act of
1940, and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such
investment companies, trusts and accounts, collectively referred to as the “Funds”). In certain cases, subsidiaries of Dimensional Fund
Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-adviser and/or manager,
Dimensional Fund Advisors LP or its subsidiaries (collectively, “Dimensional”) may possess voting and/or investment power over the
securities that are owned by the Funds, and may be deemed to be the beneficial owner of the securities held by the Funds. However, all
shares are owned by the Funds. The Funds have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds
from the sale of, such securities. To the knowledge of Dimensional, the interest of any one such Fund does not exceed 5% of the class of
securities. According to the filing made with the Commission on February 12, 2021, the principal business address of Dimensional is
Building One, 6300 Bee Cave Road, Austin, Texas 78746. Dimensional may have made additional transactions in our common shares since
its most recent filing with the Commission. Accordingly, the information presented may not reflect all of the shares currently beneficially
owned by Dimensional.
(7) Mr. Hadjipateras possesses sole voting power over 1,880,986 shares, shared voting power over 2,886,637 shares, sole dispositive power over
1,880,986 shares and shared dispositive power over 178,080 shares. Specifically, Mr. Hadjipateras may be deemed to beneficially own (i)
1,880,986 shares over which he has sole voting and dispositive power; (ii) 26,166 shares by virtue of pledges of such shares given under
funding and security agreements with each of Theodore B. Young and Alexander J. Ciaputa, pursuant to which Mr. Hadjipateras may be
deemed to share the power to vote and dispose of such shares; (iii) 125,000 shares through Mr. Hadjipateras’ spouse, 6,250 shares through
Mr. Hadjipateras’ children, and 20,664 through the LMG Trust (Mr. Hadjipateras and his wife are trustees of the LMG Trust and the
beneficiary of the LMG Trust is one of their children), pursuant to which Mr. Hadjipateras may be deemed to share the power to vote and
dispose of such shares; and (iv) 2,708,557 shares by virtue of a revocable proxy granted to Mr. Hadjipateras by each of Mark C.
Hadjipateras, Angeliki C. Hadjipateras, Aikaterini C. Hadjipateras, Konstantinos Markakis, Scott M. Sambur, as Trustee of the Kyveli Trust,
and George J. Dambassis, pursuant to which Mr. Hadjipateras may be deemed to share the power to vote such shares. Mr. Hadjipateras
disclaims beneficial ownership of the reported Dorian shares, and the proceeds thereof, except to the extent of any pecuniary interest therein.
(8)
According to filings made with the Commission, Mr. Coleman beneficially owns 33,096 Dorian common shares. According to filings made
with the Commission, Mr. Coleman serves as co-President of Kensico alongside Mr. Lowenstein. As a controlling person of Kensico, Mr.
Coleman thus may be deemed to also beneficially own the entire number of the Company’s common shares held by the Investment Funds
discussed above. Mr. Coleman disclaims beneficial ownership of the reported Dorian shares held by the Investment Funds, and the proceeds
thereof, except to the extent of any pecuniary interest therein.
(9) Mr. Lycouris beneficially owns 220,122 common shares. Mr. Lycouris may also be deemed to indirectly beneficially own 200,000 common
of our common shares through the Kyveli Trust, of which Mr. Lycouris and other members of his family are beneficiaries. Mr. Lycouris
disclaims all beneficial ownership of the common shares beneficially owned by the Kyveli Trust except to the extent of his pecuniary interest
therein.
(10) According to filings made with the Commission, Mr. Young has pledged 13,083 shares to John C. Hadjipateras as security under a funding
and security agreement.
(11) Does not include 52,000 shares of restricted stock units that are subject to vesting.
(12) To avoid double counting: (i) the 200,000 common shares that may be deemed to be indirectly beneficially owned by Mr. Lycouris through
the Kyveli Trust and Mr. Hadjipateras by virtue of a revocable proxy (see Notes 7 and 9 above) are included only once in the total and (ii)
the 13,083 common shares that may be deemed to be beneficially owned by Theodore B. Young and John C. Hadjipateras (see Notes 9 and
11 above) are included only once in the total.
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Equity Compensation Plan Information
The following table shows information relating to the number of shares authorized for issuance under our equity
compensation plans as of March 31, 2021.
March 31, 2021
Equity compensation plans
Approved by shareholders
Not approved by shareholders
Total
_________________
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
Weighted average exercise
price of outstanding
options, warrants and
rights
Number of securities
remaining available for
future issuance under
equity compensation plans
—
—
—
—
—
—
445,216 (1)
–
445,216
(1)
Represents available shares for future issuance under the 2014 Equity Incentive Plan as of March 31, 2021. See “2014 Equity Incentive Plan”
above.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
We describe below transactions and series of similar transactions, since the beginning of our last fiscal year, to which
we were and are a party, in which:
●
●
the amounts involved exceeded or will exceed $120,000; and
any of our directors, executive officers or holders of more than 5% of our common stock, or an affiliate or
immediate family member thereof, had or will have a direct or indirect material interest.
Except as noted otherwise, the Audit Committee or the Board of Directors approved or ratified each arrangement
described below (other than arrangements that were entered into prior to the adoption of the related party transaction policy by
the Board of Directors).
Business Relationships and Related Person Transactions Policy
We have policies and procedures in place regarding referral of related person transactions to our Audit Committee for
consideration and approval. Compensation matters involving any related persons are reviewed and approved by our
Compensation Committee. Our Chief Financial Officer, in consultation with our outside counsel, is primarily responsible for the
development and implementation of processes and controls to obtain information from the directors and executive officers with
respect to related person transactions and for determining, based on the relevant facts and circumstances, whether a related person
has a direct or indirect material interest in the transaction. Under our policy, transactions that (i) involve directors, director
nominees, executive officers, significant shareholders or other “related persons” in which the Company is or will be a participant
and (ii) are of the type that must be disclosed under the Commission’s rules must be referred by the Chief Financial Officer, after
consultation with our outside counsel, to our Audit Committee for the purpose of determining whether such transactions are in
the best interests of the Company. Under our policy, it is the responsibility of the individual directors, director nominees,
executive officers and holders of five percent or more of the Company’s common stock to promptly report to our Chief Financial
Officer all proposed or existing transactions in which the Company and they, or any related person of theirs, are parties or
participants. The Chief Financial Officer (or the Chief Executive Officer, in the event the transaction in question involves the
Chief Financial Officer or a related person of the Chief Financial Officer) is then required to furnish to the chairperson of the
Audit Committee reports relating to any transaction that, in the Chief Financial Officer’s judgment with advice of outside
counsel, may require reporting pursuant to the Commission’s rules or may otherwise be the type of transaction that should be
brought to the attention of the Audit Committee. The Audit Committee considers material facts and circumstances concerning the
transaction in question,
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consults with counsel and other advisors as it deems advisable and makes a determination or recommendation to the Board of
Directors and appropriate officers of the Company with respect to the transaction in question. In its review, the Audit Committee
considers the nature of the related person’s interest in the transaction, the material terms of the transaction, the relative
importance of the transaction to the related person, the relative importance of the transaction to the Company and any other
matters deemed important or relevant. Upon receipt of the Audit Committee’s recommendation, the Board of Directors or
officers, excluding in all such instances the related party, take such action as deemed appropriate and necessary in light of their
respective responsibilities under applicable laws and regulations.
Related Party Transactions
Registration Rights Agreement
We entered into a registration rights agreement dated June 3, 2014 (the “Registration Rights Agreement”) with Kensico
granting Kensico the right, subject to certain terms and conditions, to require us, on up to three separate occasions beginning 180
days following the closing of our initial public offering, to register under the Securities Act of 1933, as amended, our common
shares held by Kensico for offer and sale to the public, including by way of an underwritten public offering. In addition, the
registration rights agreement grants Kensico the right to require us to make available shelf registration statements permitting sales
of shares into the market from time to time over an extended period, and to exercise certain piggyback registration rights
permitting participation in certain registrations of common shares by us. All expenses relating to our registration have been and
will be borne by us. On July 10, 2015, the Commission declared effective our registration statement on Form S-3 that permits
Kensico to offer its shares for resale from time to time, pursuant to the Registration Rights Agreement.
Management Agreements
As of July 1, 2014, vessel management services and the associated agreements for our fleet were transferred from
DHSA and are now provided through our wholly owned subsidiaries Dorian LPG (USA) LLC, Dorian LPG (UK) Ltd. and
Dorian LPG Management Corp. Prior to the management transfer, DHSA had agreements with Eagle Ocean, a company 100%
owned by Mr. John C. Hadjipateras, the Chairman of the Board, our President and our Chief Executive Officer, to provide certain
of the vessel management services for our fleet.
In connection with the agreements for the management transfer, Eagle Ocean transferred a certain number of employees
and selected assets to our wholly-owned subsidiaries. Eagle Ocean incurs miscellaneous costs, for which we reimbursed Eagle
Ocean less than $0.1 million for the fiscal year ended March 31, 2021.
Dorian LPG (USA) LLC and its subsidiaries entered into an agreement with DHSA, retroactive to July 2014 and
superseding an agreement between Dorian LPG (UK) Ltd. and DHSA, for the provision by Dorian LPG (USA) LLC and its
subsidiaries of certain chartering and marine operation services to DHSA, for which income was earned and included in other
income totaling $0.1 million for the year ended March 31, 2021. As of March 31, 2021, $1.0 million was due from DHSA.
For further information regarding our transactions with related parties, please see Note 3 to our audited consolidated
financial statements included herein.
Arrangements Involving Family Members
In respect of the year ended March 31, 2021, we paid $576,500 in salary and cash bonus to Mr. Alexander C.
Hadjipateras, a son of Mr. John C. Hadjipateras, the Chairman of the Board, our President and our Chief Executive Officer, for
his service as Executive Vice President of Business Development of Dorian LPG (USA) LLC. In the year ended March 31, 2021,
Mr. Alexander C. Hadjipateras was also eligible to participate in all benefit programs generally available to employees, including
supplemental health care benefits for coverage outside of the United States, and his compensation is commensurate with that of
his peers.
In respect of the year ended March 31, 2021, we paid $195,618 in salary and cash bonus to Peter Hadjipateras, a son of
Mr. John C. Hadjipateras, the Chairman of the Board, our President and our Chief Executive Officer, for his service
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as Fleet Efficiency Manager. In the year ended March 31, 2021, Mr. Peter Hadjipateras was also eligible to participate in all
benefit programs generally available to employees and his compensation is commensurate with that of his peers.
Director Independence
The Board of Directors has determined that, as of the date hereof, each of the following members of our Board of
Directors is an “independent director” as defined under the applicable NYSE standards, Commission rules and the Company’s
Corporate Governance Guidelines: Messrs. Thomas J. Coleman, Ted Kalborg, Øivind Lorentzen and Malcolm McAvity, and Ms.
Christina Tan. Therefore, our Board of Directors has satisfied its objective as set forth in the Company’s Corporate Governance
Guidelines as well as NYSE listing standards, requiring that at least a majority of the Board consist of independent directors. As
required under the NYSE listing standards, in making its determinations, our Board of Directors has considered whether any
director has a direct or indirect material relationship with us that could compromise his or her ability to exercise independent
judgment in carrying out his or her responsibilities. In addition, our Board of Directors considered a series of certain specific
transactions, relationships and arrangements expressly enumerated in the NYSE independence definition. Specifically, a member
of our Board of Directors may be considered independent if such member:
●
●
●
●
●
●
has not been employed by the Company within the last three years (other than as interim Chairman of the Board of
Directors or interim Chief Executive Officer);
does not have an immediate family member who is, or has been, employed by the Company as an executive officer
within the last three years;
has not received, and does not have an immediate family member who has received, more than $120,000 in direct
compensation from the Company during any twelve-month period within the last three years, other than for services
as a member of the Board of Directors or compensation for prior service (including pension or other forms of
deferred compensation for prior service, provided such compensation is not contingent in any way on continued
service); provided that, compensation received by a director for former service as an interim Chairman or Chief
Executive Officer or other executive officer need not be considered in determining independence under this test;
provided further that, compensation received by an immediate family member for service as an employee of the
Company (other than an executive officer) need not be considered in determining independence under this test;
(A) is not a current partner or employee of a firm that is the Company’s internal or external auditor; (B) does not
have an immediate family member who is a current partner of a firm that is the Company’s internal or external
auditor; (C) does not have an immediate family member who is a current employee of a firm that is the Company’s
internal or external auditor and personally works on the Company’s audit; and (D) is not, and has not been within
the last three years, and does not have an immediate family member who is, or has been within the last three years,
a partner or employee of a firm that is the Company’s internal or external auditor and personally worked on
Company’s audit within such time;
is not, and has not been within the last three years, and does not have an immediate family member who is, or has
been within the last three years, employed as an executive officer of a public company where any of the Company’s
present executive officers at the same time serves or served as a member of such public company’s compensation
committee; and
is not, and has not been within the last three years, an employee of a significant customer or supplier of the
Company, including any company that has made payments to, or received payments from, the Company for
property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or
2% of such other company’s consolidated gross revenues, and does not have an immediate family member who is,
or has been within the last three years, an executive officer of such a significant customer or supplier; provided that
contributions to not- for-profit organizations shall not be considered payments for purposes of this test.
After careful review of the categorical tests enumerated under the NYSE independence definition, the individual
circumstances of each director with regard to each director’s business and personal activities and relationships as they may
103
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relate to us and our management, the Board has concluded that each of the aforementioned directors has no relationship with the
Company that would interfere with such director’s exercise of independent judgment in carrying out his responsibilities as a
director of the Company.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The following table presents fees for professional services rendered by Deloitte Certified Public Accountants S.A.
(“Deloitte”), our independent registered public accounting firm, for the years ended March 31, 2021 and 2020. Deloitte did not
bill us for other services during those periods.
Audit fees(1)
All other fees(2)
Total
_____________________
2021
2020
$
$
517,135
3,828
520,963
$
$
464,542
-
464,542
(1) Audit fees consist of aggregate fees for professional services, including out-of-pocket expenses, provided in connection with services rendered
for the integrated or financial statement audits of our consolidated financial statements, reviews of interim financial statements included in
filings with the Commission, services performed in connection with our registration statement on Form S-3 filed with the Commission in
2020, and other audit services required for SEC or other regulatory filings and related comfort letters, consents and assistance with and review
of documents filed with the Commission.
(2) All other fees consist of a subscription for accounting research software.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee charter sets forth our policy regarding retention of the independent auditors, giving the Audit
Committee responsibility for the appointment, replacement, compensation, evaluation and oversight of the work of the
independent auditors. As part of this responsibility, our Audit Committee pre-approves the audit and non-audit services
performed by our independent auditors in order to assure that they do not impair the auditor’s independence from the Company.
The Audit Committee has adopted a policy which sets forth the procedures and the conditions pursuant to which services
proposed to be performed by the independent auditors may be pre-approved.
There were no non-audit services provided by our independent registered public accounting firm during the fiscal year
ended March 31, 2021 with the exception of providing a subscription for accounting research software.
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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
PART IV
1. Financial Statements
Reports of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of March 31, 2021 and 2020
Consolidated Statements of Operations for the years ended March 31, 2021, 2020 and 2019
Consolidated Statements of Shareholders’ Equity for the years ended March 31, 2021, 2020 and 2019
Consolidated Statements of Cash Flows for the years ended March 31, 2021, 2020 and 2019
Notes to Consolidated Financial Statements
2. Financial Statement Schedules
All schedules have been omitted because they are not applicable, not required or the information is included elsewhere in the Financial
Statements or Notes thereto.
3. Exhibits
See accompanying Exhibit Index included after the signature page of this Report for a list of exhibits filed or furnished with or
incorporated by reference in this annual report.
105
Table of Contents
Exhibit Number
3.1
3.2
3.3
4.1
4.2
10.1*
10.2
10.3
10.4
10.5
10.6
EXHIBIT INDEX
Description
Articles of Incorporation, incorporated by reference to Exhibit 3.1 to the Company’s Registration
Statement on Form F-1 (Registration Number 333-194434), filed with the Commission on March 7,
2014.
Bylaws, incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form F-1
(Registration Number 333- 194434), filed with the Commission on March 7, 2014.
Amendment to Articles of Incorporation, incorporated by reference to Exhibit 3.3 to the Company's
Registration Statement on Form F-1/A (Registration Number 333-194434), filed with the Commission on
April 28, 2014.
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), filed with the Commission on
March 7, 2014.
Description of Securities.
Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to the Company's Registration Statement
on Form F-1/A (Registration Number 333-194434), filed with the Commission on April 28, 2014.
Registration Rights Agreement by and between Dorian LPG Ltd. and Kensico Capital Management
Corporation, incorporated by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-K
filed with the Commission on May 31, 2016.
Form of General Agency Agreement with Dorian LPG Management Corp., incorporated by reference to
Exhibit 4.22 to the Company’s Annual Report on Form 20-F filed with the Commission on July 30,
2014.
Administrative, Advisory and Support Services Agreement between Dorian LPG Ltd. and Dorian LPG
(USA) LLC, incorporated by reference to Exhibit 4.24 to the Company’s Annual Report on Form 20-F
filed with the Commission on July 30, 2014.
$446 million Amended and Restated Facility Agreement, dated April 29, 2020, between by and among
Dorian LPG Finance LLC, as borrower, the Company, as facility guarantor, certain wholly-owned
subsidiaries of the Company as upstream guarantors, ABN Amro Capital USA LLC, Citibank N.A.,
London Branch, ING Bank N.V., London Branch, Crédit Agricole Corporate and Investment Bank and
Skandinaviska Enskilda Banken AB (publ), as bookrunners, and the lenders party to the agreement
incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K filed with the
SEC on June 12, 2020.
Letter Agreement dated July 14, 2020 among Dorian LPG Finance LLC, as borrower, the Company, as
facility guarantor, certain wholly-owned subsidiaries of the Company as upstream guarantors, ABN
AMRO Capital USA LLC, as administrative agent, security agent and lender, and Citibank N.A., London
Branch, The Export-Import Bank of Korea, ING Bank N.V., London Branch, Crédit Agricole Corporate
and Investment Bank and Skandinaviska Enskilda Banken AB (PUBL), as lenders, incorporated by
reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on
August 4, 2020.
106
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10.7
10.8*
10.9
21.1
23.1
23.2
31.1
31.2
32.1†
32.2†
Consent to Effectiveness of New Financial Covenants Effective Date dated July 14, 2020 by ABN
AMRO Capital USA LLC, Citibank N.A., London Branch, The Export-Import Bank of Korea, ING Bank
N.V., London Branch, Crédit Agricole Corporate and Investment Bank and Skandinaviska Enskilda
Banken AB (PUBL), as lenders, addressed to Citibank N.A., London Branch, as ECA Agent, and ABN
AMRO Capital USA LLC, as administrative agent, incorporated by reference to Exhibit 10.2 to the
Company’s Quarterly Report on Form 10-Q filed with the SEC on August 4, 2020.
2014 Executive Severance and Change in Control Severance Plan, incorporated by reference to Exhibit
10.11 to the Company’s Annual Report on Form 10-K filed with the Commission on May 31, 2016.
Form of Restricted Stock Award Agreement, incorporated by reference to Exhibit 10.1 of the Company’s
Current Report on Form 8-K filed with the Commission on June 22, 2016.
List of Subsidiaries.
Consent of Independent Registered Public Accounting Firm.
Consent of Seward & Kissel LLP.
Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
Certifications of Chief 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
XBRL Taxonomy Extension Schema Presentation Linkbase.
†
of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
This certification is deemed not filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability
*
Indicates management contract or compensatory plan.
107
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: June 2, 2021
Dorian LPG Ltd.
(Registrant)
/s/ John C. Hadjipateras
John C. Hadjipateras
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on June 2, 2021 on behalf of the registrant and in the capacities indicated.
Signature
Capacity
/s/ John C. Hadjipateras
John C. Hadjipateras
/s/ Theodore B. Young
Theodore B. Young
/s/ John C. Lycouris
John C. Lycouris
/s/ Thomas J. Coleman
Thomas J. Coleman
/s/ Ted Kalborg
Ted Kalborg
/s/ Øivind Lorentzen
Øivind Lorentzen
/s/ Malcolm McAvity
Malcolm McAvity
/s/ Christina Tan
Christina Tan
President, Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
Director
Director
Director
Director
Director
Director
108
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DORIAN LPG LTD.
INDEX TO THE FINANCIAL STATEMENTS
Reports of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of March 31, 2021 and 2020
Consolidated Statements of Operations for the years ended March 31, 2021, 2020 and 2019
Consolidated Statements of Shareholders' Equity for the years ended March 31, 2021, 2020 and 2019
Consolidated Statements of Cash Flows for the years ended March 31, 2021, 2020 and 2019
Notes to Consolidated Financial Statements
F-2
F-4
F-5
F-6
F-7
F-8
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Dorian LPG Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Dorian LPG Ltd. and subsidiaries (the "Company") as of
March 31, 2021 and 2020, the related consolidated statements of operations, shareholders' equity, and cash flows for each of the
three years in the period ended March 31, 2021, and the related notes (collectively referred to as the "financial statements"). In
our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31,
2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2021,
in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of March 31, 2021, based on criteria established in Internal
Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
and our report dated June 2, 2021, expressed an unqualified opinion on the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte Certified Public Accountants S.A.
Athens, Greece
June 2, 2021
We have served as the Company’s auditor since 2013.
F-2
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Dorian LPG Ltd.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Dorian LPG Ltd. and subsidiaries (the “Company”) as of March
31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of March 31, 2021, based on criteria established in Internal Control
— Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements as of and for the year ended March 31, 2021, of the Company and our report
dated June 2, 2021, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Annual
Report on Internal Control Over Financial Reporting”. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required
to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte Certified Public Accountants S.A.
Athens, Greece
June 2, 2021
We have served as the Company’s auditor since 2013.
F-3
Table of Contents
Dorian LPG Ltd.
Consolidated Balance Sheets
(Expressed in United States Dollars, except for number of shares)
As of
March 31, 2021
As of
March 31, 2020
Assets
Current assets
Cash and cash equivalents
Restricted cash—current
Short-term investments
Trade receivables, net and accrued revenues
Due from related parties
Inventories
Prepaid expenses and other current assets
Total current assets
Fixed assets
Vessels, net
Other fixed assets, net
Total fixed assets
Other non-current assets
Deferred charges, net
Due from related parties—non-current
Restricted cash—non-current
Operating lease right-of-use assets
Other non-current assets
Total assets
Liabilities and shareholders’ equity
Current liabilities
Trade accounts payable
Accrued expenses
Due to related parties
Deferred income
Derivative instruments
Current portion of long-term operating lease liabilities
Current portion of long-term debt
Total current liabilities
Long-term liabilities
Long-term debt—net of current portion and deferred financing fees
Long-term operating lease liabilities
Derivative instruments
Other long-term liabilities
Total long-term liabilities
Total liabilities
Commitments and contingencies
Shareholders’ equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued nor outstanding
Common stock, $0.01 par value, 450,000,000 shares authorized, 51,071,409 and 59,083,290 shares
issued, 41,493,275 and 50,827,952 shares outstanding (net of treasury stock), as of March 31, 2021
and March 31, 2020, respectively
Additional paid-in-capital
Treasury stock, at cost; 9,578,134 and 8,255,338 shares as of March 31, 2021 and March 31, 2020,
respectively
Retained earnings
Total shareholders’ equity
Total liabilities and shareholders’ equity
$
$
$
$
79,330,007
5,315,951
$
—
202,221
56,191,375
2,007,464
10,296,229
153,343,247
$
$
1,377,028,255
148,836
1,377,177,091
10,158,202
23,100,000
81,241
17,672,227
82,837
1,581,614,845
9,831,328
8,765,264
117,803
853,983
1,100,529
9,591,447
51,820,283
82,080,637
539,651,761
8,080,995
3,454,862
1,521,260
552,708,878
634,789,515
48,389,688
3,370,178
14,919,384
820,846
66,847,701
1,996,203
3,270,755
139,614,755
1,437,658,833
185,613
1,437,844,446
7,336,726
23,100,000
35,629,261
26,861,551
1,573,104
1,671,959,843
13,552,796
4,080,952
436,850
2,068,205
2,605,442
9,212,589
53,056,125
85,012,959
581,919,094
17,651,939
9,152,829
1,170,824
609,894,686
694,907,645
—
—
510,715
756,776,217
(99,862,114)
289,400,512
946,825,330
1,581,614,845
$
590,833
866,809,371
(87,183,865)
196,835,859
977,052,198
1,671,959,843
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Table of Contents
Dorian LPG Ltd.
Consolidated Statements of Operations
(Expressed in United States Dollars, except for number of shares)
Revenues
Net pool revenues—related party
Time charter revenues
Other revenues, net
Total revenues
Expenses
Voyage expenses
Charter hire expenses
Vessel operating expenses
Depreciation and amortization
General and administrative expenses
Professional and legal fees related to the BW Proposal
Total expenses
Other income—related parties
Operating income/(loss)
Other income/(expenses)
Interest and finance costs
Interest income
Unrealized gain/(loss) on derivatives
Realized gain/(loss) on derivatives
Other gain/(loss), net
Total other income/(expenses), net
Net income/(loss)
Weighted average shares outstanding:
Basic
Diluted
March 31, 2021 March 31, 2020 March 31, 2019
Year ended
$
$
292,679,614
19,492,595
3,766,603
315,938,812
298,079,123
34,111,230
1,239,645
333,429,998
$
120,015,771
37,726,214
290,500
158,032,485
3,409,650
18,135,580
78,219,869
68,462,476
33,890,999
—
202,118,574
2,279,454
116,099,692
3,242,923
9,861,898
71,478,369
66,262,530
23,355,768
—
174,201,488
1,840,321
161,068,831
(27,596,124)
421,464
7,202,880
(4,568,033)
1,004,774
(23,535,039)
92,564,653 $
(36,105,541)
1,458,725
(18,206,769)
2,800,374
825,638
(49,227,573)
111,841,258 $
$
1,697,883
237,525
66,880,568
65,201,151
24,434,246
10,022,747
168,474,120
2,479,599
(7,962,036)
(40,649,231)
1,755,259
(7,816,401)
3,788,123
(61,619)
(42,983,869)
(50,945,905)
49,729,358
49,826,798
53,881,483
54,115,338
54,513,118
54,513,118
Earnings/(loss) per common share—basic
Earnings/(loss) per common share—diluted
$
$
1.86 $
1.86 $
2.08 $
2.07 $
(0.93)
(0.93)
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Table of Contents
Dorian LPG Ltd.
Consolidated Statements of Shareholders’ Equity
(Expressed in United States Dollars, except for number of shares)
Balance, April 1, 2018
Net loss for the period
Restricted share award issuances
Stock-based compensation
Purchase of treasury stock
Balance, March 31, 2019
Net income for the period
Restricted share award issuances
Stock-based compensation
Purchase of treasury stock
Balance, March 31, 2020
Net income for the period
Restricted share award issuances
Stock-based compensation
Repurchase and cancellation of common stock
Purchase of treasury stock
Balance, March 31, 2021
Number of
common
shares
Common
stock
Treasury
stock
Additional
paid-in
capital
Retained
Earnings
Total
58,640,161
$
586,402
$
(35,223,428)
$
858,109,882
$
135,940,506
$
959,413,362
—
242,354
—
—
—
2,424
—
—
—
—
—
(1,261,133)
—
(2,424)
5,476,234
—
(50,945,905)
(50,945,905)
—
—
—
—
5,476,234
(1,261,133)
58,882,515 $
588,826 $
(36,484,561) $
863,583,692 $
84,994,601 $
912,682,558
—
200,775
—
—
—
2,007
—
—
—
—
—
(50,699,304)
—
111,841,258
111,841,258
(2,007)
3,227,686
—
—
—
—
—
3,227,686
(50,699,304)
59,083,290 $
590,833 $
(87,183,865) $
866,809,371 $
196,835,859 $
977,052,198
—
393,265
—
(8,405,146)
—
—
3,933
—
(84,051)
—
—
—
—
—
(12,678,249)
—
(3,933)
3,356,199
(113,385,420)
—
92,564,653
92,564,653
—
—
—
—
—
3,356,199
(113,469,471)
(12,678,249)
51,071,409 $
510,715 $
(99,862,114) $
756,776,217 $
289,400,512 $
946,825,330
The accompanying notes are an integral part of these consolidated financial statements.
F-6
Table of Contents
Dorian LPG Ltd.
Consolidated Statements of Cash Flows
(Expressed in United States Dollars)
Cash flows from operating activities:
Net income/(loss)
Adjustments to reconcile net income/(loss) to net cash provided by operating
activities:
Depreciation and amortization
Amortization of operating lease right-of-use assets
Amortization of financing costs
Unrealized (gain)/loss on derivatives
Stock-based compensation expense
Unrealized foreign currency (gain)/loss, net
Other non-cash items, net
Changes in operating assets and liabilities
Trade receivables, net and accrued revenue
Prepaid expenses and other current assets
Due from related parties
Inventories
Other non-current assets
Operating lease liabilities—current and long-term
Trade accounts payable
Accrued expenses and other liabilities
Due to related parties
Payments for drydocking costs
Net cash provided by operating activities
Cash flows from investing activities:
Vessel-related capital expenditures
Payments for short-term investments
Purchase of investment securities
Proceeds from sale of investment securities
Proceeds from maturity of short-term investments
Payments to acquire other fixed assets
Net cash provided by/(used in) investing activities
Cash flows from financing activities:
Proceeds from long-term debt borrowings
Repayment of long-term debt borrowings
Repurchase of common stock
Financing costs paid
Net cash used in financing activities
Effects of exchange rates on cash and cash equivalents
Net increase/(decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at the beginning of the period
Cash, cash equivalents, and restricted cash at the end of the period
Supplemental disclosure of cash flow information
Cash paid during the period for interest
Cash paid for amounts included in the measurement of operating lease liabilities
Vessel-related capital expenditures included in liabilities
Financing costs included in liabilities
Reconciliation of cash and cash equivalents and restricted cash reported within
the consolidated balance sheets to the total amount of such items reported in the
statements of cash flows:
Cash and cash equivalents
Restricted cash—current
Restricted cash—non-current
Cash and cash equivalents and restricted cash at end of period shown in the
statement of cash flows
March 31, 2021
Year ended
March 31, 2020
March 31, 2019
$
92,564,653
$
111,841,258
$
(50,945,905)
68,462,476
9,218,537
4,695,360
(7,202,880)
3,356,199
(210,010)
(1,091,825)
618,625
(1,192,336)
10,656,326
(11,261)
1,490,267
(9,221,782)
212,173
4,309,014
(319,047)
(5,738,793)
170,595,696
(9,492,953)
—
(4,743,809)
275,393
15,000,000
(17,541)
1,021,090
55,378,172
(99,418,395)
(126,260,923)
(4,183,321)
(174,484,467)
205,753
(2,661,928)
87,389,127
84,727,199
21,787,205
10,088,410
320,992
596,800
79,330,007
5,315,951
81,241
$
$
$
$
66,262,530
1,885,522
2,893,392
18,206,769
3,227,686
311,539
(1,200,001)
563,272
(222,510)
(25,692,058)
115,434
(1,356,007)
(1,888,347)
1,470,669
(2,078,325)
(52,794)
(5,251,622)
169,036,407
(19,883,090)
(14,888,638)
—
1,767,906
—
(141,012)
(33,144,834)
—
(63,968,414)
(50,642,795)
(40,547)
(114,651,756)
(323,336)
20,916,481
66,472,646
87,389,127
32,461,153
2,810,468
4,408,333
595,138
48,389,688
3,370,178
35,629,261
$
$
$
$
65,201,151
—
3,136,051
7,816,401
5,476,234
303,835
(48,182)
(1,047,956)
(537,549)
(17,574,923)
(98,730)
(131,457)
—
793,925
(2,999,444)
144,129
(604,147)
8,883,433
(3,972,815)
—
(499,690)
—
—
(47,799)
(4,520,304)
65,137,500
(130,205,069)
(1,310,064)
(628,144)
(67,005,777)
(253,086)
(62,895,734)
129,368,380
66,472,646
36,906,567
—
33,015
595,138
30,838,684
—
35,633,962
84,727,199
$
87,389,127
$
66,472,646
$
$
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
F-7
Table of Contents
Dorian LPG Ltd.
Notes to Consolidated Financial Statements
(Expressed in United States Dollars)
1. Basis of Presentation and General Information
Dorian LPG Ltd. (“Dorian”) was incorporated on July 1, 2013 under the laws of the Republic of the Marshall Islands, is
headquartered in the United States and is engaged in the transportation of liquefied petroleum gas (“LPG”) worldwide through
the ownership and operation of LPG tankers. Dorian LPG Ltd. and its subsidiaries (together “we,” “us,” “our,” or the
“Company”) are focused on owning and operating very large gas carriers (“VLGCs”), each with a cargo carrying capacity of
greater than 80,000 cbm. As of March 31, 2021, our fleet consists of twenty-four VLGCs, including nineteen fuel-efficient
84,000 cbm ECO-design VLGCs (“ECO VLGCs”), three 82,000 cbm VLGCs, and two time chartered-in VLGCs. Ten of our
technically-managed ECO VLGCs are fitted with exhaust gas cleaning systems (commonly referred to as “scrubbers”) to reduce
sulfur emissions. The installation of scrubbers on an additional two of our technically-managed VLGCs was planned to be
completed during the second calendar quarter of 2021. As of March 31, 2021, contractual commitments related to scrubbers
totaled $1.5 million. On March 31, 2021, we entered into a bareboat agreement to charter-in a newbuilding dual-fuel VLGC that
is expected to be delivered in March 2023 (see Note 18 for further details).
The 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 of Dorian LPG Ltd. and its subsidiaries.
On April 1, 2015, Dorian and Phoenix Tankers Pte. Ltd. (“Phoenix”) began operations of Helios LPG Pool LLC (the
“Helios Pool”), which entered into pool participation agreements for the purpose of establishing and operating, as charterer,
under variable rate time charters to be entered into with owners or disponent owners of VLGCs, a commercial pool of VLGCs
whereby revenues and expenses are shared. See Note 3 below for further description of the Helios Pool relationship.
Our subsidiaries, which are all wholly-owned and all are incorporated in Republic of the Marshall Islands (unless
otherwise indicated below), as of March 31, 2021 are listed below.
F-8
Table of Contents
Vessel Owning Subsidiaries
Subsidiary
CMNL LPG Transport LLC
CJNP LPG Transport LLC
CNML LPG Transport LLC
Comet LPG Transport LLC
Corsair LPG Transport LLC
Corvette LPG Transport LLC
Dorian Shanghai LPG Transport LLC
Concorde LPG Transport LLC
Dorian Houston LPG Transport LLC
Dorian Sao Paulo LPG Transport LLC
Dorian Ulsan LPG Transport LLC
Dorian Amsterdam LPG Transport LLC
Dorian Dubai LPG Transport LLC
Constellation LPG Transport LLC
Dorian Monaco LPG Transport LLC
Dorian Barcelona LPG Transport LLC
Dorian Geneva LPG Transport LLC
Dorian Cape Town LPG Transport LLC
Dorian Tokyo LPG Transport LLC
Commander LPG Transport LLC
Dorian Explorer LPG Transport LLC
Dorian Exporter LPG Transport LLC
Dorian Sakura LPG Transport LLC(3)
Management Subsidiaries
Subsidiary
Dorian LPG Management Corp.
Dorian LPG (USA) LLC (incorporated in USA)
Dorian LPG (UK) Ltd. (incorporated in UK)
Dorian LPG Finance LLC
Occident River Trading Limited (incorporated in UK)
Dorian LPG (DK) ApS (incorporated in Denmark)
Dorian LPG Chartering LLC
Dorian LPG FFAS LLC
Type of
vessel
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
VLGC
Vessel’s name
Captain Markos NL
Captain John NP(2)
Captain Nicholas ML(2)
Comet
Corsair(2)
Corvette(2)
Cougar
Concorde(2)
Cobra
Continental
Constitution
Commodore
Cresques(2)
Constellation
Cheyenne
Clermont
Cratis
Chaparral
Copernicus
Commander
Challenger
Caravelle
Hull No. 1755
Built
2006
2007
2008
2014
2014
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2016
2023(4)
CBM(1)
82,000
82,000
82,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
84,000
CBM: Cubic meters, a standard measure for LPG tanker capacity
(1)
(2) Operated pursuant to a bareboat charter agreement. Refer to Notes 9 below for further information
(3) Upon delivery, will be operated pursuant to a bareboat charter agreement. Refer to Notes 18 below for further information
(4)
Expected to be delivered in 2023
Customers
For the years ended March 31, 2021 and 2020, the Helios Pool accounted for 93% and 89% of our total revenues,
respectively. No other individual charterer accounted for more than 10%. For the year ended March 31, 2019, the Helios Pool and
one other individual charterer represented 76% and 14% of our total revenues, respectively.
COVID-19
The outbreak of COVID-19 resulted in the implementation of numerous actions taken by governments and
governmental agencies in an attempt to mitigate the spread of the virus. These measures resulted in a significant reduction in
global economic activity and extreme volatility in the global financial markets. The reduction of economic activity significantly
reduced the global demand for oil, refined petroleum products (most notably aviation fuel) and LPG. We expect that the impact
of the COVID-19 virus and the uncertainty in the supply and demand for fossil fuels, including LPG, will continue to cause
volatility in the commodity markets. We experienced and may continue to experience additional costs to effect crew changes.
Although to date there has not been any significant effect on our operating activities due to COVID-19, other than an
approximately 60-day delay associated with the drydocking of one of our vessels in China
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that left drydock in April 2020, the extent to which COVID-19 will impact our results of operation and financial condition will
depend on future developments, which are highly uncertain and cannot be predicted, including among others, new information
which may emerge concerning the severity of the virus and the actions to contain or treat its impact or any resurgence or mutation
of the virus, the availability of vaccines and their global deployment, the development of effective treatments, the imposition of
effective public safety and other protective measures and the public’s response to such measures. There continues to be a high
level of uncertainty relating to how the pandemic will evolve, how governments and consumers will react and progress on the
approval and distribution of vaccines. An estimate of the impact cannot therefore be made at this time.
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 operations 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): We follow the accounting guidance relating to comprehensive income, which
requires separate presentation of certain transactions that are recorded directly as components of shareholders’ equity.
We have no other comprehensive income/(loss) items and, accordingly, comprehensive income/(loss) equals net
income/(loss) for the periods presented and thus we have not presented this in the consolidated statement of operations
or in a separate statement.
(d) Foreign currency translation: Our functional currency 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 periods presented, we had no foreign currency derivative instruments.
(e) Cash and cash equivalents: We consider 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) Short-term investments: We consider short-term, highly-liquid time deposits placed with financial institutions, which
are readily convertible into known amounts of cash with original maturities of more than three months, but less than 12
months at the time of purchase to be short-term investments.
(g) Investment securities: All of our investment securities held are classified as available-for-sale securities and are
available to be sold in the future in response to our liquidity needs and asset-liability management strategies, among
other considerations. Investment securities are reported at fair value, with unrealized gains and losses reported in in
other gain/(loss), net on our consolidated statements of operations.
(h) Trade receivables, net and accrued revenues: Trade receivables, net and accrued revenues, 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 periods presented was zero.
(i) Due from related parties: Due from related parties reflect receivables from the Helios Pool and other related parties.
Distributions of earnings due from the Helios Pool are classified as current and working capital contributed to the Helios
Pool is classified as non-current.
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(j) 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 net
realizable value. Cost is determined by the first in, first out method. Net realizable value is the estimated selling price,
less reasonably predictable costs of disposal and transportation.
(k) Vessels, net: Vessels, net are stated at cost net of accumulated depreciation and impairment charges. 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. Allocated interest costs
incurred during construction are capitalized. Subsequent expenditures for conversions and major improvements,
including scrubbers, 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.
(l) Impairment of vessels: We review our 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.
(m) 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. Secondhand vessels are depreciated from the date of their acquisition through
their remaining estimated useful life.
(n) Drydocking and special survey costs: Drydocking and special survey costs are accounted for 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. The classification societies provide guidelines applicable to LPG vessels
relating to extended intervals for drydocking. Generally, we are required to drydock each of our vessels under 15 years
of age every five years until they reach 15 years of age unless an extension of the drydocking to seven and one-half
years is requested and granted by the classification society and the vessel is not older than 20 years of age. 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.
(o) Financing costs: Financing costs 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/credit facilities repaid or refinanced is either expensed in the period the
repayment or refinancing is made, or deferred and amortized over the terms of the respective credit facility, 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 as a reduction of Long-term debt—net of current portion and deferred
financing fees in the consolidated balance sheet.
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(p) Restricted cash: Restricted cash represents minimum liquidity to be maintained with certain banks under our borrowing
arrangements, pledged cash deposits, and amounts held in escrow. The restricted cash is classified as non-current in the
event that its obligation is not expected to be terminated within the next twelve months as they are long-term in nature.
(q) Leases: Refer to Note 10 for a description of our operating lease expenses for the years ended March 31, 2021, 2020,
and 2019 and to Note 18 for a description of commitments related to our leases as of March 31, 2021. The following is a
description of our leasing arrangements.
Time charter-out contracts
Our time charter revenues are generated from our vessels being hired by a third-party charterer for a specified period in
exchange for consideration, which is based on a monthly hire rate. The charterer has the full discretion over the ports
subject to compliance with the applicable charter party agreement and relevant laws. In a time charter contract, we are
responsible for all the costs incurred for running the vessel such as crew costs, vessel insurance, repairs and
maintenance, and lubricants. The charterer bears the voyage related costs such as bunker expenses, port charges and
canal tolls during the hire period. The performance obligations in a time charter contract are satisfied on a straight-line
basis over the term of the contract beginning when the vessel is delivered to the charterer until it is redelivered back to
us. The charterer generally pays the charter hire monthly in advance. We determined that our time charter contracts are
considered operating leases and therefore fall under the scope of the guidance because (i) the vessel is an identifiable
asset, (ii) we do not have substantive substitution rights, and (iii) the charterer has the right to control the use of the
vessel during the term of the contract and derives the economic benefits from such use. Under the guidance, we elected
the practical expedient available to lessors to not separate the lease and non-lease components included in the time
charter revenue because (i) the pattern of revenue recognition for the lease and non-lease components is the same as it is
earned by the passage of time and (ii) the lease component, if accounted for separately, would be classified as an
operating lease.
Time charter revenues are recognized when an agreement exists, the price is fixed, service is provided and the collection
of the related revenue is reasonably assured. We record time charter revenues on a straight-line basis over the term of
the charter as service is provided. Time charter revenues received in advance of the provision of charter service are
recorded as deferred income and recognized when the charter service is rendered. Deferred income or accrued revenue
also may result from straight-line revenue recognition in respect of charter agreements that provide for varying charter
rates. Deferred income and accrued revenue amounts that will be recognized within the next twelve months are
presented as current, with amounts to be recognized thereafter presented as non-current. Revenues earned through the
profit-sharing arrangements in the time charters represent contingent rental revenues that are recognized when earned
and amounts are reasonably assured based on estimates provided by the charterer.
Net pool revenues—related party
As from April 1, 2015, we began operation of a pool. Net pool revenues—related party for each vessel in the pool is
determined in accordance with the profit-sharing terms specified within the pool agreement. In particular, the pool
manager calculates the net pool revenues using gross revenues less voyage expenses of all the pool vessels and less the
general and administrative expenses of the pool and distributes the net pool revenues as time charter hire to participants
based on:
● pool points (vessel attributes such as cargo carrying capacity, fuel consumption, and speed are taken into
consideration); and
● number of days the vessel participated in the pool in the period.
We recognize net pool revenues—related party on a monthly basis, when the vessel has participated in the pool during
the period and the amount of net pool revenues for the month can be estimated reliably. Revenue generated from the
pool is accounted for as revenue from operating leases.
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Time charter-in contracts
(r)
Our time charter-in contracts relate to the charter-in activity of vessels from third parties for a specified period of time in
exchange for consideration, which is based on a monthly hire rate. We elected the practical expedient of the guidance
that allows for contracts with an initial lease term of 12 months or less to be excluded from the operating lease right-of-
use assets and lease liabilities recognized on our consolidated balance sheets.
Under the guidance, we elected the practical expedients available to lessees to not separate the lease and non-lease
components included in the charter hire expense because (i) the pattern of revenue recognition for the lease and non-
lease components is the same as it is earned by the passage of time and (ii) the lease component, if accounted for
separately, would be classified as an operating lease. We elected not to separate the lease and non-lease components
included in charter hire expense, but to recognize operating lease expense as a combined single lease component for all
time charter-in contracts.
Office leases
We carried forward our historical assessments of (i) whether contracts are or contain leases, (ii) lease classifications, and
(iii) initial direct costs. For leases with terms greater than 12 months, we record the related right-of-use asset and lease
liability as the present value of fixed lease payments over the lease term. For leases that do not provide a readily
determinable discount rate, we use our incremental borrowing rate to discount lease payments to present value.
Under the guidance, we elected the practical expedients available to lessees to not separate the lease and non-lease
components included in the office lease expense because (i) the pattern of revenue recognition for the lease and non-
lease components is the same as it is earned by the passage of time and (ii) the lease component, if accounted for
separately, would be classified as an operating lease. We elected not to separate the lease and non-lease components
included in general and administrative expenses, but to recognize operating lease expense as a combined single lease
component for all office leases.
Voyage charter revenues: In a voyage charter contract, a charterer hires a vessel to transport a specific agreed-upon
cargo for a single voyage, which may contain multiple load ports and discharge ports. The consideration in such a
contract is determined on the basis of a freight rate per metric ton of cargo carried or occasionally on a lump sum basis.
The charter party generally has a minimum amount of cargo. The charterer is liable for any short loading of cargo or
"dead" freight. The contract generally has standard payment terms of freight paid within three to five days after
completion of loading. The contract generally has a "demurrage" or "despatch" clause. As per this clause, the charterer
reimburses us for any potential delays exceeding the allowed laytime as per the charter party clause at the ports visited
which is recorded as demurrage revenue. Conversely, the charterer is given credit if the loading/discharging activities
happen within the allowed laytime, known as despatch, resulting in a reduction in revenue. The voyage contracts
generally have variable consideration in the form of demurrage or despatch. Revenue from voyage charters is
recognized when (i) the parties to the contract have approved the contract in the form of a written charter agreement and
are committed to perform their respective obligations, (ii) we can identify each party’s rights regarding the services to
be transferred, (iii) we can identify the payment terms for the services to be transferred, (iv) the charter agreement has
commercial substance (that is, the risk, timing, or amount of our future cash flows is expected to change as a result of
the contract) and (v) it is probable that we will collect substantially all of the consideration to which we will be entitled
in exchange for the services that will be transferred to the charterer.
Voyage charter agreements do not contain a lease and are therefore considered service contracts that fall under the
provisions of Accounting Standard Codification (“ASC”) 606 Revenue from Contracts with Customers. Voyage
contracts are considered service contracts which fall under the provisions of ASC 606 because we retain control over the
operations of the vessel, including directing the routes taken and vessel speed. Voyage contracts generally have variable
consideration in the form of demurrage or despatch. We determined that a voyage charter agreement includes a single
performance obligation, which is to provide the charterer with an integrated transportation service within a specified
time period. In addition, we have concluded that a contract for a voyage
F-13
Table of Contents
charter meets the criteria to recognize revenue over time because the charterer simultaneously receives and consumes
the benefits of our performance as the voyage progresses and therefore revenues are recognized on a pro rata basis over
the duration of the voyage determined on a load-to-discharge port basis. In the event a vessel is acquired or sold while a
voyage is in progress, the revenue recognized is based on an allocation formula agreed between the buyer and the seller.
Demurrage income represents payments by the charterer to the vessel owner when loading or discharging time exceeds
the stipulated time in the voyage charter and is recognized when earned and collection is reasonably assured. Despatch
expense represents payments by us to the charterer when loading or discharging time is less than the stipulated time in
the voyage charter and is recognized as incurred. Voyage charter revenue relating to voyages in progress as of the
balance sheet date are accrued and presented in Trade receivables and accrued revenue in the consolidated balance
sheet.
(s) Voyage expenses: Voyage expenses are expensed as incurred, except for expenses during the ballast portion of the
voyage (period between the contract date and the date of the vessel’s arrival to the load port). Any expenses incurred
during the ballast portion of the voyage such as bunker expenses, canal tolls and port expenses are deferred and are
recognized on a straight-line basis, in voyage expenses, over the voyage duration as we satisfy the performance
obligations under the contract provided these costs are (1) incurred to fulfill a contract that we can specifically identify,
(2) able to generate or enhance resources of the company that will be used to satisfy performance of the terms of the
contract, and (3) expected to be recovered from the charterer. These costs are considered contract fulfillment costs
because the costs are direct costs related to the performance of the contract and are expected to be recovered.
(t) Commissions: Charter hire commissions to brokers or managers, if any, are deferred and amortized over the related
charter period and are included in Voyage expenses.
(u) Charter hire expenses: Charter hire expenses in relation to vessels that we may occasionally charter in from third
parties are recorded on a straight-line basis over the term of the charter as service is provided. Charter hire expenses
paid in advance of the provision of charter service are recorded as a current asset and recognized when the charter
service is rendered. Deferred expenses also may result from straight-line recognition in respect of charter agreements
that provide for varying charter rates. Deferred expense amounts that will be recognized within the next twelve months
are presented as current, with amounts to be recognized thereafter presented as noncurrent.
(v) Vessel operating expenses: Vessel operating expenses are accounted for as incurred on the accrual basis. Vessel
operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and
maintenance, the cost of spares and consumable stores and other miscellaneous expenses.
(w) 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.
(x) Stock-based compensation: Stock-based payments to employees and directors are determined based on their grant date
fair values and are amortized against income over the vesting period. The fair value is considered to be the closing price
recorded on the grant date. We account for restricted stock award forfeitures upon occurrence.
(y) Stock repurchases: We record the repurchase of our shares of common stock at cost based on the settlement date of the
transaction. These shares are classified as treasury stock unless canceled, which is a reduction to shareholders’ equity.
Treasury shares are included in authorized and issued shares, but excluded from outstanding shares.
(z) Segment reporting: Each of our vessels serves 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, we have determined that our Company operates in one reportable segment, the international transportation of liquid
petroleum gas with its fleet of vessels. Furthermore, when we charter 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.
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(aa) Derivative instruments: All derivatives are stated 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 and their fair value changes are
recognized 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 recognized in current period earnings or in other
comprehensive income/(loss) (effective portion) until the hedged item is recognized in the consolidated statements of
operations. For the periods presented, no derivatives were accounted for as accounting hedges.
(ab) 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.
(ac) Recent accounting pronouncements:
Accounting Policies Not Yet Adopted
In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.
2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial
Reporting (“ASU 2020-04”).” ASU 2020-04 provides temporary optional expedients and exceptions to the guidance in
U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the
expected market transition from LIBOR and other interbank offered rates to alternative reference rates. This ASU is
effective for adoption at any time between March 12, 2020 and December 31, 2022. In January 2021, FASB issued ASU
2021-01 (Topic 848), which amends and clarifies the existing accounting standard issued in March 2020 for Reference
Rate Reform. Reference rates such as LIBOR, are widely used in a broad range of financial instruments and other
agreements. The ASU permits entities to elect certain optional expedients and exceptions when accounting for
derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash
flows, for computing variation margin settlements, and for calculating price alignment interest in connection with
reference rate reform activities under way in global financial markets (the “discounting transition”). We are currently
evaluating the impact of this adoption on our consolidated financial statements and related disclosures.
3. Transactions with Related Parties
Dorian (Hellas) S.A.
Dorian (Hellas) S.A. (“DHSA”) formerly provided technical, crew, commercial management, insurance and accounting
services to our vessels and had agreements to outsource certain of these services to Eagle Ocean Transport Inc. (“Eagle Ocean
Transport”), which is 100% owned by Mr. John C. Hadjipateras, our Chairman, President and Chief Executive Officer.
Dorian LPG (USA) LLC and its subsidiaries entered into an agreement with DHSA, retroactive to July 2014 and
superseding an agreement between Dorian LPG (UK) Ltd. and DHSA, for the provision by Dorian LPG (USA) LLC and its
subsidiaries of certain chartering and marine operation services to DHSA, for which income was earned and included in “Other
income-related parties” totaling $0.1 million, $0.1 million and $0.2 million for the years ended March 31, 2021, 2020 and 2019,
respectively. As of March 31, 2021, $1.0 million was due from DHSA and included in “Due from related parties.” As of
March 31, 2020, $1.3 million was due from DHSA and included in “Due from related parties.”
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Helios LPG Pool LLC (“Helios Pool”)
On April 1, 2015, Dorian and Phoenix began operations of the Helios Pool, which entered into pool participation
agreements for the purpose of establishing and operating, as charterer, under variable rate time charters to be entered into with
owners or disponent owners of VLGCs, a commercial pool of VLGCs whereby revenues and expenses are shared. We hold a
50% interest in the Helios Pool as a joint venture with Phoenix and all significant rights and obligations are equally shared by
both parties. All profits of the Helios Pool are distributed to the pool participants based on pool points assigned to each vessel as
variable charter hire and, as a result, there are no profits available to the equity investors as a share of equity. We have
determined that the Helios Pool is a variable interest entity as it does not have sufficient equity at risk. We do not consolidate the
Helios Pool because we are not the primary beneficiary and do not have a controlling financial interest. In consideration of
Accounting Standards Codification (“ASC”) 810-10-50-4e, the significant factors considered and judgments made in determining
that the power to direct the activities of the Helios Pool that most significantly impact the entity’s economic performance are
shared, in that all significant performance activities which relate to approval of pool policies and strategies related to pool
customers and the marketing of the pool for the procurement of customers for the pool vessels, addition of new pool vessels and
the pool cost management, require unanimous board consent from a board consisting of two members from each joint venture
investor. Further, in accordance with the guidance in ASC 810-10-25-38D, the Company and Phoenix are not related parties as
defined in ASC 850 nor are they de facto agents pursuant to ASC 810-10, the power over the significant activities of the Helios
Pool is shared, and no party is the primary beneficiary in the Helios Pool, or has a controlling financial interest. As of
March 31, 2021, the Helios Pool operated thirty VLGCs, including twenty-two vessels from our fleet (including two vessels time
chartered-in from unrelated parties), four Phoenix vessels, and four from other participants.
As of March 31, 2021, we had net receivables from the Helios Pool of $78.1 million (net of an amount due to Helios
Pool of $0.1 million which is reflected under “Due to related Parties”), including $24.2 million of working capital contributed for
the operation of our vessels in the pool. As of March 31, 2020, we had receivables from the Helios Pool of $88.1 million (net of
an amount due to Helios Pool of $0.4 million which is reflected under “Due to related Parties”), including $24.2 million of
working capital contributed for the operation of our vessels in the pool. Our maximum exposure to losses from the pool as of
March 31, 2021 is limited to the receivables from the pool. The Helios Pool does not have any third-party debt obligations. The
Helios Pool has entered into commercial management agreements with each of Dorian LPG (UK) Ltd. and Phoenix as
commercial managers and has appointed both commercial managers as the exclusive commercial managers of pool vessels. Fees
for commercial management services provided by Dorian LPG (UK) Ltd. are included in “Other income-related parties” in the
consolidated statement of operations and were $2.0 million, $1.6 million and $2.2 million for the years ended March 31, 2021,
2020 and 2019, respectively. Additionally, we received a fixed reimbursement of expenses such as costs for security guards and
war risk insurance for vessels operating in high risk areas from the Helios Pool, for which we earned $3.5 million, $1.2 million
and $0.3 million for the years ended March 31, 2021, 2020 and 2019 respectively, and are included in “Other revenues, net” in
the consolidated statement of operations.
Through our vessel owning subsidiaries, we have chartered vessels to the Helios Pool during the years ended March 31,
2021, 2020 and 2019. The time charter revenue from the Helios Pool is variable depending upon the net results of the pool,
operating days and pool points for each vessel. The Helios Pool enters into voyage and time charters with external parties and
receives freight and related revenue and, where applicable, incurs voyage costs such as bunkers, port costs and commissions. At
the end of each month, the Helios Pool calculates net pool revenues using gross revenues, less voyage expenses of all pool
vessels, less fixed time charter hire for any time chartered-in vessels, less the general and administrative expenses of the pool.
Net pool revenues, less any amounts required for working capital of the Helios Pool, are distributed, to the extent they have been
collected from third-party customers of the Helios Pool, as variable rate time charter hire for the relevant vessel to participants
based on pool points (vessel attributes such as cargo carrying capacity, fuel consumption, and speed are taken into consideration)
and number of days the vessel participated in the pool in the period. We recognize net pool revenues on a monthly basis, when
each relevant vessel has participated in the pool during the period and the amount of net pool revenues for the month can be
estimated reliably. Revenue earned from the Helios Pool is presented in Note 13.
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4. Inventories
Our inventories by type were as follows:
Lubricants
Victualing
Bonded stores
Total
5. Vessels, Net
Balance, April 1, 2019
Other additions
Depreciation
Balance, April 1, 2020
Other additions
Depreciation
Balance, March 31, 2021
March 31, 2021
March 31, 2020
$
$
1,475,228
404,419
127,817
2,007,464
$
$
1,544,352
328,297
123,554
1,996,203
Cost
1,732,993,810 $
24,291,423
—
1,757,285,233 $
5,372,597
—
1,762,657,830 $
Accumulated
depreciation
Net book Value
(254,473,496) $
—
(65,152,904)
(319,626,400) $
—
(66,003,175)
(385,629,575) $
1,478,520,314
24,291,423
(65,152,904)
1,437,658,833
5,372,597
(66,003,175)
1,377,028,255
$
$
$
Additions to vessels, net mainly consisted of the installment payments on the purchase of scrubbers and other capital
improvements for certain of our VLGCs during the years ended March 31, 2021 and 2020. Our vessels, with a total carrying
value of $1,337.4 million and $1,437.7 million as of March 31, 2021 and 2020, respectively, are first-priority mortgaged as
collateral for our long-term debt (refer to Note 9 below). No impairment loss was recorded for the periods presented.
6. Other Fixed Assets, Net
Other fixed assets, net were $0.1 million and $0.2 million as of March 31, 2021 and March 31, 2020, respectively, and
represent leasehold improvements, software and furniture and fixtures at cost. Accumulated depreciation on other fixed assets,
net was $0.3 million as of both March 31, 2021 and March 31, 2020.
7. Deferred Charges, Net
The analysis and movement of deferred charges, net is presented in the table below:
Balance, April 1, 2019
Additions
Amortization
Balance, March 31, 2020
Additions
Amortization
Balance, March 31, 2021
F-17
Drydocking
costs
2,000,794
6,329,877
(993,945)
7,336,726
5,178,916
(2,357,440)
10,158,202
$
$
$
Table of Contents
8. Accrued Expenses
Accrued expenses comprised of the following:
Accrued contingent claim
Accrued voyage and vessel operating expenses
Accrued employee-related costs
Accrued professional services
Accrued loan and swap interest
Accrued board of directors' fees
Other
Total
9. Long-Term Debt
Description of our Debt Obligations
2015 AR Facility
$
$
$
March 31, 2021 March 31, 2020
—
2,473,385
949,310
266,836
284,985
88,750
17,686
4,080,952
4,000,000
2,730,803
1,301,510
523,950
204,237
—
4,764
8,765,264
$
In March 2015, we entered into a $758 million debt financing facility with four separate tranches (collectively, with its
amendments and restatement, the “2015 AR Facility”). Commercial debt financing (“Commercial Financing”) of $249 million
was provided by ABN AMRO Capital USA LLC (“ABN”); ING Bank N.V., London Branch, ("ING"); DVB Bank SE ("DVB");
Citibank N.A., London Branch (“Citi”); and Commonwealth Bank of Australia, New York Branch, ("CBA") (collectively the
"Commercial Lenders"), while the Export Import Bank of Korea ("KEXIM") directly provided $204 million of financing
(“KEXIM Direct Financing”). The remaining $305 million of financing was provided under tranches guaranteed by KEXIM of
$202 million (“KEXIM Guaranteed”) and insured by the Korea Trade Insurance Corporation ("K-sure") of $103 million (“K-sure
Insured”). Financing under the KEXIM guaranteed and K-sure insured tranches are provided by certain Commercial Lenders;
Deutsche Bank AG; and Santander Bank, N.A. As of March 31, 2021, the debt financing is secured by, among other things,
fifteen of our ECO VLGCs. On April 29, 2020, we amended and restated the 2015 AR Facility to among other things, refinance
the commercial tranche from the 2015 AR Facility (the “Original Commercial Tranche”). Pursuant to the April 2020 amendment
and restatement of the 2015 AR Facility, certain new facilities (the “New Facilities”) were made available to us, including (i) a
new senior secured term loan facility in an aggregate principal amount of $155.8 million, a portion of which was used to prepay
in full the outstanding principal amount under the Original Commercial Tranche and the balance for general corporate purposes
and (ii) a new senior secured revolving credit facility in an aggregate principal amount of up to $25.0 million, which we intend to
use for general corporate purposes. On July 14, 2020 (with retroactive effect to June 30, 2020), we amended the 2015 AR Facility
and received approvals from those lenders constituting the “Required Lenders” under the 2015 AR Facility, as applicable, to
modify certain financial and security covenants to reflect the Company’s current financial condition.
The 2015 AR Facility contains various covenants providing for, among other things, maintenance of certain financial
ratios and certain limitations on payment of dividends, investments, acquisitions and indebtedness.
The 2015 AR 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’ insurances, earnings, requisition compensation, and management
agreements; (iii) first priority security interests in respect of all issued shares or 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;
(v) assignments of the interests of any ship manager in the insurances of the financed vessels; (vi) an assignment by the borrower
of any bank, deposit or certificate of deposit opened in accordance with the facility; and (vii) a guaranty by the Company
guaranteeing the obligations of the borrower and other guarantors under the facility agreement. The 2015 AR 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 2015 AR Facility also 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
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management of the vessels, or entry into a new line of business. 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 from paying dividends if
an event of default has occurred and is continuing, or if an event of default would result therefrom.
The following financial covenants are the most restrictive from the 2015 AR Facility with which the Company is
required to comply, 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
be 145%.
● Minimum liquidity covenant of $27.5 million; and
● Minimum cash balance $1.0 million per mortgaged vessel;
The provision applicable to our minimum cash balance requirements were modified under the terms of the amendment
to the 2015 AR Facility and as a result our minimum cash balance no longer meets the criteria to be recognized as restricted cash.
Accordingly, and with retroactive effect to June 30, 2020, we no longer classify these amounts as restricted cash on our
consolidated balance sheets. This requirement was reduced from $2.2 million per mortgaged vessel under the initial 2015 AR
Facility to $1.0 million per mortgaged vessel per the July 14, 2020 amendment.
The advances in connection with New Facilities are to be repaid on the earlier of (i) the fifth (5th) anniversary of the
utilization date of the new senior secured term loan facility, described above, and (ii) March 26, 2025. The New Facilities bear
interest at the rate of LIBOR plus a margin of 2.50%. The margin can be decreased by 10 basis points if the Security Leverage
Ratio (which is based on our security value ratio for vessels secured under the 2015 AR Facility) is less than .40 or increased by
10 basis points if it is greater than or equal to .60. Pursuant to the terms of the 2015 AR Facility, we have the potential to receive
a 10 basis point increase or reduction in the margin applicable to the New Facilities for changes in our Average Efficiency Ratio
(which weighs carbon emissions for a voyage against the design deadweight of a vessel and the distance traveled on such
voyage). As of March 31, 2021, the set margin was 2.40%.
Certain terms of the borrowings under each tranche of the 2015 AR Facility are as follows:
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Commercial Financing
KEXIM Direct Financing
KEXIM Guaranteed
K-sure Insured
Term
10 years(3)
12 years(4)
12 years(4)
12 years(4)
Interest Rate Description(1)
London InterBank Offered Rate (“LIBOR”) plus
a margin(5)
LIBOR plus a margin of 2.45%
LIBOR plus a margin of 1.40%
LIBOR plus a margin of 1.50%
Interest Rate at
March 31, 2021(2)
2.60 %
2.65 %
1.60 %
1.70 %
(1)
The interest rate of the 2015 AR Facility on Tranche 1 is determined in accordance with the agreement as three- or six- month LIBOR plus the
applicable margin and the interest rate on Tranches 2, 3 and 4 is determined in accordance with the agreement as three- month LIBOR plus the
applicable margin for the respective tranches.
(2)
The LIBOR rate in effect as of March 31, 2021 was 0.20%.
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Table of Contents
(3)
(4)
(5)
The 2015 AR Facility extended the commercial tranche’s term from 7 to 10 years.
The KEXIM Direct Financing, KEXIM Guaranteed, and K-Sure tranches have put options to call for the prepayment on the final payment date of
the Commercial Financing tranche subject to specific notifications and commitments for refinancing/renewal of the Commercial Financing tranche.
The Commercial Financing tranche margin over LIBOR is 2.50% and is reduced by 10 basis points if the Security Leverage Ratio (which is based
on our security value ratio for vessels secured under the 2015 AR Facility) is less than .40 or increased by 10 basis points if it is greater than or
equal to .60. We also have the potential to receive a 10 basis point increase or reduction in the margin applicable to the New Facilities for changes
in our Average Efficiency Ratio (which weighs carbon emissions for a voyage against the design deadweight of a vessel and the distance traveled
on such voyage). As of March 31, 2021, the set margin was 2.40%.
The 2015 AR Facility permits the lenders to accelerate the indebtedness if, without the prior written consent of the
lenders, (i) one-third of our common shares are owned by any shareholder other than certain entities, directors or officers listed in
the agreement; (ii) there are certain changes to our board of directors; or (iii) Mr. John C. Hadjipateras ceases to serve on our
board of directors.
We were in compliance with all financial covenants as of March 31, 2021.
Corsair Japanese Financing
On November 7, 2017, we refinanced a 2014-built VLGC, the Corsair, pursuant to a memorandum of agreement and a
bareboat charter agreement (“Corsair Japanese Financing”). In connection therewith, we transferred the Corsair to the buyer for
$65.0 million and, as part of the agreement, Corsair LPG Transport LLC, our wholly-owned subsidiary, bareboat chartered the
vessel back for a period of 12 years, with purchase options from the end of year 2 onwards through a mandatory buyout by 2029.
We continue to technically manage, commercially charter, and operate the Corsair. We received $52.0 million in cash as part of
the transaction with $13.0 million to be retained by the buyer as a deposit (the “Corsair Deposit”), which can be used by us
towards the repurchase of the vessel either pursuant to an early buyout option or at the end of the 12-year bareboat charter term.
The refinancing proceeds of $52.0 million were used to prepay $30.1 million of the then outstanding principal amount of debt
related to the Corsair. The remaining proceeds were used to pay legal fees associated with this transaction and for general
corporate purposes. The Corsair Japanese Financing is treated as a financing transaction and the VLGC continues to be recorded
as an asset on our balance sheet. This debt financing has a fixed interest rate of 4.9%, not including financing costs of $0.1
million, monthly broker commission fees of 1.25% over the 12-year term on interest and principal payments made, broker
commission fees of 1% of the purchase option price excluding the Corsair Deposit, and a monthly fixed straight-line principal
obligation of approximately $0.3 million over the 12-year term with a balloon payment of $13.0 million.
Concorde Japanese Financing
On January 31, 2018, we refinanced a 2015-built VLGC, the Concorde, pursuant to a memorandum of agreement and a
bareboat charter agreement. In connection therewith, we transferred the Concorde to the buyer for $70.0 million and, as part of
the agreement, Concorde LPG Transport LLC, our wholly-owned subsidiary, bareboat chartered the vessel back for a period of
13 years, with purchase options from the end of year 3 onwards through a mandatory buyout by 2031. We continue to technically
manage, commercially charter, and operate the Concorde. We received $56.0 million in cash as part of the transaction with $14.0
million to be retained by the buyer as a deposit (the “Concorde Deposit”), which can be used by us towards the repurchase of the
vessel either pursuant to an early buyout option or at the end of the 13-year bareboat charter term. The refinancing proceeds of
$56.0 million were used to prepay $35.1 million of the 2015 AR Facility’s then outstanding principal amount. Pursuant to an
amendment to the 2015 AR Facility and in conjunction with this prepayment, $1.6 million of restricted cash was released under
the 2015 AR Facility. The remaining proceeds were, or will be, used to pay legal fees associated with this transaction and for
general corporate purposes. This transaction is treated as a financing transaction and the Concorde continues to be recorded as an
asset on our balance sheet. This debt financing has a fixed interest rate of 4.9%, not including financing costs of $0.1 million,
monthly broker commission fees of 1.25% over the 13-year term on interest and principal payments made, broker commission
fees of 1% of an exercised purchase option excluding the Concorde Deposit, and a monthly fixed straight-line principal
obligation of approximately $0.3 million over the 13-year term with a balloon payment of $14.0 million.
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Table of Contents
Corvette Japanese Financing
On March 16, 2018, we refinanced a 2015-built VLGC, the Corvette, pursuant to a memorandum of agreement and a
bareboat charter agreement. In connection therewith, we transferred the Corvette to the buyer for $70.0 million and, as part of the
agreement, Corvette LPG Transport LLC, our wholly-owned subsidiary, bareboat chartered the vessel back for a period of 13
years, with purchase options from the end of year 3 onwards through a mandatory buyout by 2031. We continue to technically
manage, commercially charter, and operate the Corvette. We received $56.0 million in cash as part of the transaction with $14.0
million to be retained by the buyer as a deposit (the “Corvette Deposit”), which can be used by us towards the repurchase of the
vessel either pursuant to an early buyout option or at the end of the 13-year bareboat charter term. The refinancing proceeds of
$56.0 million were used to prepay $33.7 million of the 2015 AR Facility’s then outstanding principal amount. Pursuant to an
amendment to the 2015 AR Facility and in conjunction with this prepayment, $1.6 million of restricted cash was released under
the 2015 AR Facility. The remaining proceeds were, or will be, used to pay legal fees associated with this transaction and for
general corporate purposes. This transaction is treated as a financing transaction and the Corvette continues to be recorded as an
asset on our balance sheet. This debt financing has a fixed interest rate of 4.9%, not including financing costs of $0.1 million,
monthly broker commission fees of 1.25% over the 13-year term on interest and principal payments made, broker commission
fees of 1% of an exercised purchase option excluding the Corvette Deposit, and a monthly fixed straight-line principal obligation
of approximately $0.3 million over the 13-year term with a balloon payment of $14.0 million.
CJNP Japanese Financing
On June 11, 2018, we refinanced our 2007-built VLGC, the Captain John NP, pursuant to a memorandum of agreement
and a bareboat charter agreement (the “CJNP Japanese Financing”). In connection therewith, we transferred the Captain John NP
to the buyer for $48.3 million and, as part of the agreement, CJNP LPG Transport LLC, our wholly-owned subsidiary, bareboat
chartered the vessel back for a period of 6 years, with purchase options from the end of year 2 through a mandatory buyout by
2024. We continue to technically manage, commercially charter, and operate the Captain John NP. We received $21.7 million,
which increased our unrestricted cash, as part of the transaction with $26.6 million to be retained by the buyer as a deposit (the
“CJNP Deposit”), which can be used by us towards the repurchase of the vessel either pursuant to an early buyout option or at the
end of the 6-year bareboat charter term. This transaction is treated as a financing transaction and the Captain John NP continues
to be recorded as an asset on our balance sheet. This debt financing had a fixed interest rate of 6.0%, not including financing
costs of $0.1 million, monthly broker commission fees of 1.25% over the 6-year term on interest and principal payments made,
broker commission fees of 0.5% paid upon the delivery of the Captain John NP to the buyer, broker commission fees of 0.5%
payable on the repurchase of the Captain John NP, and a monthly fixed straight-line principal obligation of approximately $0.1
million over the 6-year term with a balloon payment of $13.0 million. On October 13, 2020, we exercised the repurchase option
under the CJNP Japanese Financing and repurchased the Captain John NP for $18.3 million in cash and the application of the
CJNP Deposit amount of $26.6 million, which had been retained by the buyer in connection with the CJNP Japanese Financing,
towards the repurchase of the vessel.
CMNL/CJNP Japanese Financing
On June 25, 2018, we refinanced our 2006-built VLGC, the Captain Markos NL, pursuant to a memorandum of
agreement and a bareboat charter agreement (the “CMNL/CJNP Japanese Financing”). In connection therewith, we transferred
the Captain Markos NL to the buyer for $45.8 million and, as part of the agreement, CMNL LPG Transport LLC, our wholly-
owned subsidiary, bareboat chartered the vessel back for a period of 7 years, with purchase options from the end of year 2
through a mandatory buyout by 2025. We continue to technically manage, commercially charter, and operate the Captain Markos
NL. We received $20.6 million, which increased our unrestricted cash, as part of the transaction with $25.2 million to be retained
by the buyer as a deposit (the “CMNL Deposit”), which can be used by us towards the repurchase of the vessel either pursuant to
an early buyout option or at the end of the 7-year bareboat charter term. This transaction is treated as a financing transaction and
the Captain Markos NL continues to be recorded as an asset on our balance sheet. This debt financing has a fixed interest rate of
6.0%, not including financing costs of $0.1 million, monthly broker commission fees of 1.25% over the 7-year term on interest
and principal payments made, broker commission fees of 0.5% paid upon the delivery of the Captain Markos NL to the buyer,
broker commission fees of 0.5%. payable on the repurchase of the Captain Markos NL, and a monthly fixed straight-line
principal obligation of
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Table of Contents
approximately $0.1 million over the 7-year term with a balloon payment of $11.0 million. On March 26, 2021, we substituted the
Captain Markos NL with the Captain John NP within this financing. The terms of the new bareboat charter between the buyer
and CJNP LPG Transport LLC after the vessel substitution are identical.
CNML Japanese Financing
On June 26, 2018, we refinanced our 2008-built VLGC, the Captain Nicholas ML, pursuant to a memorandum of
agreement and a bareboat charter agreement (the “CNML Japanese Financing”). In connection therewith, we transferred the
Captain Nicholas ML to the buyer for $50.8 million and, as part of the agreement, CNML LPG Transport LLC, our wholly-
owned subsidiary, bareboat chartered the vessel back for a period of 7 years, with purchase options from the end of year 2
through a mandatory buyout by 2025. We continue to technically manage, commercially charter, and operate the Captain
Nicholas ML. We received $22.9 million, which increased our unrestricted cash, as part of the transaction with $27.9 million to
be retained by the buyer as a deposit (the “CNML Deposit”), which can be used by us towards the repurchase of the vessel either
pursuant to an early buyout option or at the end of the 7-year bareboat charter term. This transaction is treated as a financing
transaction and the Captain Nicholas ML continues to be recorded as an asset on our balance sheet. This debt financing has a
fixed interest rate of 6.0%, not including financing costs of $0.1 million, monthly broker commission fees of 1.25% over the 7-
year term on interest and principal payments made, broker commission fees of 0.5%, paid upon the delivery of the Captain
Nicholas ML to the buyer, broker commission fees of 0.5%, payable on the repurchase of the Captain Nicholas ML, and a
monthly fixed straight-line principal obligation of approximately $0.1 million over the 7-year term with a balloon payment of
$13.0 million.
Cresques Japanese Financing and Prepayment of the Relevant Tranches of the 2015 AR Facility
On April 21, 2020, we prepaid $28.5 million of the 2015 AR Facility’s then outstanding principal using cash on hand
prior to the closing of the Cresques Japanese Financing (defined below). On April 23, 2020, we refinanced a 2015-built VLGC,
the Cresques, pursuant to a memorandum of agreement and a bareboat charter agreement (“Cresques Japanese Financing”). In
connection therewith, we transferred the Cresques to the buyer for $71.5 million and, as part of the agreement, Dorian Dubai
LPG Transport LLC, our wholly-owned subsidiary, bareboat chartered the vessel back for a period of 12 years, with purchase
options from the end of year 3 onwards through a mandatory buyout by 2032. We continue to technically manage, commercially
charter, and operate the Cresques. We received $52.5 million in cash as part of the transaction with $19.0 million to be retained
by the buyer as a deposit (the “Cresques Deposit”), which can be used by us towards the repurchase of the vessel either pursuant
to an early buyout option or at the end of the 12-year bareboat charter term. This transaction is treated as a financing transaction
and the Cresques continues to be recorded as an asset on our balance sheet. This debt financing has a floating interest rate of one-
month LIBOR plus a margin of 2.5%, monthly broker commission fees of 1.25% over the 12-year term on interest and principal
payments made, broker commission fees of 0.5% payable on the remaining debt outstanding at the time of the repurchase of the
Cresques, and a monthly fixed straight-line principal obligation of $0.3 million over the 12-year term with a balloon payment of
$11.5 million.
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Table of Contents
Debt Obligations
The table below presents our debt obligations:
2015 AR Facility
Commercial Financing
KEXIM Direct Financing
KEXIM Guaranteed
K-sure Insured
Total 2015 AR Facility
Japanese Financings
Corsair Japanese Financing
Concorde Japanese Financing
Corvette Japanese Financing
CJNP Japanese Financing
CMNL/CJNP Japanese Financing
CNML Japanese Financing
Cresques Japanese Financing
Total Japanese Financings
Total debt obligations
Less: deferred financing fees
Debt obligations—net of deferred financing fees
Presented as follows:
Current portion of long-term debt
Long-term debt—net of current portion and deferred financing fees
Total
Deferred Financing Fees
March 31, 2021 March 31, 2020
$
$
$
$
$
$
155,205,698
89,474,512
93,997,081
46,333,895
385,011,186
40,895,833
45,500,000
46,038,462
—
16,706,845
18,855,655
49,080,000
217,076,795
602,087,981
10,615,937
591,472,044
$
$
51,820,283
539,651,761
591,472,044
$
$
$
$
$
$
$
$
163,385,998
110,716,127
115,385,072
57,098,924
446,586,121
44,145,833
48,730,769
49,269,231
19,058,750
18,076,488
20,261,012
—
199,542,083
646,128,204
11,152,985
634,975,219
53,056,125
581,919,094
634,975,219
The analysis and movement of deferred financing fees is presented in the table below:
Balance, April 1, 2019
Additions
Amortization
Balance, March 31, 2020
Additions
Amortization
Balance, March 31, 2021
Financing
costs
14,005,830
40,547
(2,893,392)
11,152,985
4,158,312
(4,695,360)
10,615,937
$
$
$
Additions for the year ended March 31, 2021 and 2020 represent financing costs associated with the 2015 AR Facility,
Cresques Japanese Financing, and CMNL/CJNP Japanese Financing, which have been deferred and are amortized over the life of
the respective agreements and are included as part of interest and finance costs in the consolidated statements of operations.
F-23
Table of Contents
Future Cash Payments for Debt
The minimum annual principal payments, in accordance with the loan agreements, required to be made after March 31,
2021 are as follows:
Year ending March 31:
2022
2023
2024
2025
2026
Thereafter
Total
10. Leases
Time charter-in contracts
$
$
51,820,283
51,820,283
51,820,283
204,625,981
72,907,782
169,093,369
602,087,981
During the year ended March 31, 2021, we time chartered-in a vessel that was delivered to us in May 2020 with a
duration of 12 months with no option periods and, therefore, this operating lease was excluded from operating lease right-of-use
asset and lease liability recognition on our consolidated balance sheets. During the year ended March 31, 2020, we time
chartered-in a VLGC for a period of greater than 12 months and the applicable right-of-use asset and lease liabilities of $27.4
million were recognized on our balance sheets as of March 31, 2020. None of the three option periods of up to an aggregate of
four years were included in the recognition of the right-of-use asset for the time chartered-in VLGC as market conditions at the
time of each option renewal election date for a time charter-in will be major factors in the decision of whether to exercise the
option and such conditions are not known at the time of initial recognition. Our time chartered-in VLGCs were deployed in the
Helios Pool and earned net pool revenues of $29.1 million, $18.3 million, and $0.1 million for the years ended March 31, 2021,
2020 and 2019, respectively.
Charter hire expenses for the VLGCs time chartered in were as follows:
Charter hire expenses
Office leases
March 31, 2021
Year ended
March 31, 2020
March 31, 2019
$
18,135,580
$
9,861,898
$
237,525
We currently have operating leases for our offices in Stamford, Connecticut, USA; London, United Kingdom;
Copenhagen, Denmark; and Athens, Greece. During the year ended March 31, 2021, we did not enter into and new office leases
and did not renew any office leases. During the year ended March 31, 2020, we renewed an operating lease for our London office
greater than 12 months and the applicable right-of-use asset and lease liabilities of $0.2 million were recognized on our balance
sheets as of March 31, 2020. At adoption of ASC 842, two option periods for our Athens office were included in the recognition
of the right-of-use asset as it is probable that the renewal options of 1-year each will be exercised. We accounted for our
Copenhagen office lease using the practical expedient for contracts with initial lease terms of 12 month or less as described above
and, during the years ended March 31, 2021 and 2020, expensed $0.1 million related to this lease within “general and
administrative expenses” on our consolidated statement of operations.
Operating lease rent expense related to our office leases was as follows:
Operating lease rent expense
March 31, 2021
Year ended
March 31, 2020
March 31, 2019
$
558,400
$
541,574
$
471,425
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For our office leases and time charter-in arrangement, the discount rate used ranged from 3.82% to 5.53%. The weighted
average discount rate used to calculate the lease liability was 3.88%. The weighted average remaining lease term on our office
leases and a time chartered-in vessel as of March 31, 2021 is 21.9 months.
Our operating lease right-of-use asset and lease liabilities as of March 31, 2021 were as follows:
Location on Balance Sheet
March 31, 2021
Description
Assets:
Non-current
Office leases
Time charter-in VLGCs
Liabilities:
Current
Office Leases
Time charter-in VLGCs
Long-term
Office Leases
Time charter-in VLGCs
Operating lease right-of-use assets
Operating lease right-of-use assets
Current portion of long-term operating leases
Current portion of long-term operating leases
Long-term operating leases
Long-term operating leases
Maturities of operating lease liabilities as of March 31, 2021 were as follows:
FY 2022
FY 2023
Total undiscounted lease payments
Less: imputed interest
Carrying value of lease liabilities
11. Common Stock
$
$
$
$
$
$
$
$
628,253
17,043,974
440,143
9,151,304
188,324
7,892,671
10,110,547
8,223,237
18,333,784
(661,342)
17,672,442
Under the articles of incorporation effective July 1, 2013, the Company’s authorized capital stock consists of
500,000,000 registered shares, par value $0.01 per share, of which 450,000,000 are designated as common share and 50,000,000
shares are designated as preferred shares.
Each holder of common shares is entitled to one vote on all matters submitted to a vote of shareholders. Subject to
preferences that may be applicable to any outstanding shares of preferred stock, holders of common shares are entitled to share
equally in any dividends, which the Company’s board of directors may declare from time to time, out of funds legally available
for dividends. Upon dissolution, liquidation or winding-up, the holders of common shares will be entitled to share equally in all
assets remaining after the payment of any liabilities and the liquidation preferences on any outstanding preferred stock. Holders
of common shares do not have conversion, redemption or pre-emptive rights.
On February 2, 2021, we announced a tender offer to purchase up to 7,407,407, or about 14.8%, of our then outstanding
common shares at a price of $13.50 per share. Based on preliminary results indicating that the tender offer was oversubscribed,
we elected to increase the number of shares accepted for payment by 997,739, or slightly less than 2% of our then outstanding
shares, pursuant to the terms of the tender offer . The number of shares we purchased and canceled from each tendering
shareholder was prorated so our purchases in the tender offer totaled of 8,405,146 shares, or approximately 16.8% of our then
outstanding common shares, for an aggregate purchase price of approximately $113.5 million.
On August 5, 2019, our Board of Directors authorized the repurchase of up to $50.0 million of our common shares
through the period ended December 31, 2020 (the “Common Share Repurchase Program”). On February 3, 2020, our Board of
Directors authorized an increase to our Common Share Repurchase Program to repurchase up to an additional $50.0 million of
our common shares. On December 29, 2020, our Board of Directors authorized an extension of and an increase to the remaining
authorization of $41.4 million under our Common Share Repurchase Program, which was set to expire on December 31, 2020.
Following this Board action, we are now authorized to repurchase up to $50.0 million of our common shares from December 29,
2020 through December 31, 2021. As of March 31, 2021, our total purchases
F-25
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under this authority totaled 5.5 million of our common shares for an aggregate consideration of $60.7 million. Following the
increase and extension of the program, we currently have $47.9 million of available share repurchase authority remaining.
Purchases may be made at our discretion in the form of open market repurchase programs, privately negotiated transactions,
accelerated share repurchase programs or a combination of these methods. The actual amount and timing of share repurchases are
subject to capital availability, our determination that share repurchases are in the best interest of our shareholders, and market
conditions. We are not obligated to make any common share repurchases under the Common Share Repurchase Program.
Refer to Note 12 below for shares granted under the equity incentive plan during the years ended March 31, 2021, 2020,
and 2019.
12. Stock-Based Compensation Plans
In April 2014, we adopted an equity incentive plan, which we refer to as the Equity Incentive Plan, under which we
expect that directors, officers, and employees (including any prospective officer or employee) of the Company and its
subsidiaries and affiliates, and consultants and service providers to (including persons who are employed by or provide services
to any entity that is itself a consultant or service provider to) the Company and its subsidiaries and affiliates, as well as entities
wholly-owned or generally exclusively controlled by such persons, may be eligible to receive non-qualified stock options, stock
appreciation rights, stock awards, restricted stock units and performance compensation awards that the plan administrator
determines are consistent with the purposes of the plan and the interests of the Company. We have reserved 2,850,000 of our
common shares for issuance under the Equity Incentive Plan, subject to adjustment for changes in capitalization as provided in
the Equity Incentive Plan in April 2014. The plan is administered by our compensation committee.
During the year ended March 31, 2021, we granted an aggregate of 188,400 shares of restricted stock vesting in
escalating installments on the grant date and on the first, second, and third anniversary of that date and 56,450 restricted stock
units to certain of our officers and employees vesting in escalating installments on the first, second, and third anniversaries of the
grant date. The shares of restricted stock and restricted stock units were valued at their grant date fair market value and are
expensed on a straight-line basis over the respective vesting periods.
During the year ended March 31, 2021, we granted 155,654 shares of stock to our President and Chief Executive
Officer, which were valued and expensed at their grant date fair market value.
During the year ended March 31, 2020 we granted an aggregate of 175,200 shares of restricted stock and 22,500
restricted stock units to certain of our officers and employees. One-fourth of the shares of restricted stock vested on the grant date
and one-fourth will vest equally on the first, second and third anniversaries of the grant date. One-third of restricted stock units
will vest equally on the first, second, and third anniversaries of the grant date. The shares of restricted stock and restricted stock
units were valued at their grant date fair market value and are expensed on a straight-line basis over the respective vesting
periods.
During the year ended March 31, 2019, we granted 200,000 shares of restricted stock to certain of our officers and
employees. One-fourth of these restricted shares vested immediately on the grant date, one-fourth vested one year after grant
date, one-fourth will vest two years after grant date, and one-fourth will vest three years after grant date. The restricted shares
were valued at their grant date fair market value and expensed on a straight-line basis over the vesting periods.
During the years ended March 31, 2021, 2020, and 2019, we granted 41,711, 24,025, and 35,295 shares of stock,
respectively, to our non-executive directors, which were valued and expensed at their grant date fair market value.
During the years ended March 31, 2020, and 2019, we granted 1,550, and 7,059, shares of stock, respectively, to a non-
employee consultant, which were valued and expensed at their grant date fair market value. No such shares were granted during
the year ended March 31, 2021.
F-26
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Our stock-based compensation expense was $3.4 million, $3.2 million and $5.5 million for the years ended
March 31, 2021, 2020, and 2019, respectively, and is included within general and administrative expenses in our consolidated
statements of operations. Unrecognized compensation cost as of March 31, 2021 was $1.9 million and the expense will be
recognized over a remaining weighted average life of 1.86 years.
A summary of the activity of our restricted shares as of March 31, 2021 and 2020 and changes during the year ended
March 31, 2021 and 2020, are as follows:
Incentive Share/Unit Awards
Unvested as of April 1, 2019
Granted
Vested
Unvested as of March 31, 2020
Granted
Vested
Forfeited
Unvested as of March 31, 2021
Number of Shares/Units
641,013
223,275
(547,240)
317,048
442,215
(400,942)
(150)
358,171
Weighted-Average
Grant-Date
Fair Value
$
$
$
13.54
8.47
14.64
8.08
8.34
8.23
8.36
8.23
The total fair value of restricted shares that vested during the years ended March 31, 2021, 2020, and 2019 was $3.4
million, $5.2 million and $3.9 million, respectively, which is calculated as the number of shares vested during the period
multiplied by the fair value on the vesting date.
13. Revenues
Revenues comprise the following:
Net pool revenues—related party
Time charter revenues
Other revenues, net
Total revenues
$
March 31, 2021
292,679,614
19,492,595
3,766,603
315,938,812
$
Year ended
March 31, 2020
$
$
$
298,079,123
34,111,230
1,239,645
333,429,998 $
March 31, 2019
120,015,771
37,726,214
290,500
158,032,485
Net pool revenues—related party depend upon the net results of the Helios Pool, and the operating days and pool points
for each vessel. Refer to Notes 2 and 3 above for further information.
Other revenues, net mainly represent income from charterers relating to reimbursement of voyage expenses such as
costs for security guards and war risk insurance.
14. Voyage Expenses
Voyage expenses comprise the following:
Bunkers
War risk insurances
Brokers’ commissions
Security cost
Port charges and other related expenses
Other voyage expenses
Total
March 31, 2021
Year ended
March 31, 2020
March 31, 2019
1,537,007
1,272,647
334,333
221,882
1,500
42,281
3,409,650
$
$
$
1,345,360
1,095,156
469,143
272,985
5,898
54,381
3,242,923 $
756,354
13,052
440,955
277,487
167,230
42,805
1,697,883
$
$
F-27
Table of Contents
15. Vessel Operating Expenses
Vessel operating expenses comprise the following:
Crew wages and related costs
Spares and stores
Repairs and maintenance costs
Insurance
Lubricants
Miscellaneous expenses
Total
16. Interest and Finance Costs
Interest and finance costs is comprised of the following:
March 31, 2021
Year ended
March 31, 2020
March 31, 2019
$
$
44,017,660
17,061,388
6,096,812
3,942,622
3,241,330
3,860,057
78,219,869
$
$
42,683,848
13,249,931
4,416,259
4,173,052
3,607,749
3,347,530
71,478,369
$
$
41,649,202
10,625,997
5,594,957
3,452,874
3,206,445
2,351,093
66,880,568
Interest incurred
Amortization of financing costs
Other financing costs
Total
17. Income Taxes
March 31, 2021
Year ended
March 31, 2020
March 31, 2019
$
$
21,665,379
4,695,360
1,235,385
27,596,124
$
$
32,355,390
2,893,392
856,759
36,105,541
$
$
36,638,171
3,136,051
875,009
40,649,231
Dorian LPG Ltd. and its vessel-owning subsidiaries are incorporated in the Marshall Islands and under the laws of the
Marshall Islands, are not subject to tax on income or capital gains and no Marshall Islands withholding tax will be imposed on
dividends paid by the Company to its shareholders. Dorian LPG Ltd. and its vessel-owning subsidiaries are also subject to United
States federal income taxation in respect of Shipping Income, unless exempt from United States federal income taxation.
If Dorian LPG Ltd. and its vessel-owning subsidiaries do not qualify for the exemption from tax under Section 883 of
the Code, Dorian LPG Ltd. and its subsidiaries will be subject to a 4% tax on its “United States source shipping income,”
imposed without the allowance for any deductions. For these purposes, “United States source shipping income” means 50% of
the Shipping Income derived by Dorian LPG Ltd. and its vessel-owning subsidiaries that is attributable to transportation that
begins or ends, but that does not both begin and end, in the United States.
For our fiscal years ended March 31, 2021, 2020, and 2019, we believe that we qualified, and we expect to qualify, for
exemption under Section 883 and as a consequence, our gross United States source shipping income will not be subject to a 4%
gross basis tax.
18. Commitments and Contingencies
Commitments under Contracts for Scrubber Purchases
We had contractual commitments to purchase scrubbers to reduce sulfur emissions as of:
Less than one year
Total
March 31, 2021
$
$
1,523,210
1,523,210
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Table of Contents
Commitments under Contracts for Ballast Water Management Systems Purchases
We had contractual commitments to purchase ballast water management systems as of:
Less than one year
Total
Commitments under Bareboat Charter Header Agreement
March 31, 2021
$
$
455,500
455,500
On March 31, 2021, we entered into a thirteen year bareboat charter agreement for a newbuilding dual-fuel VLGC that
is expected to be delivered from Kawasaki Heavy Industries in March 2023. The structure of the financing of the newbuilding is
analogous to that of our Japanese Financings in which a third-party will purchase the vessel and from whom we will bareboat
charter the vessel. As part of the agreement, we control the building of the vessel and the use of the vessel after it is delivered.
The vessel will be built to our specifications; we will supervise the building of the vessel to meet these specifications; and we will
technically and commercially manage the vessel after its delivery. Under the agreement, we have commitments of $24 million of
predelivery costs as well as the cost of additional features to meet our specifications and supervision costs for an aggregate total
of approximately $25 million. As of March 31, 2021, we expect to settle the commitments under the agreement with installment
payments totaling $16.0 million in the 12 months following March 31, 2021 and approximately $9.0 million during the year
ended March 31, 2023. As of March 31, 2021, construction of the vessel has not commenced.
Operating Leases
We had the following commitments as a lessee under operating leases relating to our United States, Greece, United
Kingdom, and Denmark offices:
Less than one year
One to three years
Total
Time Charter-in
March 31, 2021
357,432
91,318
448,750
$
$
We had the following time charter-in commitments relating to VLGCs either currently in our fleet or contracted to be
delivered to our fleet as of:
Less than one year
One to three years
Total
Fixed Time Charter Commitments
March 31, 2021
10,336,000
8,030,000
18,366,000
$
$
We had the following future minimum fixed time charter hire receipts based on non-cancelable long-term fixed time
charter contracts as of:
Less than one year
One to three years
Total
March 31, 2021
20,147,500
5,705,000
25,852,500
$
$
F-29
Table of Contents
Other
From time to time we expect to be subject to legal proceedings and claims in the ordinary course of business, principally
personal injury and property casualty claims. Such claims, even if lacking in merit, could result in the expenditure of significant
financial and managerial resources. We are not aware of any claim other than that described below, which is reasonably possible
and should be disclosed or probable and for which a provision should be established in the consolidated financial statements.
In January 2021, subsequent to the delivery of one of our VLGCs on time charter, a dispute arose relating to the vessel’s
readiness to lift a cargo scheduled by the charterer. The facts of the claim are currently in dispute. We have recorded a contingent
liability in accrued expenses on our consolidated balance sheets as of March 31, 2021 and a corresponding expense of $4.0
million during the year ended March 31, 2021 is included within general and administrative expenses on our consolidated
statement of operations.
19. Financial Instruments and Fair Value Disclosures
Our principal financial assets consist of cash and cash equivalents, investment securities, short-term investments,
restricted cash amounts due from related parties, and trade accounts receivable. Our principal financial liabilities consist of long-
term debt, accounts payable, amounts due to related parties, derivative instruments and accrued liabilities.
(a) Concentration of credit risk: Financial instruments, which may subject us to significant concentrations of credit risk,
consist principally of amounts due from our charterers, including the receivables from Helios Pool, cash and cash
equivalents, and restricted cash. We limit our credit risk with amounts due from our charterers, including those through
the Helios Pool, by performing ongoing credit evaluations of our charterers’ financial condition and generally do not
require collateral from our charterers. We limit our credit risk with our cash and cash equivalents and restricted cash by
placing it with highly-rated financial institutions.
(b) Interest rate risk: Our long-term bank loans are based on LIBOR and hence we are exposed to movements thereto. We
entered into interest rate swap agreements in order to hedge a majority of our variable interest rate exposure related to
the 2015 AR Facility.
The principal terms of our interest rate swaps are as follows:
Interest rate swap
2015 AR Facility - Citibank(1)
2015 AR Facility - ING(2)
2015 AR Facility - ABN(3)
2015 AR Facility - Citibank(4)
2015 AR Facility - Citibank(5)
2015 AR Facility - Citibank(6)
Transaction
Date
September 2015
September 2015
October 2015
October 2015
June 2016
June 2016
Termination
Date
March 2025
March 2025
March 2022
March 2022
March 2022
March 2022
Fixed
interest rate
Nominal value
March 31, 2021 March 31, 2020
Nominal value
1.091 %
1.145 %
1.468 %
1.380 %
1.213 %
1.161 %
$
$
200,000,000 $
50,000,000
26,325,000
39,487,500
35,750,774
14,690,857
366,254,131 $
200,000,000
50,000,000
37,550,000
56,325,000
43,598,575
17,915,709
405,389,284
(1)
(2)
(3)
(4)
(5)
(6)
Non-amortizing until March 2022, then reduces quarterly with a final settlement of $95.2 million in March 2025.
Non-amortizing until March 2022, then reduces quarterly with a final settlement of $23.8 million in March 2025.
Reduces quarterly by $2.8 million with a final settlement of $17.9 million due in March 2022.
Reduces quarterly by $4.2 million with a final settlement of $26.9 million due in March 2022.
Reduces quarterly by $2.0 million with a final settlement of $29.9 million due in March 2022.
Reduces quarterly by $0.8 million with a final settlement of $12.3 million due in March 2022.
(c) Fair value measurements: Interest rate swaps are stated at fair value, which is determined using a discounted cash flow
approach based on market‑based LIBOR swap yield rates. LIBOR swap rates are observable at commonly quoted
intervals for the full terms of the swaps and, therefore, are considered Level 2 items in accordance with the fair value
hierarchy. The fair value of the interest rate swap agreements approximates the amount that we would have to pay or
receive for the early termination of the agreements.
F-30
Table of Contents
Additionally, we have taken positions in freight forward agreements (“FFAs”) as economic hedges to reduce the risk
related to vessels trading in the spot market, including in the Helios Pool, and to take advantage of fluctuations in
market prices. Customary requirements for trading FFAs include the maintenance of initial and variation margins based
on expected volatility, open position and mark-to-market of the contracts. FFAs are recorded as assets/liabilities until
they are settled. Changes in fair value prior to settlement are recorded in unrealized gain/(loss) on derivatives. Upon
settlement, if the contracted charter rate is less than the average of the rates for the specified route and time period, as
reported by an identified index, the seller of the FFA is required to pay the buyer the settlement sum, being an amount
equal to the difference between the contracted rate and the settlement rate, multiplied by the number of days in the
specified period covered by the FFA. Conversely, if the contracted rate is greater than the settlement rate, the buyer is
required to pay the seller the settlement sum. Settlement of FFAs are recorded in realized gain/(loss) on derivatives.
FFAs are considered Level 2 items in accordance with the fair value hierarchy. We had no outstanding FFAs as of
March 31, 2021.
The following table summarizes the location on the balance sheet of the financial assets and liabilities that are carried at
fair value on a recurring basis, which comprise our financial derivatives all of which are considered Level 2 items in
accordance with the fair value hierarchy:
March 31, 2021
March 31, 2020
Derivatives not designated as hedging instruments
Forward freight agreements
Interest rate swap agreements
Derivatives not designated as hedging instruments
Interest rate swap agreements
$
$
$
Current assets
Derivative instruments
Current liabilities
Derivative instruments
— $
$
1,100,529
— $
— $
Current assets
Derivative instruments
Current liabilities
Derivative instruments
2,605,442
—
— $
— $
March 31, 2021
March 31, 2020
Other non-current assets
Derivative instruments
Long-term liabilities
Derivative instruments
Other non-current assets
Derivative instruments
Long-term liabilities
Derivative instruments
— $
3,454,862
$
— $
9,152,829
The effect of derivative instruments within the consolidated statement of operations for the periods presented is as
follows:
Year ended
Derivatives not designated as hedging instruments Location of gain/(loss) recognized March 31, 2021 March 31, 2020 March 31, 2019
Forward freight agreements—change in fair value
Interest rate swaps—change in fair value
Forward freight agreements—realized gain/(loss)
Interest rate swaps—realized gain/(loss)
Gain/(loss) on derivatives, net
Unrealized gain/(loss) on derivatives
Unrealized gain/(loss) on derivatives
Realized gain/(loss) on derivatives
Realized gain/(loss) on derivatives
(2,605,442) $
(15,601,327)
396,894
2,403,480
(15,406,395) $
2,605,442
4,597,438
(788,670)
(3,779,363)
2,634,847
—
(7,816,401)
—
3,788,123
(4,028,278)
$
$
$
$
As of March 31, 2021 and March 31, 2020, no fair value measurements for assets or liabilities under Level 1 or Level 3
were recognized in the consolidated balance sheets with the exception of cash and cash equivalents, restricted cash, and
securities. We did not have any assets or liabilities measured at fair value on a non-recurring basis during the years
ended March 31, 2021, 2020 and 2019.
(d) Book values and fair values of financial instruments. In addition to the derivatives that we are required to record at
fair value on our balance sheet (see (c) above) and securities that are included in other current assets in our balance sheet
that we record at fair value, we have other financial instruments that are carried at historical cost. These financial
instruments include trade accounts receivable, amounts due from related parties, cash and cash equivalents, restricted
cash, accounts payable, amounts due to related parties and accrued liabilities for which the historical carrying value
approximates the fair value due to the short-term nature of these financial instruments. Cash and cash equivalents,
restricted cash and investment securities are considered Level 1 items.
F-31
Table of Contents
The summary of gains and losses on our investment securities included in other gain/(loss), net on our consolidated
statements of operations for the periods presented is as follows:
Net gain/(loss) on investment securities
Less: Realized gain/(loss) on investment securities
Unrealized gain/(loss) on investment securities
$
$
1,317,890
295
1,317,595
$
$
1,288,304
1,281,671
6,633
$
$
March 31, 2021
Year ended
March 31, 2020
March 31, 2019
(102,244)
—
(102,244)
As of March 31, 2020, we had short-term investments in six-month U.S. treasury bills for which we had not elected the
fair value option. The fair value of these instruments is commonly quoted and would be considered Level 1 items under
the fair value hierarchy if we elected the fair value option. As of March 31, 2020, the carrying value of the short-term
investments in six-month U.S. treasury bills was $14.9 million and the fair value was $15.0 million. These short-term
investments matured during the year ended March 31, 2021 and we have no such instruments as of March 31, 2021.
We have long-term bank debt and the Cresques Japanese Financing for which we believe the carrying value
approximates their fair value as the loans bear interest at variable interest rates, being LIBOR, which is observable at
commonly quoted intervals for the full terms of the loans, and hence are considered as Level 2 items in accordance with
the fair value hierarchy. We also have long-term debt related to the Corsair Japanese Financing, Concorde Japanese
Financing,
and CNML Japanese Financing
(collectively, along with the CJNP Japanese Financing that was repaid in October 2020, the “Japanese Financings”) that
incur interest at a fixed-rate with the initial principal amount amortized to the purchase obligation price of each vessel.
The Japanese Financings are considered Level 2 items in accordance with the fair value hierarchy and the fair value of
each is based on a discounted cash flow analysis using current observable interest rates. The following table summarizes
the carrying value and estimated fair value of the Japanese Financings as of:
CMNL/CJNP Japanese Financing,
Corvette Japanese Financing,
March 31, 2021
March 31, 2020
Carrying Value
Fair Value
Carrying Value
Fair Value
$
$
40,895,833
45,500,000
46,038,462
—
16,706,845
18,855,655
$
$
44,298,064
49,791,680
50,376,434
—
18,792,993
21,195,305
$
$
44,145,833
48,730,769
49,269,231
19,058,750
18,076,488
20,261,012
$
$
48,867,762
54,407,677
55,059,323
21,006,399
20,238,260
22,728,984
Corsair Japanese Financing
Concorde Japanese Financing
Corvette Japanese Financing
CJNP Japanese Financing
CMNL/CJNP Japanese Financing
CNML Japanese Financing
20. Retirement Plans
U.S. Defined Contribution Plan
Qualifying full-time employees based in the United States participate in our 401(k) retirement plan and may contribute a
portion of their annual compensation to the plan on a tax-advantaged basis, in accordance with applicable tax law limits. On
behalf of all participants in the plan, we provide a safe harbor contribution subject to certain limitations. Employee contributions
and our safe harbor contributions are vested at all times. We recognized and paid compensation expense associated with the safe
harbor contributions totaling $0.1 million for each of the years ended March 31, 2021, 2020, and 2019.
Greece Defined Benefit Plan
Our employees based in Greece have a required statutory defined benefit pension plan according to provisions of Greek
law 2112/20 covering all eligible employees (the “Greek Plan”). We recognized compensation expense and recorded a
corresponding liability associated with our projected benefit obligation to the Greek Plan totaling $0.3 million for the year ended
March 31, 2021, less than $0.1 million for the year ended March 31, 2020, and $0.1 million for the year ended March 31, 2019.
F-32
Table of Contents
U.K. and Denmark Retirement Accounts
We contribute to retirement accounts for certain employees based in the United Kingdom and Denmark based on a
percentage of their annual salaries. For each of the years ended March 31, 2021 and 2020, we recognized compensation expense
of $0.2 million related to these contributions and for the year ended March 31, 2019, we recognized compensation expense of
$0.1 million related to these contributions.
21. Earnings/(Loss) Per Share (“EPS”)
Basic EPS represents net income/(loss) attributable to common shareholders divided by the weighted average number of
common shares outstanding during the measurement period. Our restricted stock shares include rights to receive dividends that
are subject to the risk of forfeiture if service requirements are not satisfied, thus these shares are not considered participating
securities and are excluded from the basic weighted-average shares outstanding calculation. Diluted EPS represent net
income/(loss) attributable to common shareholders divided by the weighted average number of common shares outstanding
during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the
period.
The calculations of basic and diluted EPS for the periods presented were as follows:
(In U.S. dollars except share data)
Numerator:
Net income/(loss)
Denominator:
Basic weighted average number of common shares outstanding
Effect of dilutive restricted stock and restricted stock units
Diluted weighted average number of common shares outstanding
EPS:
Basic
Diluted
$
$
$
March 31, 2021
Year ended
March 31, 2020
March 31, 2019
92,564,653
$
111,841,258
$
(50,945,905)
49,729,358
97,440
49,826,798
53,881,483
233,855
54,115,338
1.86
1.86
$
$
2.08
2.07
$
$
54,513,118
—
54,513,118
(0.93)
(0.93)
For the year ended March 31, 2019, there were 641,013 shares of unvested restricted stock excluded from the
calculation of diluted EPS because the effect of their inclusion would be anti-dilutive. There were no anti-dilutive shares of
unvested restricted stock excluded from the calculation of diluted EPS for the years ended March 31, 2021 and 2020.
22. Selected Quarterly Financial Information (unaudited)
The following tables summarize the 2021 and 2020 quarterly results:
Revenues
Operating income
Net income
Earnings per common share, basic
Earnings per common share, diluted
Revenues
Operating income
Net income
Earnings per common share, basic
Earnings per common share, diluted
$
$
$
$
Three months ended
June 30, 2020
September 30, 2020 December 31, 2020 March 31, 2021
73,165,324
22,519,802
12,168,005
0.24
0.24
$
$
54,710,277
5,413,760
537,950
0.01
0.01
$
$
88,479,024
41,875,535
35,825,264
0.71
0.71
$
$
99,584,187
46,290,595
44,033,434
0.93
0.93
Three months ended
September 30, 2019 December 31, 2019
85,437,806
$
41,758,757
35,628,912
0.66
0.66
91,624,875
49,266,427
40,711,896
0.75
0.74
$
$
$
March 31, 2020
95,201,771
49,771,141
29,425,391
0.56
0.56
$
$
June 30, 2019
61,165,546
20,272,506
6,075,059
0.11
0.11
F-33
Exhibit 4.2
DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
The following description of the terms of the capital stock of Dorian LPG Ltd. (the “Company,” “we,” “us” and
“our”) is not complete and is qualified in its entirety by reference to our Articles of Incorporation, as amended (our “articles
of incorporation”), our Bylaws, as amended (our “bylaws”), both of which are exhibits to our Annual Report on Form 10-K,
and the Business Corporations Act of 1990, as amended, of the Republic of the Marshall Islands (the “BCA”).
Authorized Capitalization
Under our articles of incorporation, our authorized share capital consists of 450 million common shares, par value
$0.01 per share, of which 41,086,069 shares were issued and outstanding as of June 1, 2021 and 50 million preferred shares,
par value $0.01 per share, of which no shares were issued and outstanding as of June 1, 2021. All of our shares are in
registered form. 9,985,340 common shares were held in treasury as of June 1, 2021.
Common Shares
Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of shareholders.
Subject to preferences that may be applicable to any outstanding preferred shares, holders of common shares are entitled to
receive ratably all dividends, if any, declared by our board of directors out of funds legally available for dividends. Upon
our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required
to be paid to creditors and to the holders of preferred shares having liquidation preferences, if any, the holders of our
common shares will be entitled to receive pro rata our remaining assets available for distribution. Holders of our common
shares do not have conversion, redemption or preemptive rights to subscribe to any of our securities. The rights, preferences
and privileges of holders of common shares are subject to the rights of the holders of any preferred shares which we may
issue in the future.
Preferred Shares
Our articles of incorporation authorize our board of directors to establish one or more series of preferred shares and
to determine, with respect to any series of preferred shares, the terms and rights of that series, including:
●
●
the designation of the series;
the number of shares of the series, which our board may, except where otherwise provided in the
preferred shares designation, increase or decrease, but not below the number of shares then outstanding;
● whether dividends, if any, will be cumulative or non-cumulative and the dividend rate of the series;
●
●
●
the dates at which dividends, if any, will be payable;
the redemption rights and price or prices, if any, for shares of the series;
the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the
series;
the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of our company;
●
● whether the shares of the series will be convertible into shares of any other class or series, or any other
security, of our company or any other corporation, and, if so, the specification of the other class or series
or other security, the conversion price or prices or rate or rates and any rate adjustments;
restrictions on the issuance of shares of the same series or of any other class or series; and
the voting rights, if any, of the holders of the series.
●
●
Authorized but Unissued Share Capital
The BCA does not require shareholders’ approval for any issuance of authorized shares.
Directors
Our articles of incorporation provide that, subject to any rights of holders of preferred shares, our directors shall be
divided into three classes. The term of office of one or another of the three classes shall expire each year. The term of our
Class I directors will expire at the annual general meeting in 2023, that of our Class II directors will expire at the annual
general meeting in 2021 and that of our Class III directors will expire at the annual general meeting in 2022. The directors
elected at our general meetings shall be identified as being directors of the same class as the ones they succeed, and shall
hold office until the third succeeding annual general meeting. Any vacancies in the Board for any reason, and any created
directorships resulting from any increase in the number of directors, may be filled by the vote of not less than a majority of
the members of the Board then in office, and any such director so chosen shall hold office until the next election of the class
for which such directors shall have been chosen and until their successors shall be elected and qualified. Our articles of
incorporation provide that no director may be removed except both for cause and with the affirmative vote of two-thirds of
the votes cast at an annual general meeting.
Shareholder Meetings
Under our bylaws, annual meetings of shareholders will be held at a time and place selected by our board of
directors. The meetings may be held in or outside of the Republic of The Marshall Islands. Special meetings may be called
at any time by a majority of our board of directors, the chairman of our board of directors or an officer of the Company who
is also a director. Our board of directors may set a record date between 15 and 60 days before the date of any meeting to
determine the shareholders that will be eligible to receive notice and vote at the meeting. One or more shareholders
representing at least one-third of the total voting rights of our total issued and outstanding shares present in person or by
proxy at a shareholder meeting shall constitute a quorum for the purposes of the meeting.
Dissenters’ Rights of Appraisal and Payment
Under the BCA, our shareholders generally have the right to dissent from the sale of all or substantially all of our
assets not made in the usual course of our business and receive payment of the fair value of their shares. However, the right
of a dissenting shareholder to receive payment of the appraised fair value of his shares is not available under the BCA for
the shares of any class or series of stock, which shares at the record date fixed to determine the shareholders entitled to
receive notice of and to vote at the meeting of the shareholders to act upon the agreement of merger or consolidation, were
either (i) listed on a securities exchange or admitted for trading on an interdealer quotation system or (ii) held of record by
more than 2,000 holders. In the event of any further amendment of our articles of incorporation, a shareholder also has the
right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares.
The dissenting shareholder must follow the procedures set forth in the BCA to receive payment.
Shareholders’ Derivative Actions
Under the BCA, any of our shareholders may bring an action in our name to procure a judgment in our favor, also
known as a derivative action, provided that the shareholder bringing the action is a holder of common shares both at the time
the derivative action is commenced and at the time of the transaction to which the action relates.
Limitations on Liability and Indemnification of Officers and Directors
The BCA authorizes corporations to limit or eliminate the personal liability of directors to corporations and their
shareholders for monetary damages for breaches of directors’ fiduciary duties, subject to certain exceptions. Our articles of
incorporation include provisions that eliminate the personal liability of directors for monetary damages for actions taken as a
director to the fullest extent permitted by law.
Our bylaws provide that we must indemnify our directors and officers to the fullest extent authorized by law. We
are also expressly authorized to advance certain expenses (including attorneys’ fees) to our directors and officers and carry
directors’ and officers’ insurance providing indemnification for our directors, officers and certain employees for some
liabilities. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors
and executive officers.
The limitation of liability and indemnification provisions in our articles of incorporation and bylaws may
discourage shareholders from bringing a lawsuit against directors or officers for breach of their fiduciary duty. These
provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even
though such an action, if successful, might otherwise benefit us and our shareholders. In addition, your investment may be
adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to
these indemnification provisions.
There is currently no pending material litigation or proceeding involving any of our directors, officers or
employees for which indemnification is sought.
Anti-takeover Effects of Certain Provisions of Our Articles of Incorporation and Bylaws
Several provisions of our articles of incorporation and bylaws, which are summarized below, may have anti-
takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change
of control and enhance the ability of our board of directors to maximize shareholder value in connection with any
unsolicited offer to acquire us. However, these anti-takeover provisions, which are summarized below, could also
discourage, delay or prevent (i) the merger or acquisition of us by means of a tender offer, a proxy contest or otherwise that
a shareholder may consider in its best interest and (ii) the removal of incumbent officers and directors.
“Blank Check” Preferred Shares
Under the terms of our articles of incorporation, our board of directors has authority, without any further vote or
action by our shareholders, to issue preferred shares and to determine, with respect to any series of preferred shares, the
terms and rights of that series. Our board of directors may issue preferred shares on terms calculated to discourage, delay or
prevent a change of control of our company or the removal of our management.
Election and removal of directors
Our articles of incorporation prohibit cumulative voting in the election of directors. Our bylaws require parties
other than the board of directors to give advance written notice of nominations for the election of directors. Our articles of
incorporation also provide that our directors may be removed for cause upon the affirmative vote of not less than two-thirds
of the outstanding shares of our capital stock entitled to vote for those directors. These provisions may discourage, delay or
prevent the removal of incumbent officers and directors.
Limited actions by stockholders
Our articles of incorporation and our bylaws provide that any action required or permitted to be taken by our
shareholders must be effected at an annual or special meeting of shareholders or by the unanimous written consent of our
shareholders. Our articles of incorporation and our bylaws provide that, unless otherwise prescribed by law, only a majority
of our board of directors, the chairman of our board of directors or an officer of the Company who is also a director may call
special meetings of our shareholders and the business transacted at the special meeting is limited to the purposes stated in
the notice. Accordingly, a shareholder may be prevented from calling a special meeting for shareholder consideration of a
proposal over the opposition of our board of directors and shareholder consideration of a proposal may be delayed until the
next annual meeting.
Advance notice requirements for shareholder proposals and director nominations
Our bylaws provide that shareholders seeking to nominate candidates for election as directors or to bring business
before an annual meeting of shareholders must provide timely notice of their proposal in writing to the
corporate secretary. Generally, to be timely, a shareholder’s notice must be received at our principal executive offices not
less than 120 days nor more than 150 days prior to the one-year anniversary of the immediately preceding annual meeting of
shareholders. Our bylaws also specify requirements as to the form and content of a shareholder’s notice. These provisions
may impede shareholders’ ability to bring matters before an annual meeting of shareholders or make nominations for
directors at an annual meeting of shareholders.
Classified board of directors
As described above, our articles of incorporation provide for the division of our board of directors into three
classes of directors, with each class as nearly equal in number as possible, serving staggered three-year terms. Accordingly,
approximately one-third of our board of directors will be elected each year. This classified board provision could
discourage a third-party from making a tender offer for our shares or attempting to obtain control of us. It could also delay
shareholders who do not agree with the policies of our board of directors from removing a majority of our board of directors
for two years.
Business combinations
Although the BCA does not contain specific provisions regarding “business combinations” between companies
organized under the laws of the Marshall Islands and “interested shareholders,” we have included these provisions in our
articles of incorporation. Specifically, our articles of incorporation prohibit us from engaging in a “business combination”
with certain persons for three years following the date the person becomes an interested shareholder. Interested
shareholders generally include:
●
●
●
●
●
●
●
●
any person who is the beneficial owner of 15% or more of our outstanding voting stock; or
any person who is our affiliate or associate and who held 15% or more of our outstanding voting stock at
any time within three years before the date on which the person’s status as an interested shareholder is
determined, and the affiliates and associates of such person.
Subject to certain exceptions, a business combination includes, among other things:
certain mergers or consolidations of us or any direct or indirect majority-owned subsidiary of ours;
any sale, lease, exchange, mortgage, pledge, transfer or other disposition of our assets or of any subsidiary
of ours having an aggregate market value equal to 10% or more of either the aggregate market value of all
of our assets, determined on a combined basis, or the aggregate value of all of our outstanding stock;
certain transactions that result in the issuance or transfer by us of any stock of ours to the interested
shareholder;
any transaction involving us or any of our subsidiaries that has the effect of increasing the proportionate
share of any class or series of stock, or securities convertible into any class or series of stock, of ours or
any such subsidiary that is owned directly or indirectly by the interested shareholder or any affiliate or
associate of the interested shareholder; and
any receipt by the interested shareholder of the benefit directly or indirectly (except proportionately as a
shareholder) of any loans, advances, guarantees, pledges or other financial benefits provided by or
through us.
These provisions of our articles of incorporation do not apply to a business combination if:
●
●
●
before a person became an interested shareholder, our board of directors approved either the business
combination or the transaction in which the shareholder became an interested shareholder;
upon consummation of the transaction which resulted in the shareholder becoming an interested
shareholder, the interested shareholder owned at least 85% of our voting stock outstanding at the time the
transaction commenced, other than certain excluded shares;
at or following the transaction in which the person became an interested shareholder, the business
combination is approved by our board of directors and authorized at an annual or special meeting of
shareholders, and not by written consent, by the affirmative vote of the holders of at least two-thirds of
our outstanding voting stock that is not owned by the interest shareholder;
●
●
●
the shareholder was or became an interested shareholder prior to the closing of this initial public offering;
a shareholder became an interested shareholder inadvertently and (i) as soon as practicable divested itself
of ownership of sufficient shares so that the shareholder ceased to be an interested shareholder; and (ii)
would not, at any time within the three-year period immediately prior to a business combination between
us and such shareholder, have been an interested shareholder but for the inadvertent acquisition of
ownership; or
the business combination is proposed prior to the consummation or abandonment of and subsequent to the
earlier of the public announcement or the notice required under our articles of incorporation which (i)
constitutes one of the transactions described in the following sentence; (ii) is with or by a person who
either was not an interested shareholder during the previous three years or who became an interested
shareholder with the approval of the board; and (iii) is approved or not opposed by a majority of the
members of the board of directors then in office (but not less than one) who were directors prior to any
person becoming an interested shareholder during the previous three years or were recommended for
election or elected to succeed such directors by a majority of such directors. The proposed transactions
referred to in the preceding sentence are limited to:
(i)
(ii)
a merger or consolidation of us (except for a merger in respect of which, pursuant to the BCA, no
vote of our shareholders is required);
a sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a
series of transactions), whether as part of a dissolution or otherwise, of assets of us or of any
direct or indirect majority-owned subsidiary of ours (other than to any direct or indirect wholly-
owned subsidiary or to us) having an aggregate market value equal to 50% or more of either the
aggregate market value of all of our assets determined on a consolidated basis or the aggregate
market value of all the outstanding shares; or
(iii)
a proposed tender or exchange offer for 50% or more of our outstanding voting stock.
Transfer Agent
The registrar and transfer agent for the common shares is Computershare Trust Company, N.A.
Listing
Our common shares are listed on the New York Stock Exchange under the symbol “LPG.”
Subsidiary
Country of Incorporation
Exhibit 21.1
Dorian LPG Management Corp.
Dorian LPG Finance LLC
Dorian LPG (USA) LLC
Dorian LPG (UK) Ltd
Occident River Trading Limited
Dorian LPG (DK) ApS
Dorian LPG Chartering LLC
Dorian LPG FFAS LLC
CNML LPG Transport LLC
CJNP LPG Transport LLC
CMNL LPG Transport LLC
Comet LPG Transport LLC
Corsair LPG Transport LLC
Corvette LPG Transport LLC
Concorde LPG Transport LLC
Constellation LPG Transport LLC
Commander LPG Transport LLC
Dorian Houston LPG Transport LLC
Dorian Shanghai LPG Transport LLC
Dorian Sao Paulo LPG Transport LLC
Dorian Ulsan LPG Transport LLC
Dorian Amsterdam LPG Transport LLC
Dorian Dubai LPG Transport LLC
Dorian Monaco LPG Transport LLC
Dorian Barcelona LPG Transport LLC
Dorian Geneva LPG Transport LLC
Dorian Cape Town LPG Transport LLC
Dorian Tokyo LPG Transport LLC
Dorian Explorer LPG Transport LLC
Dorian Exporter LPG Transport LLC
Dorian Sakura LPG Transport LLC
Marshall Islands
Marshall Islands
United States (Delaware)
United Kingdom
United Kingdom
Denmark
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statements Nos. 333-200714 and 333-233104
on Form S-3 of our reports dated June 2, 2021, relating to the consolidated financial statements of Dorian
LPG Ltd. and the effectiveness of Dorian LPG Ltd.’s internal control over financial reporting, appearing in
this Annual Report on Form 10-K for the year ended March 31, 2021.
/s/ Deloitte Certified Public Accountants S.A.
Athens, Greece
June 2, 2021
Exhibit 23.2
Consent of Counsel
Reference is made to the annual report on Form 10-K of Dorian LPG Ltd. (the “Company”) for the fiscal year ended March
31, 2021 (the “Annual Report”) and the registration statements of the Company on Form S-3 with Registration Nos. 333-
200714 and 333-233104, including the prospectuses contained therein (the “Registration Statements”). We hereby consent to
(i) the filing of this letter as an exhibit to the Annual Report, which is incorporated by reference into the Registration
Statements and (ii) each reference to us and the discussions of advice provided by us in the Annual Report under the section
“Item 1. Business—Taxation” and to the incorporation by reference of the same in the Registration Statements, in each case,
without admitting we are “experts” within the meaning of the Securities Act of 1933, as amended, or the rules and
regulations of the U.S. Securities and Exchange Commission promulgated thereunder with respect to any part of the
Registration Statements.
/s/ Seward & Kissel LLP
New York, New York
June 2, 2021
Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer
Exhibit 31.1
I, John C. Hadjipateras, certify that:
1.
I have reviewed this annual report on Form 10-K of Dorian LPG Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the
periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
Dated: June 2, 2021
/s/ John C. Hadjipateras
John C. Hadjipateras
Chief Executive Officer
Exhibit 31.2
Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer
I, Theodore B. Young, certify that:
1.
I have reviewed this annual report on Form 10-K of Dorian LPG Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the
periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
Dated: June 2, 2021
/s/ Theodore B. Young
Theodore B. Young
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual report of Dorian LPG Ltd. (the “Company”), on Form 10-K for the period ended March
31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John C. Hadjipateras,
Chief Executive Officer of the Company, certify, to the best of my knowledge, pursuant to Rule 13a-14(b) under the
Securities and Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
1.
2.
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of
1934; and
the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
Dated: June 2, 2021
/s/ John C. Hadjipateras
John C. Hadjipateras
Chief Executive Officer
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual report of Dorian LPG Ltd. (the “Company”), on Form 10-K for the period ended March
31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Theodore B. Young,
Chief Financial Officer of the Company, certify, to the best of my knowledge, pursuant to Rule 13a-14(b) under the
Securities and Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
1.
2.
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of
1934; and
the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
Dated: June 2, 2021
/s/ Theodore B. Young
Theodore B. Young
Chief Financial Officer