DORIAN LPG LTD., 20-F filed on 7/30/2014
Annual and Transition Report (foreign private issuer)
Document and Entity Information
9 Months Ended
Mar. 31, 2014
Document and Entity Information
 
Entity Registrant Name
DORIAN LPG LTD. 
Entity Central Index Key
0001596993 
Document Type
20-F 
Document Period End Date
Mar. 31, 2014 
Amendment Flag
false 
Current Fiscal Year End Date
--03-31 
Entity Well-known Seasoned Issuer
No 
Entity Current Reporting Status
Yes 
Entity Filer Category
Non-accelerated Filer 
Entity Common Stock, Shares Outstanding
48,365,012 
Document Fiscal Year Focus
2014 
Document Fiscal Period Focus
FY 
Consolidated balance sheet (USD $)
Mar. 31, 2014
Current assets
 
Cash and cash equivalents
$ 279,131,795 
Restricted cash
30,948,702 
Trade receivables, net and accrued revenue
1,966,746 
Prepaid expenses and other receivables
343,047 
Due from related parties
1,639,497 
Inventories
1,058,329 
Total current assets
315,088,116 
Fixed assets
 
Vessels, net
194,834,866 
Vessels under construction
323,206,206 
Other fixed assets, net
60,904 
Total fixed assets
518,101,976 
Other non-current assets
 
Deferred charges, net
2,555,674 
Restricted cash
4,500,000 
Total assets
840,245,766 
Current liabilities
 
Trade accounts payable
2,401,456 
Accrued expenses
2,196,386 
Due to related parties
113,465 
Deferred income
554,111 
Current portion of long-term debt
9,612,000 
Total current liabilities
14,877,418 
Long-term liabilities
 
Long-term debt-net of current portion
119,106,500 
Derivative instruments
14,062,416 
Total long-term liabilities
133,168,916 
Total liabilities
148,046,334 
Shareholders' equity
 
Preferred stock, $.01 par value, 50,000,000 shares authorized, none issued nor outstanding
   
Common stock, $.01 par value, 450,000,000 shares authorized, 48,365,012 shares issued and outstanding March 31, 2014
483,650 
Additional paid-in-capital
688,881,939 
Retained earnings
2,833,843 
Total shareholders' equity
692,199,432 
Total liabilities and shareholders' equity
$ 840,245,766 
Consolidated balance sheet (Parenthetical) (USD $)
Mar. 31, 2014
Consolidated balance sheet
 
Preferred stock, par value (in dollars per share)
$ 0.01 
Preferred stock, shares authorized
50,000,000 
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in dollars per share)
$ 0.01 
Common stock, shares authorized
450,000,000 
Common stock, shares issued
48,365,012 
Common stock, shares outstanding
48,365,012 
Consolidated statement of operations (USD $)
9 Months Ended
Mar. 31, 2014
Consolidated statement of operations
 
Revenues
$ 29,633,700 
Expenses
 
Voyage expenses
6,670,971 
Vessel operating expenses
8,394,959 
Management fees-related party
3,122,356 
Depreciation and amortization
6,620,372 
General and administrative expenses
433,674 
Total expenses
25,242,332 
Operating income
4,391,368 
Other income/(expenses)
 
Interest and finance costs
(1,579,206)
Interest income
428,201 
Loss on derivatives-net
(1,104,001)
Foreign currency gain, net
697,481 
Total other income/(loss), net
(1,557,525)
Net income/(loss)
$ 2,833,843 
Earnings per common share, basic and diluted (in dollars per share)
$ 0.09 
Weighted average common shares outstanding,-basic and diluted (in shares)
32,075,897 
Consolidated statement of shareholder's equity (USD $)
0 Months Ended 9 Months Ended
Feb. 12, 2014
Nov. 26, 2013
Jul. 29, 2013
Jul. 1, 2013
Mar. 31, 2014
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
Issuance
$ 97,175,941 
$ 362,198,636 
$ 229,991,012 
 
 
Net income/(loss) for the period
 
 
 
 
2,833,843 
Balance
 
 
 
 
692,199,432 
Common stock
 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
Issuance
56,492 
240,715 
186,443 
 
Issuance (in shares)
5,649,200 
24,071,506 
18,644,324 
100 
 
Cancellation
 
 
(1)
 
 
Cancellation (in shares)
 
 
(100)
 
(18)
Balance
 
 
 
 
483,650 
Balance (in shares)
 
 
 
 
48,365,012 
Additional paid-in capital
 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
Issuance
97,119,449 
361,957,921 
229,804,569 
99 
 
Cancellation
 
 
(99)
 
 
Balance
 
 
 
 
688,881,939 
Retained Earnings
 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
Net income/(loss) for the period
 
 
 
 
2,833,843 
Balance
 
 
 
 
2,833,843 
Due from shareholder
 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
Issuance
 
 
 
(100)
 
Cancellation
 
 
$ 100 
 
 
Consolidated statement of cash flows (USD $)
9 Months Ended
Mar. 31, 2014
Cash flows from operating activities:
 
Net income/(loss)
$ 2,833,843 
Adjustments to reconcile net income to net cash provided by operating activities:
 
Depreciation and amortization
6,620,372 
Amortization of financing costs
800,806 
Unrealized gain on derivatives
(2,623,456)
Unrealized exchange differences on cash and cash equivalents
(8,004)
Changes in operating assets and liabilities
 
Trade receivables
(1,966,746)
Prepaid expenses and other receivables
(343,047)
Due from related parties
(1,639,497)
Inventories
396,776 
Trade accounts payable
1,799,616 
Accrued expenses and deferred income
2,043,523 
Due to related parties
(292,687)
Payments for drydocking costs
(385,077)
Net cash from operating activities
7,236,422 
Cash flows from investing activities:
 
Payments for vessels and vessels under construction
(172,237,529)
Net payments to acquire Predecessor Businesses
(13,732,896)
Payments to acquire other fixed assets
(15,597)
Increase in restricted cash
(35,448,702)
Net cash used in investing activities
(221,434,724)
Cash flows from financing activities:
 
Repayment of long-term debt
(6,506,000)
Financing costs paid
(1,516,847)
Cash proceeds from common shares issuances
510,496,990 
Payments relating to issuance costs
(9,152,050)
Net cash from/(used in) financing activities
493,322,093 
Effects of exchange rates on cash and cash equivalents
8,004 
Net increase/(decrease) in cash and cash equivalents
279,131,795 
Cash and cash equivalents at the end of the period
279,131,795 
Supplemental disclosure of cash flow information
 
Cash paid during the period for interest
1,242,500 
Non cash consideration of shares issued to acquire Predecessor businesses and acquisitions of assets
$ 187,495,680 
Basis of Presentation and General Information
Basis of Presentation and General Information

1. Basis of Presentation and General Information

 

Dorian LPG Ltd. (“DLPG”) was incorporated on July 1, 2013, under the laws of the Republic of the Marshall Islands, as a wholly-owned subsidiary of Dorian Holdings LLC (“Dorian Holdings”). Dorian Holdings ceased to have control over Dorian LPG on July 29, 2013 as a consequence of the transactions described below. DLPG has a fiscal year end of March 31, and was formed to acquire, own and operate liquefied petroleum gas (“LPG”) tankers.

 

The terms “we,” “us,” “our,” and the “Company” mean DLPG and all entities included in its consolidated financial statements.

 

Effective April 25, 2014 the Company effectuated a one-for-five reverse stock split (refer Note 12). Except for the 100 shares issued at inception and subsequently cancelled, all amounts related to number of shares, per share amounts and earnings per share presented in the accompanying consolidated financial statements give retroactive effect to the reverse stock split.

 

The Company remained dormant until July 29, 2013 when the following transactions were completed concurrently:

 

·         DLPG completed a private placement of 9,310,054 shares of its common stock with institutional investors and other investors in Norway (“NPP”). The shares were issued at NOK 75.00 per share, equivalent to USD 12.66 per share and realized gross proceeds of $117.9 million based on the exchange rate on July 29, 2013.

 

·         DLPG acquired from Dorian Holdings the following in exchange for 4,667,135 shares of its common stock and $9.7 million in cash:

 

(a)     100% interest in three ship owning entities, CNML LPG Transport LLC (“CNML”), CJNP LPG Transport LLC (“CJNP”) and CMNL LPG Transport LLC (“CMNL”), which each owned a Very Large Gas Carrier (“VLGC”) (the Captain Nicholas ML, the Captain John NP and the Captain Markos NL respectively), the related bank debt, interest rate swaps, and the inventory on board each vessel. The Captain Nicholas ML, Captain John NP and Captain Markos NL were previously owned by Cepheus Transport Ltd, Lyra Gas Transport Ltd and Cetus Transport Ltd., all owned by principals of Dorian Holdings until July 29, 2013 on which date they were sold to CNML, CJNP and CMNL, respectively. The sale of the vessels required approval from the bank that had provided the related financing that was assumed by the Company in connection with the transaction and resulted in a modification of the financing terms in connection with the acquisition. A further description of the loan arrangements is provided in Note 11.

 

(b)     100% interest in two entities, each a party to a contract for the construction of one VLGC, option rights to construct an additional 1.5 VLGCs and $2.67 million in cash.

 

DLPG acquired from an affiliate of Dorian Holdings a 100% interest in an LPG pressurized gas carrier, the LPG Grendon, and the inventory onboard the vessel for $6.672 million in cash.

 

The abovementioned acquisitions from Dorian Holdings and its affiliate were accounted as a business combination (refer Note 4) and the operations of LPG Grendon along with that of the three Very Large Gas Carriers referred to above are herein referred to as the Predecessor.

 

·                  DLPG issued 4,667,135 shares of its common stock to SEACOR Holdings Inc., through its subsidiary, SeaDor Holdings LLC (“SeaDor”) as consideration for the following:

 

(a)     100% interest in a subsidiary company, SEACOR LPGI LLC, a party to a contract for the construction of one VLGC

 

(b)     $49.9 million in cash and

 

(c)     the assignment to DLPG of option rights to purchase 1.5 VLGC vessels.

 

The above mentioned acquisitions from SeaDor were accounted for as an asset acquisition. The allocation of the purchase price between the assets acquired is described in Note 3(b).

 

At the closing of the NPP, Dorian Holdings surrendered the 100 shares of capital stock of DLPG, which were then cancelled. DLPG’s shares issued under the private placements completed are listed on the Norwegian OTC A-List under the symbol DORIAN.

 

The Company successfully closed its initial public offering (“IPO”) on May 13, 2014 and its shares issued in the IPO were listed on the NYSE and trade under the symbol LPG.

 

Following the completion of the above transactions on July 29, 2013, Dorian Holdings, whose chairman is Mr. John Hadjipateras, and SeaDor, each owned approximately 25.0% of the Company’s outstanding common stock with the remaining 50% held by institutional investors and high net worth investors. No one party exercises control of the Company.

 

The accompanying 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 (collectively the “Company”).

 

The Company’s subsidiaries which are all wholly-owned and all are incorporated in Republic of the Marshall Islands (unless otherwise indicated below) as of March 31, 2014 are listed below.

 

Vessel Owning Subsidiaries

Subsidiary

 

Acquisition
Date

 

Type of
vessel(2)

 

Vessel’s name

 

Built

 

CBM(1)

 

CNML LPG Transport LLC

 

July 29, 2013

 

VLGC

 

Captain Nicholas ML

 

2008

 

82,000

 

CJNP LPG Transport LLC

 

July 29, 2013

 

VLGC

 

Captain John NP

 

2007

 

82,000

 

CMNL LPG Transport LLC

 

July 29, 2013

 

VLGC

 

Captain Markos NL

 

2006

 

82,000

 

Grendon Tanker LLC

 

July 29, 2013

 

PGC

 

LPG Grendon

 

1996

 

5,000

 

 

Newbuild Vessel Owning Subsidiaries

 

Subsidiary (Vessel’s Name)

 

Acquisition
Date

 

Type of
vessel(2)

 

Hull
number

 

Estimated
vessel
delivery date

 

CBM(1)

 

SeaCor LPG I LLC (Comet)

 

July 29, 2013

 

VLGC

 

2656

 

July 2014

 

84,000

 

SeaCor LPG II LLC (Corsair)

 

July 29, 2013

 

VLGC

 

2657

 

September 2014

 

84,000

 

Corvette LPG Transport LLC

 

July 29, 2013

 

VLGC

 

2658

 

December 2014

 

84,000

 

Dorian Shanghai LPG Transport LLC (Cougar)

 

November 26, 2013

 

VLGC

 

S749

 

April 2015

 

84,000

 

Dorian Houston LPG Transport LLC (Cobra)

 

November 26, 2013

 

VLGC

 

S750

 

April 2015

 

84,000

 

Dorian Sao Paulo LPG Transport LLC (Continental)

 

November 26, 2013

 

VLGC

 

S753

 

June 2015

 

84,000

 

Dorian Ulsan LPG Transport LLC (Constitution)

 

November 26, 2013

 

VLGC

 

S755

 

June 2015

 

84,000

 

Concorde LPG Transport LLC

 

February 12, 2014

 

VLGC

 

2660

 

June 2015

 

84,000

 

Dorian Amsterdam LPG Transport LLC (Commodore)

 

November 26, 2013

 

VLGC

 

S751

 

July 2015

 

84,000

 

Dorian Dubai LPG Transport LLC (Cresques)

 

November 26, 2013

 

VLGC

 

2336

 

August 2015

 

84,000

 

Dorian Monaco LPG Transport LLC (Cheyenne)

 

November 26, 2013

 

VLGC

 

S756

 

September 2015

 

84,000

 

Constellation LPG Transport LLC

 

February 12, 2014

 

VLGC

 

2661

 

September 2015

 

84,000

 

Dorian Geneva LPG Transport LLC (Cratis)

 

November 26, 2013

 

VLGC

 

2337

 

October 2015

 

84,000

 

Dorian Barcelona LPG Transport LLC (Clermont)

 

November 26, 2013

 

VLGC

 

S752

 

September 2015

 

84,000

 

Dorian Cape Town LPG Transport LLC (Chaparral)

 

November 26, 2013

 

VLGC

 

S754

 

October 2015

 

84,000

 

Dorian Tokyo LPG Transport LLC (Copernicus)

 

November 26, 2013

 

VLGC

 

2338

 

November 2015

 

84,000

 

Commander LPG Transport LLC

 

February 12, 2014

 

VLGC

 

2662

 

November 2015

 

84,000

 

Dorian Explorer LPG Transport LLC (Challenger)

 

November 26, 2013

 

VLGC

 

S757

 

December 2015

 

84,000

 

Dorian Exporter LPG Transport LLC (Caravel)

 

November 26, 2013

 

VLGC

 

S758

 

January 2016

 

84,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Dormant Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsidiary

 

Incorporation Date

 

 

 

 

 

 

 

 

 

Capricorn LPG Transport LLC

 

November 15, 2013

 

 

 

 

 

 

 

 

 

Comet LPG Transport LLC

 

November 11, 2013

 

 

 

 

 

 

 

 

 

Constitution LPG Transport LLC

 

February 17, 2014

 

 

 

 

 

 

 

 

 

Corsair LPG Transport LLC

 

June 24, 2013

 

 

 

 

 

 

 

 

 

Dorian LPG Management Corp

 

July 2, 2013

 

 

 

 

 

 

 

 

 

Dorian LPG (USA) Ltd (incorporated in USA)

 

July 2, 2013

 

 

 

 

 

 

 

 

 

Dorian LPG (UK) Ltd (incorporated in UK)

 

November 18, 2013

 

 

 

 

 

 

 

 

 

 

(1)                 CBM: Cubic meters, a standard measure for LPG tanker capacity.

 

(2)                 Very Large Gas Carrier (“VLGC”), Pressurized Gas Carrier (“PGC”)

 

The Company is engaged in the transportation of liquefied petroleum gas worldwide through the ownership and operation of LPG tankers. The Company outsourced the technical and commercial management of its vessels to Dorian (Hellas), S.A. (“Dorian Hellas” or the “Manager”), a related party, for the period ended March 31, 2014.

 

The following charterers individually accounted for more than 10% of the Company’s revenue for the period ended March 31, 2014:

 

Charterer

 

% of revenue

 

Statoil ASA

 

51

 

Naftomar Shipping and Trading Co. Ltd

 

13

 

Kuwait Petroleum Corporation

 

10

Significant Accounting Policies
Significant Accounting Policies

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 income 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):  The Company follows the accounting guidance relating to Comprehensive Income, which requires separate presentation of certain transactions that are recorded directly as components of stockholders’ equity. The Company has no other comprehensive income/(loss) and accordingly, comprehensive income/(loss) equals net income/(loss) for the period presented and thus has not presented this in the statement of operations or in a separate statement.

 

(d)     Foreign currency translation:  The functional currency of the Company 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 period presented, the Company had no foreign currency derivative instruments.

 

(e)     Cash and cash equivalents:  The Company considers 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)      Restricted cash:  Restricted cash represents pledged cash deposits or minimum liquidity to be maintained with certain banks under the Company’s borrowing arrangements. In the event that the obligation relating to such deposits is expected to be terminated within the next twelve months or relates to general minimum liquidity requirements with no obligation to retain such funds in retention accounts, these deposits are classified as current assets otherwise they are classified as non-current assets.

 

(g)     Trade receivables (net):  Trade receivables (net), 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 period presented was zero.

 

(h)     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 market. Cost is determined by the first in, first out method.

 

(i)      Vessels:  Vessels are stated at cost, less accumulated depreciation. 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. Interest costs incurred to finance the cost of vessels during their construction period are capitalized. Subsequent expenditures for conversions and major improvements 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.

 

(j)      Impairment of long-lived assets:  The Company reviews their 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.

 

(k)     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. Second hand vessels are depreciated from the date of their acquisition through their remaining estimated useful life.

 

(l)      Drydocking and special survey costs:  Drydocking and special survey 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 survey is scheduled to become due. We are required to drydock each of our vessels every five years until it reaches 15 years of age, after which we are required to drydock the applicable vessel every two and one-half years. 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.

 

(m)   Financing costs:  Financing fees 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 repaid or refinanced is expensed in the period the repayment or refinancing is made, 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 in Deferred charges in the accompanying consolidated balance sheet.

 

(n)     Revenues and expenses:  Revenue is recognized when an agreement exists, the vessel is made available to the charterer or services are provided, the charter hire is determinable and collection of the related revenue is reasonably assured.

 

Time charter revenue:  Time charter revenues are recorded ratably 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.

 

Voyage charter revenue:  Under a voyage charter, the revenues are recognized on a pro-rata basis over the duration of the voyage determined on a discharge—to discharge port basis but the Company does not begin recognizing revenue until a charter has been agreed to by the customer and the Company, even if the vessel has discharged its cargo and is sailing to the anticipated load port for its next voyage. 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. Dispatch expense represents payments by the Company 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 balance sheet.

 

Commissions:  Charter hire commissions to brokers or the Manager, if any, are deferred and amortized over the related charter period and are included in Voyage expenses.

 

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.

 

(o)     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.

 

(p)     Segment reporting:  Each of the Company’s vessels serve 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, the Company has determined that it operates in one reportable segment, the international transportation of liquid petroleum gas with its fleet of vessels. Furthermore, when the Company charters 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.

 

(q)     Derivative Instruments:  The Company enters into interest rate swap agreements to manage its exposure to fluctuations of interest rate risk associated with its borrowings. All derivatives are recognized in the consolidated financial statements 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. When such derivatives do not qualify for hedge accounting, the Company recognizes their fair value changes 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 offset against the fair value of assets, liabilities or firm commitments through income, or recognized in other comprehensive income/(loss) (effective portion) until the hedged item is recognized in the consolidated statements of income. For the periods presented, no derivatives were accounted for as accounting hedges.

 

(r)      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.

 

(s)      Recent accounting pronouncements:  On May 28, 2014, the FASB issued ASU 2014-09, Revenue From Contracts With Customers, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This standard is effective for public entities with reporting periods beginning after December 15, 2016. Early adoption is not permitted. The Company has not yet evaluated the impact, if any, of the adoption of this new standard.

 

Acquisition of Business
Acquisition of Business

4. Acquisition of Business

 

On July 29, 2013, Dorian Holdings sold to Dorian LPG in exchange for equity and $9.7 million in cash its 100% interest in CMNL, CJNP, CNML owners of the Captain Markos NL, Captain John NP and the Captain Nicholas ML, respectively and acquired the related inventory on board, and assumed the associated bank debt, and interest rate swap and 100% interest in two entities, each a party to a contract for the construction of one VLGC, and option rights to construct an additional 1.5 VLGCs and $2.67 million in cash. The $9.7 million cash related to the payment for inventories and LPG coolant on board of $2.3 million and to reimburse for an advance for vessels under construction of $7.4 million

 

In addition on July 29, 2013 Dorian LPG acquired 100% interest of Grendon Tanker LLC, the owner of the LPG Grendon, from an affiliate of Dorian Holdings for a cash consideration of $6,625,000 plus the value of inventory on board the vessel.

 

These acquisitions have been treated as business acquisitions and were initially recorded at fair value.

 

The following table summarizes the fair value of the consideration paid and assets/liabilities acquired.

 

Fair value of total consideration

 

 

 

Acquisition
from Dorian
Holdings

 

Grendon
acquisition

 

Total

 

Cash

 

9,732,911

 

6,672,485

 

16,405,396

 

Equity instruments (4,667,135 common shares of the Company at NOK 75.00 per share)

 

59,092,499

 

 

59,092,499

 

Total consideration

 

68,825,410

 

6,672,485

 

75,497,895

 

Fair value of identifiable assets and liabilities acquired:

 

 

 

 

 

 

 

Cash

 

2,672,500

 

 

2,672,500

 

Vessels

 

194,457,529

 

6,625,000

 

201,082,529

 

Inventories on board the vessels

 

1,407,622

 

47,485

 

1,455,107

 

Newbuilding vessels contracted for construction

 

17,593,130

 

 

17,593,130

 

Other assets—Vessel purchase options

 

4,605,000

 

 

4,605,000

 

Long term bank debt

 

(135,224,500

)

 

(135,224,500

)

Interest rate swaps

 

(16,685,871

)

 

(16,685,871

)

Net assets acquired—fair value

 

68,825,410

 

6,672,485

 

75,497,895

 

 

The fair value of the common stock was determined to be NOK75.00 per share (or $12.66 per share at the exchange rate on July 29, 2013) being the price the Company issued its common shares to private investors under its private placement which closed on the same date.

 

The vessels were acquired with attached charters. The attached charters for each vessel were evaluated by the Company based on market charter rates on the acquisition date and were found to be at market values, and thus none of the purchase consideration was allocated to the attached time charters or voyage charter.

 

The fair values of the vessels, excluding LPG coolant, on the date of acquisition were determined by the Company based on valuations from an independent broker. The appraised value was determined using recent transactions involving comparable vessels as adjusted for age and features. The appraisal was performed on “willing Seller and willing Buyer” basis and based on the sale and purchase market condition prevailing at the acquisition date subject to the vessel being in sound condition and made available for delivery charter free. The fair value of the LPG coolant at the date of acquisition was determined by the quantity purchased valued at the then current LPG rate. The fair value of the newbuilding contracts and vessel purchase options was computed as the excess of the purchase consideration for similar vessels with similar delivery dates based on valuation from an independent broker over the purchase consideration of the contracts acquired plus in respect of the newbuilding contracts any advance paid to the shipyard as of the acquisition date. The fair value of the interest rate swaps was determined using a discounted cash flow approach based on market-based LIBOR swap yield rates. The fair value of the bank debt and cash was determined to be its face value.

 

In addition, on July 29, 2013 Dorian Holdings granted the Company a royalty-free, non-exclusive right and license to use the newly created Dorian logo and “Dorian LPG”. The Company evaluated the license agreement and did not assign any value to the use of this logo and name based on the fact that it was a brand new logo, created shortly prior to the NPP and never used in the market place, and for which the Company does not have exclusive use.

 

The revenue and net income relating to the Predecessor operations acquired since their acquisition date are included in the consolidated statement of operations for the period ended March 31, 2014 and amount to $29,633,700 and $3,152,335, respectively.

 

Pro forma Information (unaudited)

 

The following table summarizes total net revenues and net income of the Company, had the acquisition of the Predecessor operations occurred on April 1, 2012:

 

$ in 000’s

 

For the year ended
March 31, 2014

 

For the year ended
March 31, 2013

 

Net revenues

 

$

45,017

 

$

38,662

 

Net income/ (loss)

 

$

6,613

 

$

(6,639

)

 

The combined results in the table above have been prepared for comparative purposes only and include acquisition related adjustments for depreciation, interest charges and management fees. The combined results do not purport to be indicative of the results of operations which would have resulted had the acquisition been effected at the beginning of the applicable period noted above, or the future results of operations of the combined entity.

Inventories
Inventories

5. Inventories

 

The Company’s inventories by type were as follows:

 

 

 

March 31, 2014

 

Bunkers

 

596,768

 

Lubricants

 

358,381

 

Victualing

 

83,840

 

Bonded stores

 

15,354

 

Communication cards

 

3,986

 

Total

 

1,058,329

 

Vessels, Net
Vessels, Net

6. Vessels, Net

 

 

 

Vessel cost

 

Accumulated
depreciation

 

Net book Value

 

Balance, July 1, 2013

 

 

 

 

Vessel acquisitions through business combinations (Refer Note 4)

 

201,082,529

 

 

201,082,529

 

Other

 

307,606

 

 

307,606

 

Depreciation

 

 

(6,555,269

)

(6,555,269

)

Balance, March 31, 2014

 

201,390,135

 

(6,555,269

)

194,834,866

 

 

The Company’s VLGC vessels with a carrying value of $188.7 million as of March 31, 2014 are first-priority mortgaged as collateral to secure the bank loan discussed in Note 11. No impairment loss was recorded for the period presented.

Vessels Under Construction
Vessels Under Construction

7. Vessels Under Construction

 

Vessels under construction is comprised of the following as of March 31, 2014:

 

Acquisition of two newbuilding contracts from Dorian Holdings on July 29, 2013 (refer Note 4)

 

17,593,130

 

Acquisition of one newbuilding contract from SeaDor on July 29,2013 (refer Note 3b)

 

7,009,675

 

Acquisition of thirteen newbuilding contracts from Scorpio November 26, 2013 (refer Note 3c)

 

119,386,040

 

Acquisition cost of vessel purchase options from Dorian Holdings and SeaDor exercised on February 21, 2014 (refer Notes 3b and 4)

 

7,134,126

 

Installment payments to shipyards

 

169,271,536

 

Other capitalized expenditures

 

1,839,689

 

Capitalized interest

 

972,010

 

Vessels under construction

 

323,206,206

 

 

The installment payments to the shipyards, totaling $169.3 million, represent scheduled payments made by the Company to the shipyards subsequent to the acquisition of the newbuilding contracts and payments relating to the option exercise of three newbuilding contracts. Other capitalized expenditures represent fees paid to our Manager of $1.1 million and to third party vendors of $0.7 million for supervision fees and other newbuilding pre-delivery costs including engineering and technical support, liaising with the shipyard, and ensuring key suppliers are integrated into the production planning process.

 

On February 21, 2014, pursuant to the option agreements with Hyundai Heavy Industries Co. Ltd., three newbuilding contracts were executed with a total contract price of $216.7 million (refer Notes 3b and 4).

Other Fixed Assets, Net
Other Fixed Assets, Net

8. Other Fixed Assets, Net

 

Other fixed assets of $60,904 as of March 31, 2014, represent leasehold improvements, software and furniture and fixtures at cost and had no accumulated depreciation as of March 31, 2014 as they had not yet been brought into use.

 

Deferred Charges, Net
Deferred Charges, Net

9. Deferred Charges, Net

 

Deferred charges of $2,555,674 as of March 31, 2014, represent deferred offering costs of $1,304,343 related to the Company’s planned initial public offering, deferred financing costs of $716,040 and deferred drydocking costs of $535,291.

 

The movement of deferred financing costs and drydocking costs is presented in the table below:

 

 

 

Financing
costs

 

Drydocking
costs

 

On inception , July 1, 2013

 

 

 

Additions

 

1,516,847

 

600,394

 

Amortization

 

(800,807

)

(65,103

)

Balance, March 31, 2014

 

716,040

 

535,291

 

 

The drydocking costs incurred during the period ended March 31, 2014 relate to the drydocking for Captain Nicholas ML which was drydocked during the period under review.

Accrued Expenses
Accrued Expenses

10. Accrued Expenses

 

Accrued expenses comprised of the following:

 

 

 

March 31,
2014

 

Accrued loan and swap interest

 

1,439,237

 

Accrued IPO charges

 

469,707

 

Accrued voyage and vessel operating expenses

 

87,029

 

Other

 

200,413

 

Total

 

2,196,386

 

Long-Term Debt
Long-Term Debt

11. Long-Term Debt

 

The table below presents the loans outstanding as of March 31, 2014:

 

 

Secured bank debt

 

 

 

Royal Bank of Scotland plc. (RBS)

 

 

 

Tranche A

 

44,200,000

 

Tranche B

 

33,241,000

 

Tranche C

 

51,277,500

 

Total

 

128,718,500

 

Presented as follows:

 

 

 

Current portion of long-term debt

 

9,612,000

 

Long-term debt—net of current portion

 

119,106,500

 

Total

 

128,718,500

 

 

The minimum annual principal payments, in accordance with the loan agreement, required to be made after March 31, 2014 are as follows:

 

 

Year ending March 31,:

 

 

 

2015

 

9,612,000

 

2016

 

9,612,000

 

2017

 

9,612,000

 

2018

 

9,612,000

 

2019

 

57,268,000

 

Thereafter

 

33,002,500

 

Total

 

128,718,500

 

 

As discussed in Note 1, the Company assumed the debt obligations associated with the financing of the vessels that were acquired through the acquisition of CMNL, CJNP and CNML. The prior loan arrangements associated with those vessels required approval from the lenders to sell the vessels and agreement from the lenders to transfer the borrowings to another party. As a consequence, the Company and the lender negotiated new borrowing terms in connection with this transaction. The new terms are described below. The total borrowings outstanding immediately prior to the debt modification and immediately after remained the same.

 

CMNL, CJNP, CNML and Corsair as joint and several borrowers (Borrowers), and Dorian LPG, Ltd as parent guarantor entered into a loan facility of $135,224,500, which replaced the prior borrowing arrangements of the Predecessor. The loan facility is divided into three tranches. Tranche A of $47.6 million, Tranche B of $34.5 million and Tranche C of up to $53.1 million and is associated with each of the Captain John NP, Captain Markos NL and the Captain Nicholas ML, respectively.

 

Tranche A is payable in twelve equal semi-annual installments each in the amount of $1,700,000 commencing on September 24, 2013 plus a balloon of $27,200,000 payable concurrently with the last installment on March 24, 2019.

 

Tranche B is payable in eleven equal semi-annual installments each in the amount of $1,278,500 commencing on November 17, 2013 plus a balloon of $20,456,000 payable concurrently with the last installment on November 17, 2018.

 

Tranche C is payable in fourteen equal semi-annual installments each in the amount of $1,827,500 commencing on January 21, 2014 plus a balloon of $27,520,000 payable concurrently with the last installment July 21, 2020.

 

The loan facility bears interest at LIBOR plus a margin of 1.5% per annum until the delivery of the vessel under construction contracted by Corsair (the “Corsair Vessel”) but no later than September 30, 2014 upon which date the margin will be 2.0%. The margin will be increased to 2.5% one year from the delivery of the Corsair Vessel until maturity.

 

The loan facility is secured by first priority mortgages on the vessels financed and first assignments of all freights, earnings and insurances. In addition the Borrowers were obliged to maintain $66,538,170 in a restricted cash account (the Newbuilding Cash Collateral) which is reduced on the date of the second, third and fourth pre-delivery shipyard installments for the Corsair vessel to $59,145,040, $51,751,910 and $44,358,780, respectively and on delivery of the Corsair vessel is reduced in full. The Corsair vessel will be mortgaged as security upon delivery. The restricted cash account can be reduced with the approval of the bank, if payments to the shipyard are accelerated in consideration of a reduction in the contract price, provided that it will not fall below $29,572,520 prior to delivery date. During October 2013, the Company made an accelerated payment of $28,418,740 to the shipyard in consideration of a reduction in the contract price and as a result the restricted cash account as of March 31, 2014 reduced to $30.9 million.

 

The loan facility also requires the Borrowers to maintain a minimum market adjusted security cover ratio equal to at least 125% of the aggregate of the outstanding loan balance and 50% of the related swap exposure up to September 2014 or 100% thereafter. In the event of non-compliance the Borrowers will be required within one month of being notified in writing by the lender to make such prepayment. In the event the lender agrees to release Corsair or another borrower approved by the lender from joint and several liabilities under the agreement, the minimum market adjusted security cover is adjusted to 175% and the margin will be increased to 2.75%.

 

The loan facility also contains customary covenants that require the Company to maintain adequate insurance coverage and to obtain the lender’s prior consent before changes are made to the flag, class or management of the vessels, or enter into a new line of business. The loan facility also requires that Dorian Holdings maintain a minimum ownership percentage. The loan facility includes customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, representation and warranty, a cross-default to other indebtedness and non-compliance with security documents, and prohibit the Borrowers from paying dividends. However, the loan facility permits the Borrowers to make expenditures to fund the administration and operation of Dorian LPG.

 

Debt Covenants: The secured loan agreement contains the following financial covenants which the Company is required to comply with, calculated on a consolidated basis, determined and defined according to the provisions of the loan agreement:

 

·         The ratio of cash flow from operations before interest and finance costs to cash debt service costs (Debt Service Coverage Ratio) shall not be less than 0.75:1 through December 31, 2013, 0.8:1 through December 31, 2014; and 1:1 at all times thereafter.

 

·         The Minimum Shareholders’ Funds as adjusted for any reduction in the vessel fair market value shall not be less than $85 million;

 

·         The ratio of Total Debt to Shareholders Funds shall not exceed 150% at all times;

 

·         Minimum cash of $10 million at the end of each quarter and $1.5 million per mortgaged vessel at all times.

 

The Company was in compliance with the financial covenants as of March 31, 2014.

Capital Structure
Capital Structure

12. Capital Structure

 

Under the articles of incorporation effective July 1, 2013, the Company’s authorized capital stock consists of 500,000,000 registered shares, par value $.01 per share, of which 450,00,000 are designated as common share and 50,000,000 shares are designated as preferred shares.

 

On July 29, 2013, the Company issued the following shares:

 

·         9,310,054 common shares on completion of its NPP, at NOK75.00 per share, equivalent to USD12.66 per share based on the exchange rate on July 29, 2013

 

·         4,667,135 common shares to Dorian Holdings (refer Note 4)

 

·         4,667,135 common shares to SeaDor Holdings LLC (refer Note 3)

 

The fair value of the shares issued to Dorian and SeaDor was determined by the Company to be NOK75 (or USD12.66) per share based on the issue price of the NPP.

 

On November 26, 2013, the Company issued the following shares:

 

·         16,081,081 common shares on completion of a second Private Placement in Norway (“NPP2”), at NOK92.50 per share, equivalent to USD15.16 per share based on the exchange rate on November 26, 2013

 

·         7,990,425 common shares to Scorpio Tankers Inc. (refer Note 3)

 

On February 12, 2014, the Company issued the following shares:

 

·         5,649,200 common shares on completion of a third Private Placement in Norway (“NPP3”), at NOK110.00 per share, equivalent to USD17.92 per share based on the exchange rate on February 12, 2014

 

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. Following the above mentioned private placements and share issuances and as of March 31, 2014, the Company’s eight board seats and common shares were held by Dorian Holdings (three board seats and 11.7% ownership), SeaDor Holdings (three board seats and 19.3% ownership), Scorpio Tankers Inc. (one board seat and 26.5% ownership), and affiliates of Kensico Capital Management (one board seat and 9.5% ownership). These parties retain the ability to exercise significant influence over our operations.

 

On April 23, 2014 the Company completed a one-for-five reverse stock split and reduced the number of the Company’s issued and outstanding common shares and affected all issued and outstanding common shares, outstanding immediately prior to the effectiveness of the reverse stock split. The number of the Company’s authorized common shares was not affected by the reverse split and the par value of our common shares remained unchanged at $0.01 per share. The reverse stock split reduced the number of the Company’s common shares outstanding at March 31, 2014 from 241,825,149 to 48,365,012 after the cancellation of 18 fractional shares. No fractional shares were issued in connection with the reverse stock split. Shareholders who otherwise held a fractional share of the Company’s common stock as a result of the reverse stock split received a cash payment in lieu of such fractional share. All amounts related to number of shares and per share amounts have been retroactively restated.

Revenues
Revenues

13. Revenues

 

Revenues comprise the following for the period July 1, 2013 to March 31, 2014:

 

Time charter revenue

 

17,602,137

 

Voyage charter revenue

 

11,210,785

 

Other revenue

 

820,778

 

Total

 

29,633,700

 

 

Included in time charter revenue is $6,122,695, representing the profit-sharing element of the time charter agreements. Other revenue represents demurrage income and income from charterers relating to reimbursement of expenses such as costs for security guards and war risk insurance.

Voyage Expenses
Voyage Expenses

14. Voyage Expenses

 

Voyage expenses are comprised as follows for the period July 1, 2013 to March 31, 2014:

 

Bunkers

 

5,271,126

 

Port charges and other related expenses

 

552,634

 

Brokers’ commissions

 

386,244

 

Security cost

 

298,820

 

War risk insurances

 

37,001

 

Other voyage expenses

 

125,146

 

Total voyage expenses

 

6,670,971

 

Vessel Operating Expenses
Vessel Operating Expenses

15. Vessel Operating Expenses

 

Vessel operating expenses are comprised as follows for the period July 1, 2013 to March 31, 2014:

 

Crew wages and related costs

 

5,306,441

 

Spares and stores

 

1,395,287

 

Lubricants

 

480,279

 

Insurance

 

566,021

 

Repairs and maintenance costs

 

502,424

 

Miscellaneous expenses

 

144,507

 

Total

 

8,394,959

 

Interest and Finance Costs
Interest and Finance Costs

16. Interest and Finance Costs

 

Interest and finance costs of $1,579,206 is comprised of interest incurred of $1,666,159, $800,807 of amortization of financing costs, and $84,250 of other finance costs less capitalized interest of $972,010 for the period July 1, 2013 to March 31, 2014.

 

Income Taxes
Income Taxes

17. Income Taxes

 

The Company and its 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. The Company is also subject to United States federal income taxation in respect of income that is derived from the international operation of ships and the performance of services directly related thereto attributable to the transport of cargo to or from the United States (“Shipping Income”), unless exempt from United States federal income taxation.

 

If the Company does not qualify for the exemption from tax under Section 883, of the Internal Revenue Code of 1986, as amended, the Company and its subsidiaries will be subject to a 4% tax on its “U.S. source shipping income,” imposed without the allowance for any deductions. For these purposes, “U.S. source shipping income” means 50% of the Shipping Income derived by the Company and its subsidiaries that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States.

 

We do not believe that we were able to qualify for exemption under Section 883 and as a consequence, our gross U.S. source shipping income for our first fiscal year ended March 31, 2014, derived from two vessel voyages transporting cargo from Houston to ports in Brazil is subject to a 4% gross basis tax (without allowance for deductions) equal to $39,266 and is included in Voyage expenses in the consolidated statement of operations.

 

Commitments and Contingencies
Commitments and Contingencies

18. Commitments and Contingencies

 

Commitments under Newbuilding Contracts

 

As of March 31, 2014, the Company had commitments under shipbuilding contracts for nineteen newbuildings. The Company expects to settle these commitments as follows:

 

Period ending March 31,:

 

 

 

2015

 

327,577,240

 

2016

 

829,551,691

 

Total

 

1,157,128,931

 

 

Other

 

From time to time the Company expects 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. The Company is not aware of any claim, which is reasonably possible and should be disclosed or probable and for which a provision should be established in the accompanying consolidated financial statements.

Derivative Instruments
Derivative Instruments

19. Derivative Instruments

 

The Company uses interest rate swaps for the management of interest rate risk exposure. The interest rate swaps effectively convert the Company’s debt from a floating to a fixed rate. To hedge its exposure to changes in interest rates the Company is a party to five floating-to-fixed interest rate swaps with RBS. The Company became a party to these transactions as part of the business combination with Dorian Holdings LLC whereby RBS novated the interest rate swap agreements such that the exact terms of the original agreement with the Predecessor were transferred to the corresponding entities that retain the interests in each of the vessels which are the main collateral. The principal terms of the interest rate swaps are as follows:

 

Subsidiary

 

Termination
Date

 

Fixed
interest rate

 

Nominal value
March 31,
2014

 

CMNL(1)

 

Nov 2018

 

5.395

%

20,456,000

 

CMNL(1)

 

Nov 2018

 

4.936

%

12,785,000

 

CJNP(2)

 

March 2019

 

4.772

%

33,067,125

 

CJNP(2)

 

March 2019

 

2.960

%

11,132,875

 

CNML(3)

 

July 2020

 

4.350

%

49,880,000

 

 

 

 

 

 

 

127,321,000

 

 

(1)                 reduces semi-annually by $1,278,500 with a final settlement of $21,734,500 due in November 2018.

 

(2)                 reduces semi-annually by $1,700,000 with a final settlement of $28,900,000 due in March 2019.

 

(3)                 RBS exercised its right to extend the interest rate swap until July 2020 and based on the extension reduces semi-annually by $1,720,000 with a final settlement of $27,520,000 due in July 2020.

 

Tabular disclosure of financial derivatives is as follows:

 

 

 

 

 

March 31, 2014

 

Derivatives not designated as hedging instruments

 

Balance sheet Location

 

Asset
derivatives

 

Liability
derivatives

 

Interest rate swap agreements

 

Long-term liabilities—Derivatives instruments

 

 

14,062,416

 

 

The effect of derivative instruments on the consolidated statement of operations for the period July 1, 2013 to March 31, 2014 is as follows:

 

Derivatives not designated as hedging instruments

 

Location of gain/(loss)
recognized

 

July 1, 2013 to
March 31, 2014

 

Interest Rate Swap—Change in fair value

 

Loss on derivatives—net

 

2,623,456

 

Interest Rate Swap—Realized loss

 

Loss on derivatives—net

 

(3,727,457

)

Loss on derivatives—net

 

 

 

(1,104,001

)

 

Financial Instruments
Financial Instruments

20. Financial Instruments

 

The principal financial assets of the Company consist of cash and cash equivalents, amounts due from related parties and trade accounts receivable. The principal financial liabilities of the Company consist of long-term bank loan, interest rate swaps, accounts payable, amounts due to related parties and accrued liabilities.

 

(a)           Interest rate risk:  The Company’s long-term bank loan is based on LIBOR and hence the Company is exposed to movements in LIBOR. The Company entered into interest rate swap agreements, discussed in Note 19, in order to hedge its variable interest rate exposure.

 

(b)           Fair value:  The carrying values of trade accounts receivable, amounts due from related parties, cash and cash equivalents, accounts payable, amounts due to related parties and accrued liabilities are reasonable estimates of their fair value due to the short-term nature of these financial instruments. The fair value of long-term bank loan approximates the recorded value, due to its variable interest rate, being the LIBOR. LIBOR rates are observable at commonly quoted intervals for the full terms of the loan and hence long-term bank loan is considered Level 2 item in accordance with the fair value hierarchy.

 

The interest rate swaps, discussed in Note 19, are stated at fair value. The fair value of the interest rate swaps 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 the Company would have to pay for the early termination of the agreements.

 

As of March 31, 2014, no fair value measurements for assets or liabilities under Level 1 or Level 3 were recognized in the Company’s consolidated balance sheets. The Company did not have any other assets or liabilities measured at fair value on a nonrecurring basis during the period July 1, 2013 to March 31, 2014.

 

Earnings Per Share
Earnings Per Share

21. Earnings Per Share

 

Basic earnings per share (“EPS”) was calculated by dividing the net income for the period attributable to the owners of the common shares by 32,075,897 shares being the weighted average number of common shares issued and outstanding during the period. Diluted earnings per share is the same as basic earnings per share as there are no other potentially dilutive shares.

 

Subsequent Events
Subsequent Events

22. Subsequent Events

 

On April 25, 2014, the Company completed a private placement of 1,412,698 common shares with a strategic investor at a price of NOK 110.00 or USD 18.40 based upon the exchange rate on April 24, 2014, which represents approximately $26.0 million in gross proceeds not including closing fees.

 

On May 13, 2014, the Company completed its initial public offering of 7,105,263 common shares on the New York Stock Exchange at a price of $19.00 per share, or $135.0 million in gross proceeds not including underwriting fees or closing costs.

 

On May 22, 2014, the Company completed the issuance of 245,521 common shares related to the overallotment exercise by the underwriters of the Company’s initial public offering at a price of $19.00 per share, or $4.7 million in gross proceeds not including underwriting fees or closing costs. Subsequent to this offering, the Company has 57,128,494 shares issued and outstanding.

 

On June 25, 2014, the Company completed the exchange offer of unregistered common shares that it previously issued in its prior equity private placements, other than the common shares owned by its affiliates, for 15,528,507 common shares that have been registered under the Securities Act of 1933, as amended, the complete terms and conditions of which were set forth in a prospectus dated May 8, 2014 and the related letter of transmittal.

 

On June 30, 2014, the Company granted 655,000 restricted stock awards to certain of its officers under the equity incentive plan that vest over 5 years.

 

On July 25, 2014, the Company took delivery of its first vessel under the VLGC Newbuilding Program, the Comet, from Hyundai Heavy Industries Co. Ltd.

Significant Accounting Policies (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 income 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):  The Company follows the accounting guidance relating to Comprehensive Income, which requires separate presentation of certain transactions that are recorded directly as components of stockholders’ equity. The Company has no other comprehensive income/(loss) and accordingly, comprehensive income/(loss) equals net income/(loss) for the period presented and thus has not presented this in the statement of operations or in a separate statement.

(d)     Foreign currency translation:  The functional currency of the Company 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 period presented, the Company had no foreign currency derivative instruments.

(e)     Cash and cash equivalents:  The Company considers 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)      Restricted cash:  Restricted cash represents pledged cash deposits or minimum liquidity to be maintained with certain banks under the Company’s borrowing arrangements. In the event that the obligation relating to such deposits is expected to be terminated within the next twelve months or relates to general minimum liquidity requirements with no obligation to retain such funds in retention accounts, these deposits are classified as current assets otherwise they are classified as non-current assets.

(g)     Trade receivables (net):  Trade receivables (net), 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 period presented was zero.

(h)     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 market. Cost is determined by the first in, first out method.

(i)      Vessels:  Vessels are stated at cost, less accumulated depreciation. 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. Interest costs incurred to finance the cost of vessels during their construction period are capitalized. Subsequent expenditures for conversions and major improvements 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.

(j)      Impairment of long-lived assets:  The Company reviews their 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.

(k)     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. Second hand vessels are depreciated from the date of their acquisition through their remaining estimated useful life.

(l)      Drydocking and special survey costs:  Drydocking and special survey 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 survey is scheduled to become due. We are required to drydock each of our vessels every five years until it reaches 15 years of age, after which we are required to drydock the applicable vessel every two and one-half years. 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.

(m)   Financing costs:  Financing fees 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 repaid or refinanced is expensed in the period the repayment or refinancing is made, 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 in Deferred charges in the accompanying consolidated balance sheet.

(n)     Revenues and expenses:  Revenue is recognized when an agreement exists, the vessel is made available to the charterer or services are provided, the charter hire is determinable and collection of the related revenue is reasonably assured.

 

Time charter revenue:  Time charter revenues are recorded ratably 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.

 

Voyage charter revenue:  Under a voyage charter, the revenues are recognized on a pro-rata basis over the duration of the voyage determined on a discharge—to discharge port basis but the Company does not begin recognizing revenue until a charter has been agreed to by the customer and the Company, even if the vessel has discharged its cargo and is sailing to the anticipated load port for its next voyage. 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. Dispatch expense represents payments by the Company 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 balance sheet.

 

Commissions:  Charter hire commissions to brokers or the Manager, if any, are deferred and amortized over the related charter period and are included in Voyage expenses.

 

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.

(o)     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.

(p)     Segment reporting:  Each of the Company’s vessels serve 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, the Company has determined that it operates in one reportable segment, the international transportation of liquid petroleum gas with its fleet of vessels. Furthermore, when the Company charters 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.

(q)     Derivative Instruments:  The Company enters into interest rate swap agreements to manage its exposure to fluctuations of interest rate risk associated with its borrowings. All derivatives are recognized in the consolidated financial statements 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. When such derivatives do not qualify for hedge accounting, the Company recognizes their fair value changes 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 offset against the fair value of assets, liabilities or firm commitments through income, or recognized in other comprehensive income/(loss) (effective portion) until the hedged item is recognized in the consolidated statements of income. For the periods presented, no derivatives were accounted for as accounting hedges.

(r)      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.

(s)      Recent accounting pronouncements:  On May 28, 2014, the FASB issued ASU 2014-09, Revenue From Contracts With Customers, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This standard is effective for public entities with reporting periods beginning after December 15, 2016. Early adoption is not permitted. The Company has not yet evaluated the impact, if any, of the adoption of this new standard.

Basis of Presentation and General Information (Tables)

Vessel Owning Subsidiaries

 

Subsidiary

 

Acquisition
Date

 

Type of
vessel(2)

 

Vessel’s name

 

Built

 

CBM(1)

 

CNML LPG Transport LLC

 

July 29, 2013

 

VLGC

 

Captain Nicholas ML

 

2008

 

82,000

 

CJNP LPG Transport LLC

 

July 29, 2013

 

VLGC

 

Captain John NP

 

2007

 

82,000

 

CMNL LPG Transport LLC

 

July 29, 2013

 

VLGC

 

Captain Markos NL

 

2006

 

82,000

 

Grendon Tanker LLC

 

July 29, 2013

 

PGC

 

LPG Grendon

 

1996

 

5,000

 

 

Newbuild Vessel Owning Subsidiaries

 

Subsidiary (Vessel’s Name)

 

Acquisition
Date

 

Type of
vessel(2)

 

Hull
number

 

Estimated
vessel
delivery date

 

CBM(1)

 

SeaCor LPG I LLC (Comet)

 

July 29, 2013

 

VLGC

 

2656

 

July 2014

 

84,000

 

SeaCor LPG II LLC (Corsair)

 

July 29, 2013

 

VLGC

 

2657

 

September 2014

 

84,000

 

Corvette LPG Transport LLC

 

July 29, 2013

 

VLGC

 

2658

 

December 2014

 

84,000

 

Dorian Shanghai LPG Transport LLC (Cougar)

 

November 26, 2013

 

VLGC

 

S749

 

April 2015

 

84,000

 

Dorian Houston LPG Transport LLC (Cobra)

 

November 26, 2013

 

VLGC

 

S750

 

April 2015

 

84,000

 

Dorian Sao Paulo LPG Transport LLC (Continental)

 

November 26, 2013

 

VLGC

 

S753

 

June 2015

 

84,000

 

Dorian Ulsan LPG Transport LLC (Constitution)

 

November 26, 2013

 

VLGC

 

S755

 

June 2015

 

84,000

 

Concorde LPG Transport LLC

 

February 12, 2014

 

VLGC

 

2660

 

June 2015

 

84,000

 

Dorian Amsterdam LPG Transport LLC (Commodore)

 

November 26, 2013

 

VLGC

 

S751

 

July 2015

 

84,000

 

Dorian Dubai LPG Transport LLC (Cresques)

 

November 26, 2013

 

VLGC

 

2336

 

August 2015

 

84,000

 

Dorian Monaco LPG Transport LLC (Cheyenne)

 

November 26, 2013

 

VLGC

 

S756

 

September 2015

 

84,000

 

Constellation LPG Transport LLC

 

February 12, 2014

 

VLGC

 

2661

 

September 2015

 

84,000

 

Dorian Geneva LPG Transport LLC (Cratis)

 

November 26, 2013

 

VLGC

 

2337

 

October 2015

 

84,000

 

Dorian Barcelona LPG Transport LLC (Clermont)

 

November 26, 2013

 

VLGC

 

S752

 

September 2015

 

84,000

 

Dorian Cape Town LPG Transport LLC (Chaparral)

 

November 26, 2013

 

VLGC

 

S754

 

October 2015

 

84,000

 

Dorian Tokyo LPG Transport LLC (Copernicus)

 

November 26, 2013

 

VLGC

 

2338

 

November 2015

 

84,000

 

Commander LPG Transport LLC

 

February 12, 2014

 

VLGC

 

2662

 

November 2015

 

84,000

 

Dorian Explorer LPG Transport LLC (Challenger)

 

November 26, 2013

 

VLGC

 

S757

 

December 2015

 

84,000

 

Dorian Exporter LPG Transport LLC (Caravel)

 

November 26, 2013

 

VLGC

 

S758

 

January 2016

 

84,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Dormant Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsidiary

 

Incorporation
Date

 

 

 

 

 

 

 

 

 

Capricorn LPG Transport LLC

 

November 15, 2013

 

 

 

 

 

 

 

 

 

Comet LPG Transport LLC

 

November 11, 2013

 

 

 

 

 

 

 

 

 

Constitution LPG Transport LLC

 

February 17, 2014

 

 

 

 

 

 

 

 

 

Corsair LPG Transport LLC

 

June 24, 2013

 

 

 

 

 

 

 

 

 

 

(1)                 CBM: Cubic meters, a standard measure for LPG tanker capacity.

 

(2)                 Very Large Gas Carrier (“VLGC”), Pressurized Gas Carrier (“PGC”)

 

 

Charterer

 

% of revenue

 

Statoil ASA

 

51

 

Naftomar Shipping and Trading Co. Ltd

 

13

 

Kuwait Petroleum Corporation

 

10

 

Acquisition of Business (Tables)

Fair value of total consideration

 

 

 

Acquisition
from Dorian
Holdings

 

Grendon
acquisition

 

Total

 

Cash

 

9,732,911

 

6,672,485

 

16,405,396

 

Equity instruments (4,667,135 common shares of the Company at NOK 75.00 per share)

 

59,092,499

 

 

59,092,499

 

Total consideration

 

68,825,410

 

6,672,485

 

75,497,895

 

Fair value of identifiable assets and liabilities acquired:

 

 

 

 

 

 

 

Cash

 

2,672,500

 

 

2,672,500

 

Vessels

 

194,457,529

 

6,625,000

 

201,082,529

 

Inventories on board the vessels

 

1,407,622

 

47,485

 

1,455,107

 

Newbuilding vessels contracted for construction

 

17,593,130

 

 

17,593,130

 

Other assets—Vessel purchase options

 

4,605,000

 

 

4,605,000

 

Long term bank debt

 

(135,224,500

)

 

(135,224,500

)

Interest rate swaps

 

(16,685,871

)

 

(16,685,871

)

Net assets acquired—fair value

 

68,825,410

 

6,672,485

 

75,497,895

 

 

$ in 000’s

 

For the year ended
March 31, 2014

 

For the year ended
March 31, 2013

 

Net revenues

 

$

45,017

 

$

38,662

 

Net income/ (loss)

 

$

6,613

 

$

(6,639

)

Inventories (Tables)
Schedule of inventories by type

 

 

March 31, 2014

 

Bunkers

 

596,768

 

Lubricants

 

358,381

 

Victualing

 

83,840

 

Bonded stores

 

15,354

 

Communication cards

 

3,986

 

Total

 

1,058,329

 

Vessels, Net (Tables)
Schedule of vessels, net

 

 

Vessel cost

 

Accumulated
depreciation

 

Net book Value

 

Balance, July 1, 2013

 

 

 

 

Vessel acquisitions through business combinations (Refer Note 4)

 

201,082,529

 

 

201,082,529

 

Other

 

307,606

 

 

307,606

 

Depreciation

 

 

(6,555,269

)

(6,555,269

)

Balance, March 31, 2014

 

201,390,135

 

(6,555,269

)

194,834,866

 

Vessels Under Construction (Tables)
Schedule of vessels under construction

Acquisition of two newbuilding contracts from Dorian Holdings on July 29, 2013 (refer Note 4)

 

17,593,130

 

Acquisition of one newbuilding contract from SeaDor on July 29,2013 (refer Note 3b)

 

7,009,675

 

Acquisition of thirteen newbuilding contracts from Scorpio November 26, 2013 (refer Note 3c)

 

119,386,040

 

Option exercise of three newbuilding contracts from Dorian Holdings and SeaDor on February 21, 2014 (refer Notes 3b and 4)

 

7,134,126

 

Installment payments to shipyards

 

169,271,536

 

Other capitalized expenditures

 

1,839,689

 

Capitalized interest

 

972,010

 

Vessels under construction

 

323,206,206

 

Deferred Charges, Net (Tables)
Schedule of movement of deferred financing costs and drydocking costs

 

 

Financing
costs

 

Drydocking
costs

 

On inception , July 1, 2013

 

 

 

Additions

 

1,516,847

 

600,394

 

Amortization

 

(800,807

)

(65,103

)

Balance, March 31, 2014

 

716,040

 

535,291

 

Accrued Expenses (Tables)
Schedule of accrued expenses

 

 

March 31,
2014

 

Accrued loan and swap interest

 

1,439,237

 

Accrued IPO charges

 

469,707

 

Accrued voyage and vessel operating expenses

 

87,029

 

Other

 

200,413

 

Total

 

2,196,386

 

Long-Term Debt (Tables)

Secured bank debt

 

 

 

Royal Bank of Scotland plc. (RBS)

 

 

 

Tranche A

 

44,200,000

 

Tranche B

 

33,241,000

 

Tranche C

 

51,277,500

 

Total

 

128,718,500

 

Presented as follows:

 

 

 

Current portion of long-term debt

 

9,612,000

 

Long-term debt—net of current portion

 

119,106,500

 

Total

 

128,718,500

 

Year ending March 31,:

 

 

 

2015

 

9,612,000

 

2016

 

9,612,000

 

2017

 

9,612,000

 

2018

 

9,612,000

 

2019

 

57,268,000

 

Thereafter

 

33,002,500

 

Total

 

128,718,500

 

Revenues (Tables)
Schedule of revenues

Time charter revenue

 

17,602,137

 

Voyage charter revenue

 

11,210,785

 

Other revenue

 

820,778

 

Total

 

29,633,700

 

Voyage Expenses (Tables)
Schedule of voyage expenses

Bunkers

 

5,271,126

 

Port charges and other related expenses

 

552,634

 

Brokers’ commissions

 

386,244

 

Security cost

 

298,820

 

War risk insurances

 

37,001

 

Other voyage expenses

 

125,146

 

Total voyage expenses

 

6,670,971

 

Vessel Operating Expenses (Table)
Schedule of vessel operating expenses

Crew wages and related costs

 

5,306,441

 

Spares and stores

 

1,395,287

 

Lubricants

 

480,279

 

Insurance

 

566,021

 

Repairs and maintenance costs

 

502,424

 

Miscellaneous expenses

 

144,507

 

Total

 

8,394,959

 

Commitments and Contingencies (Tables)
Schedule of commitments under newbuilding contracts

 

 

Period ending March 31,:

 

 

 

2015

 

327,577,240

 

2016

 

829,551,691

 

Total

 

1,157,128,931

 

 

Derivative Instruments (Tables)

 

 

Subsidiary

 

Termination
Date

 

Fixed
interest rate

 

Nominal value
March 31,
2014

 

CMNL(1)

 

Nov 2018

 

5.395

%

20,456,000

 

CMNL(1)

 

Nov 2018

 

4.936

%

12,785,000

 

CJNP(2)

 

March 2019

 

4.772

%

33,067,125

 

CJNP(2)

 

March 2019

 

2.960

%

11,132,875

 

CNML(3)

 

July 2020

 

4.350

%

49,880,000

 

 

 

 

 

 

 

127,321,000

 

 

(1)                 reduces semi-annually by $1,278,500 with a final settlement of $21,734,500 due in November 2018.

 

(2)                 reduces semi-annually by $1,700,000 with a final settlement of $28,900,000 due in March 2019.

 

(3)                 RBS exercised its right to extend the interest rate swap until July 2020 and based on the extension reduces semi-annually by $1,720,000 with a final settlement of $27,520,000 due in July 2020.

 

 

 

 

 

 

 

March 31, 2014

 

Derivatives not designated as hedging instruments

 

Balance sheet Location

 

Asset
derivatives

 

Liability
derivatives

 

Interest rate swap agreements

 

Long-term liabilities—Derivatives instruments

 

 

14,062,416

 

 

 

 

Derivatives not designated as hedging instruments

 

Location of gain/(loss)
recognized

 

July 1, 2013 to
March 31, 2014

 

Interest Rate Swap—Change in fair value

 

Loss on derivatives—net

 

2,623,456

 

Interest Rate Swap—Realized loss

 

Loss on derivatives—net

 

(3,727,457

)

Loss on derivatives—net

 

 

 

(1,104,001

)

 

Basis of Presentation and General Information (Details)
9 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Mar. 31, 2014
item
Mar. 31, 2014
Dorian Holdings
Jul. 29, 2013
Mr. John Hadjipateras
Mar. 31, 2014
SeaDor
Jul. 29, 2013
SeaDor
Jul. 29, 2013
Institutional investors and high net worth investors
Jul. 29, 2013
Business combination
USD ($)
Jul. 29, 2013
Business combination
Dorian Holdings
USD ($)
item
Jul. 29, 2013
Business combination
Dorian Holdings
CNML
Jul. 29, 2013
Business combination
Dorian Holdings
CJNP
Jul. 29, 2013
Business combination
Dorian Holdings
CMNL
Jul. 29, 2013
Business combination
Dorian Holdings
Other subsidiaries
USD ($)
item
Jul. 29, 2013
Business combination
Dorian Holdings
Other subsidiaries
Jul. 29, 2013
Business combination
Affiliates of Dorian Holdings
Grendon Tanker LLC
USD ($)
Jul. 29, 2013
Business combination
Affiliates of Dorian Holdings
Grendon Tanker LLC
Jul. 29, 2013
Asset acquisition
SeaDor
SeaCor LPG I LLC
USD ($)
item
Jul. 29, 2013
Asset acquisition
SeaDor
SeaCor LPG I LLC
USD ($)
Jul. 29, 2013
Asset acquisition
SeaDor
SeaCor LPG I LLC
NOK
Apr. 25, 2014
Common stock
Feb. 12, 2014
Common stock
Nov. 26, 2013
Common stock
Jul. 29, 2013
Common stock
Jul. 1, 2013
Common stock
Mar. 31, 2014
Common stock
Jul. 29, 2013
Common stock
Dorian Holdings
Jul. 1, 2013
Common stock
Dorian Holdings
Jul. 29, 2013
Common stock
Dorian Holdings
USD ($)
Jul. 29, 2013
Common stock
Dorian Holdings
NOK
Jul. 29, 2013
Common stock
SeaDor
Jul. 29, 2013
Common stock
SeaDor
USD ($)
Jul. 29, 2013
Common stock
SeaDor
NOK
Jul. 29, 2013
Common stock
Business combination
Dorian Holdings
Jul. 29, 2013
Common stock
Asset acquisition
SeaDor
SeaCor LPG I LLC
Feb. 12, 2014
Common stock
Private placement
USD ($)
Feb. 12, 2014
Common stock
Private placement
NOK
Nov. 26, 2013
Common stock
Private placement
USD ($)
Nov. 26, 2013
Common stock
Private placement
NOK
Jul. 29, 2013
Common stock
Private placement
USD ($)
Jul. 29, 2013
Common stock
Private placement
USD ($)
Jul. 29, 2013
Common stock
Private placement
NOK
Basis of presentation and general information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reverse stock split
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,649,200 
24,071,506 
18,644,324 
100 
 
4,667,135 
100 
 
 
4,667,135 
 
 
 
 
5,649,200 
5,649,200 
16,081,081 
16,081,081 
9,310,054 
 
 
Value of common stock (per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 12.66 
 75.00 
 
 
 
 
 
 
 
 
$ 12.66 
 75.00 
 
$ 12.66 
 75.00 
 
 
$ 17.92 
 110.00 
$ 15.16 
 92.50 
 
$ 12.66 
 75.00 
Gross proceeds received
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 117,900,000 
 
 
Number of shares acquired in exchange of common stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,667,135 
4,667,135 
 
 
 
 
 
 
 
Cash consideration
 
 
 
 
 
 
16,405,396 
9,732,911 
 
 
 
 
 
6,625,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-stock consideration
 
 
 
 
 
 
75,497,895 
68,825,410 
 
 
 
 
 
6,672,485