Mars Capital in talks for stake in BW LPG India

British mortgage company Mars Capital Finance Ltd is said to be in advanced talks with BW LPG Ltd to invest about $50 million for a minority stake in its Indian subsidiary BW LPG India Pvt Ltd, multiple sources said.

Oslo Stock Exchange listed, and Singapore-headquartered BW LPG is the world’s top owner and operator of liquefied petroleum gas (LPG) vessels, owning and operating Very Large Gas Carriers (VLGC) with a total carrying capacity of over 3 million cubic metres (CBM).

Chennai-based BW LPG India Pvt Ltd is the largest owner and operator of India-flagged VLGCs with a fleet of seven ships and one more being inducted by the second quarter of calendar year 2022.

Four of the eight VLGCs of BW LPG India were recently acquired from its parent BW LPG Ltd for an undisclosed amount.

Likely to invest

While announcing the sale of the four VLGCs to its Indian unit on December 8, BW LPG said that was in “advanced discussions with an investor for the acquisition of a minority stake in BW LPG India for a cash consideration of approximately $50 million”. It did not disclose the name of the investor.

Banking and shipping industry sources revealed that Glasgow-based Mars Capital Finance is the likely investor in BW LPG India.

“We are unable to provide further comment beyond what has been detailed in our press release (issued on 8 December),” a spokesperson for BW LPG said.

Mars Capital is a part of United Kingdom-based investor and asset manager Arrow Global Ltd which was acquired by British private equity firm TDR Capital LLP in October this year.

BW LPG India started out in 2017 as an equal joint venture between BW LPG and Global United India Shipping Pvt Ltd, a part of Singapore-based ship management company Synergy Group, founded by Captain Rajesh Unni.

In August this year, BW LPG Ltd said it took control of the three-year old Indian joint venture by raising its stake to 88 per cent from the previous 50 per cent.

The entire VLGC fleet of BW LPG India is technically managed by the Synergy Group.

India has overtaken Japan to become the second-largest importer of LPG in the world, spurring huge demand for LPG carriers to ship the cargo.

Some 23 LPG carriers are currently on charter by state-run oil firms for shipping LPG cargo into India, of which 15 are Indian flagged ships with BW LPG India accounting for seven of them.

Besides, there are spot cargoes every month, said an official.

On July 14, the Union Cabinet approved a subsidy scheme wherein Indian fleet owners will get a 10-15 per cent extra on charter rates, depending on age slabs, on ships registered in India after February 1 this year.

The government has budgeted a corpus of ₹1,624 crore to be disbursed as subsidy for moving crude oil, LPG, coal and fertiliser cargo for state-run firms, over five years.