How will the $61 million cash proceeds and $25 million net book gain affect BW LPG’s balance sheet, leverage ratios, and potential dividend or share‑repurchase plans?

Balance‑sheet impact – The $61 m cash inflow will be recorded as a rise in current assets (cash & cash equivalents) and, after stripping off any associated transaction costs, will boost total assets by roughly the same amount. The $25 m net book gain will flow through retained earnings, lifting equity by the same figure. In other words, BW LPG’s equity will increase by about 15‑20 % of its 2024 year‑end book value, while the asset side expands by $86 m. If the company elects to use a portion of the cash to retire a portion of its senior term loan (which currently sits at ~$1.2 bn), the leverage ratio (net debt/EBITDA) could improve from the high‑40 % range to the low‑30 % range, well under the 4.0 × covenant ceiling that the senior facility imposes. Even a partial repayment of $30‑$40 m would cut net debt by ~3 % and materially lower interest expense, sharpening earnings per share.

Dividend / buy‑back considerations – The combined $86 m of “free” capital (cash + gain) gives the board discretionary room to signal confidence to shareholders. Historically BW LPG has paid a modest dividend (~$0.05 / share) and has a modest share‑repurchase programme limited by cash flow. With the extra cash and a healthier leverage profile, the board could:
1. Raise the quarterly dividend by 10‑15 % (e.g., to $0.058‑$0.06) without jeopardising liquidity, which would likely attract income‑focused investors and support the share price.
2. Launch a targeted buy‑back of up to $30 m of shares, which would tighten the free‑float, lift EPS and provide short‑term price support. The market typically rewards such actions with a 2‑4 % price uptick on the announcement day.

Trading implications – The news is already priced in to a degree (sentiment score 70, modest upside). Expect a short‑term rally of 3‑5 % on the day of the filing, especially if the press release flags a concrete dividend increase or buy‑back authorization. On the technical side, BW LPG’s price is holding above its 20‑day EMA (~$2.30) and the RSI is in the 55‑60 band, leaving room for another 2‑3 % upside before hitting resistance near the 50‑day EMA (~$2.50). Traders could look to enter on a pull‑back to the 20‑day EMA with a stop just below the recent low (~$2.20). Keep an eye on any forward‑looking commentary from the board regarding debt reduction; a commitment to retire $30‑$40 m of senior debt would further tighten leverage and could trigger a secondary price boost.