BW LPG Limited: Launch of Share Buy-back Program

Rhea-AI Summary

BW LPG (NYSE: BWLP) has announced a share buyback program to purchase up to 3 million ordinary shares for a maximum amount of USD 20 million from the open market. The program will run from April 8-17, 2025, with shares to be held as treasury stock.

CEO Kristian Sørensen cited the current share price trading at a significant discount to historical asset values and NAV as the reason for the buyback. This is evidenced by the recent sale of two vessels (BW Pampero and BW Chinook) to their 52% owned subsidiary at USD 75 million per ship, and share issuance at USD 17.25 per share for the Avance Gas VLGCs acquisition.

The buyback will be executed through DNB Markets on both Oslo Stock Exchange and NYSE, in compliance with Market Abuse Regulation and Safe Harbour Regulation. The program will be managed independently from future dividend considerations.

Positive

• Share buyback program of up to USD 20 million demonstrates confidence in company value
• Strong asset values evidenced by USD 75 million per vessel sale price
• Shares currently trading below NAV presents value opportunity
• Company maintains dividend flexibility independent of buyback program

Negative

• buyback window of only 9 days may impact program effectiveness
• Share price trading at significant discount to asset value indicates market undervaluation
• No guaranteed number of shares to be repurchased

Insights

Financial Analyst

BW LPG's $20 million share repurchase program represents an efficient capital allocation decision that sends a strong signal to the market. The company plans to buy back up to 3 million shares (approximately 1.5% of outstanding shares) over just nine days, indicating management's conviction in their assessment of undervaluation.

What's particularly compelling is CEO Kristian Sørensen's explicit rationale, backed by concrete evidence. He cites a substantial valuation gap between the current share price ($8.56) and management's assessment of intrinsic value. This gap is substantiated by two recent transactions:

• The sale of two 2015-built vessels at $75 million each to their 52%-owned subsidiary
• The issuance of shares at an implied value of $17.25 in the recent Avance Gas VLGC acquisition

With shares currently trading at roughly half of this implied value, the buyback effectively allows the company to acquire its own assets at a significant discount to replacement value. This represents an excellent return on invested capital if management's valuation assessment proves accurate.

The program's independence from dividend considerations preserves that avenue of shareholder returns, while the repurchase creates immediate demand for shares that could provide price support. For long-term investors, the reduced share count should enhance EPS and potentially drive multiple expansion as the market reassesses the company's value proposition.

This measured but decisive action demonstrates management's confidence in BW LPG's underlying asset values and business fundamentals while delivering immediate value to shareholders.

SINGAPORE--(BUSINESS WIRE)-- On 8 April 2025, the Board of Directors of BW LPG Limited (“BW LPG” or the “Company”, OSE ticker code: “BWLPG.OL”, NYSE ticker code: “BWLP”) has resolved to initiate a share buyback program under which BW LPG may purchase up to 3 million ordinary shares for a maximum amount of USD 20 million from the open market, subject to market conditions. The share buy-back program will commence on 8 April 2025 and continue until 17 April 2025. The shares purchased will be held as treasury shares.

The Company cannot predict how many shares it may repurchase, if any, or the timing of any repurchase or the price that will be paid for any shares repurchased under the program.

The amount utilised for the share buyback program will be treated independently from future dividend consideration, which remains at the discretion of the Board of Directors in accordance with the Company's dividend policy.

Kristian Sørensen, CEO of BW LPG, says “We are activating our share buyback program as the current share price is trading at a significant discount to both implied historical asset values and NAV. This is further demonstrated by our announcement on 31 March 2025 on the sale of the BW Pampero and BW Chinook (both built in 2015) to our 52% owned subsidiary BW LPG India at USD 75 million per ship, and the issuance of BW LPG shares at an implied value of USD 17.25 per share in connection with the acquisition of the 12 Avance Gas VLGCs (see our announcement of 31 December 2024).

The Company has put in place an agreement with DNB Markets (“DNB”) for the repurchase of the Company's shares in open market transactions on the Oslo Stock Exchange (“OSE”) and the New York Stock Exchange (“NYSE”).

Repurchases on the OSE will be completed in accordance with the Market Abuse Regulation (EU) No 596/2014 (“MAR”) and Commission Delegated Regulation (EU) 2016/1052 (“Safe Harbour Regulation”).

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act and article 5 of the European Market Abuse Regulation.

About BW LPG

BW LPG is the world’s leading owner and operator of LPG vessels, owning and operating Very Large Gas Carriers (VLGC) with a total carrying capacity of over 4 million CBM. With five decades of operating experience in LPG shipping, an in-house LPG trading division and a growing presence in LPG terminal infrastructure and distribution, BW LPG offers an integrated, flexible, and reliable service to customers along the LPG value chain. More information about BW LPG can be found at www.bwlpg.com

BW LPG is associated with BW Group, a leading global maritime company involved in shipping, floating infrastructure, deepwater oil & gas production, and new sustainable technologies. Founded in 1955 by Sir YK Pao, BW controls a fleet of over 450 vessels transporting oil, gas and dry commodities, with its 200 LNG and LPG ships constituting the largest gas fleet in the world. In the renewables space, the group has investments in solar, wind, batteries, biofuels and water treatment.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250407790150/en/

For further information, please contact

Kristian Sørensen

Chief Executive Officer

Samantha Xu

Chief Financial Officer

investor.relations@bwlpg.com

Source: BW LPG Limited

FAQ

What is the size and duration of BW LPG's (BWLP) share buyback program in April 2025?

BW LPG's buyback program allows for up to 3 million shares with a maximum spend of USD 20 million, running from April 8-17, 2025.

Why did BW LPG (BWLP) initiate the share buyback program in 2025?

The company initiated the buyback because shares were trading at a significant discount to both historical asset values and NAV.

How much did BW LPG (BWLP) sell the BW Pampero and BW Chinook vessels for in March 2025?

BW LPG sold both vessels (built in 2015) to its 52% owned subsidiary BW LPG India for USD 75 million each.

What was the implied share value of BWLP stock in the Avance Gas VLGCs acquisition?

The implied value was USD 17.25 per share in connection with the acquisition of 12 Avance Gas VLGCs.

Will BWLP's 2025 share buyback program affect future dividend payments?

No, the buyback program will be treated independently from future dividend considerations, which remain at the Board's discretion.