Avance Gas Achieves Major Milestone with MGC Fleet Sale
Avance Gas Holding Ltd (OSE: AGAS) has made headlines with the recent successful closing of the sale of its Medium Sized Gas Carrier (MGC) fleet to subsidiaries of Exmar LPG B.V. This significant deal, valued at $282.4 million, marks a pivotal moment for the company, reflecting its strategic focus on optimizing operations and shareholder value.
This transaction aligns with the company’s ongoing efforts to bolster its financial position and streamline its fleet management process. The completion of the deal was contingent upon the issuance of new refund guarantees, which was effectively resolved. Consequently, Avance Gas has successfully secured a reimbursement of $62.1 million pertaining to yard installations from an escrow account.
Financial Implications of the Successful Sale
This profitable venture is expected to yield an approximate gain of $34 million for Avance Gas, demonstrating the company’s adeptness in navigating the market. The release of about $96 million in cash is anticipated, of which $62.1 million has already been received, leaving a remaining payment of $34.2 million scheduled for April, coinciding with the cutting of steel for the final MGC newbuilding. These developments are vital for the company’s ongoing financial strategy and future initiatives.
Extraordinary Dividend Proposal
In light of this successful transaction, Avance Gas declared an extraordinary dividend of $0.75 per share. This comes in the wake of the company’s significant cash flow improvements and is a testament to its commitment to rewarding shareholders. When combined with the dividend from the fourth quarter, shareholders will see a total dividend distribution of $6.00 per share. This distribution comprises a cash dividend of $2.75 and a value of $3.25 from BW LPG shares, reflecting the robust market performance and value realization.
Future Outlook for Avance Gas
Following the dividend payout, Avance Gas anticipates maintaining a pro-forma cash balance of around $56 million. The company aims to utilize these funds for a final dividend distribution of approximately $0.70 per share before executing a planned liquidation process. This move indicates a clear strategy, allowing Avance Gas to wind down operations while maximizing shareholder returns.
Leadership Insights
Øystein Kalleklev, the Chief Executive Officer of Avance Gas, expressed his enthusiasm regarding the sale, stating, “We are pleased to announce the closing of the sale of the MGC fleet to Exmar. It’s been a pleasure working together with Exmar closing this deal in an orderly fashion.” He emphasized that while parting with the fleet is bittersweet, the transactions made over the past few years, including the sale of 20 ships for approximately $1.7 billion, have been strategically sound.
Kalleklev remarked on the overall benefit for shareholders, who have seen substantial returns over the last three years, amounting to $1.25 billion in declared dividends. This success story underlines the company's focus on creating value for investors through strategic asset sales and disciplined financial management.
Conclusion
Avance Gas Holding Ltd’s recent activities underscore its proactive approach in adapting to market dynamics and ensuring tangible returns for its shareholders. As the company finalizes its plans for the future, including winding down operations, it remains committed to maximizing value and ensuring a smooth transition for its stakeholders. With effective management and strategic foresight, Avance Gas is poised for a promising conclusion to its operational endeavors.
Frequently Asked Questions
What is the recent news about Avance Gas Holding Ltd?
The company has successfully completed the sale of its Medium Sized Gas Carrier fleet for $282.4 million and declared an extraordinary dividend of $0.75 per share.
How much profit is Avance Gas expected to make from the fleet sale?
Avance Gas anticipates a profit of approximately $34 million from the sale of the MGCs.
What dividend has Avance Gas declared?
Avance Gas has declared an extraordinary dividend of $0.75 per share, adding to a total dividend payment of $6.00 for the fourth quarter.
What is Avance Gas's strategy post-dividend payment?
The company plans to maintain a pro-forma cash balance of around $56 million, with intentions to distribute an additional final dividend before liquidation.
Who can I contact for more information about Avance Gas?
For media inquiries, you can reach out to Øystein Kalleklev, CEO, at +47 23 11 40 00.
