Avance Gas Holding Ltd Wraps Up Its VLGC Fleet Transaction
Avance Gas Holding Ltd, often referred to as Avance Gas, recently marked a significant milestone in its business journey by completing the sale of its fleet of Very Large Gas Carriers (VLGC) to BW LPG Ltd. The deal, which was valued at approximately $1,050 million, involved a total of twelve VLGCs. The final vessel in this fleet, the Avance Avior, was delivered as scheduled, successfully concluding this major transaction.
Details of the Transaction
The recent delivery of Avance Avior to BW LPG was an important step in Avance Gas's strategic plan. With this transaction, Avance Gas not only offloads its fleet but also sees a considerable financial outcome. The deal has allowed the company to receive approximately $30 million in net cash after accounting for any outstanding debts, bringing the total cash received from the entire fleet sale to around $240 million. This reflects the company's efficient management and foresight in capitalizing on current market conditions.
Shareholding Impact
As part of the deal, Avance Gas acquired 2.141 million shares from BW LPG, increasing its ownership to a total of 19,282,000 shares. This stake signifies a 12.1% share in BW LPG, positioning Avance Gas as the second-largest shareholder in the company. Shareholders can look forward to receiving these shares as the company plans to distribute them after the lock-up period concludes in the early months of 2025.
Financial Performance and Projections
The financial benefits from the sale are notable, especially with an expected book gain of approximately $287 million in the fourth quarter. This gain is attributable not just to the sale itself, but also to strategic financial management including reduced depreciation expenses. The BW LPG shares will be evaluated at fair market value, influencing the company’s financial performance in the immediate future. These efforts are indicative of Avance Gas's commitment to optimizing shareholder value amidst changing market dynamics.
Future Strategic Directions
CEO Øystein Kalleklev has expressed satisfaction with the transition process to BW LPG, highlighting a smooth handover of assets. Avance Gas is focused on maximizing shareholder returns, with specific plans for capital reduction set for approval in a Special General Meeting scheduled for February. This meeting is vital as it anticipates a comprehensive distribution of cash and BW LPG shares to shareholders before finalizing the winding-up process.
Upcoming Opportunities for Shareholders
Looking ahead, Avance Gas is poised for potential growth as it explores new opportunities following the sale. The company is also nearing the conclusion of negotiations regarding refund guarantees related to its new MGC newbuilds. Completing these agreements would mark a significant step forward, as all assets will then be divested. This proactive approach underscores Avance Gas's commitment to fostering shareholder value and driving future growth.
Investor Relations and Communication
Avance Gas encourages shareholder inquiries and welcomes ongoing communication regarding its strategic direction. For any further questions, stakeholders can directly contact Øystein Kalleklev, the Chief Executive Officer at +47 23 11 40 00, or Randi Navdal Bekkelund, the Chief Financial Officer, using the same number for investor-related matters.
Frequently Asked Questions
What was the total value of the VLGC fleet sale?
The VLGC fleet was sold for a total value of approximately $1,050 million.
How many vessels did Avance Gas sell to BW LPG?
Avance Gas sold a total of twelve vessels to BW LPG.
What percentage of BW LPG shares does Avance Gas hold now?
Avance Gas now holds a 12.1% share in BW LPG, making it the second-largest shareholder.
When will Avance Gas distribute the BW LPG shares to its shareholders?
The company plans to distribute the shares after the lock-up period ends in February 2025.
How much cash did Avance Gas receive from the fleet sale?
Avance Gas received approximately $240 million in total net cash proceeds from the sale of the fleet.
