Avance Gas Holding Ltd: Closing the BW LPG transaction with final VLGC delivery

Avance Gas

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Kaufen / Verkaufen

Hamilton, Bermuda. December 31, 2024

Avance Gas Holding Ltd ("Avance Gas" or "Company") (OSE: AGAS) refers to the announcement on August 15, 2024, regarding the sale of its VLGC fleet, consisting of twelve vessels, to BW LPG Ltd ("BW LPG" or "Buyer") for $1,050 million.

Today, the Company completed the last delivery with the twelfth and final vessel, the 2023-built dual-fuel VLGC, Avance Avior, delivered to BW LPG prior year-end as agreed. In connection with delivery of Avance Avior, 2.141 million shares in BW LPG were issued by the Buyer to Avance Gas. Avance Gas now holds 19,282,000 shares in BW LPG and is thus the second largest owner. This brings the total ownership share to 12.1% of total issued shares in BW LPG and 12.7% ownership adjusted for BW LPG’s treasury shares. Avance Gas plans to distribute the shares to shareholders after the 40-day lock-up period has ended in February 2025. Further details will be provided in conjunction with our fourth-quarter results announcement in February 2025.

Additionally, in relation to the delivery today, the Company also received net cash proceeds of approximately $30 million after repayment of outstanding debt. Total net cash proceeds from the sale of all the twelve VLGCs amounts to approximately $240 million. Further, the total book gain after completion of the sale, based on a BW LPG NAV of $17.25 per share, was previously estimated at $315 million, with $10 million attributed to depreciation savings. For accounting purposes, the BW LPG shares will be measured at fair market value based on the share price of $16.18 per share on the announcement date, August 15, 2024. Additionally, the VLGC fleet was reclassified from 'Property, Plant & Equipment' to 'Assets Held for Sale,' causing depreciation to stop as of the announcement date. As a result, a book gain of approximately $287 million from the sale will be recognized in the fourth quarter, along with approximately $12 million in reduced depreciation expense based on current vessel itineraries. Of this depreciation saving, $5 million has already been recorded in the third quarter. The BW LPG shares will subsequently be measured at fair market value, with any changes recognized through profit and loss as finance gains or losses.

Øystein Kalleklev, Chief Executive Officer of Avance Gas Holding Ltd, commented:

"Today we are closing of the sale of our VLGC fleet to BW LPG with the final VLGC, Avance Avior, delivered to BW LPG in South Korea following her discharge. We are very satisfied with the efficient and smooth handover process to BW LPG, and we wish both the ships, it’s crew and their new owner Goodspeed. With the closure of the transaction, we have become a substantial owner in BW LPG and as communicated in the past, the lock up of these shares expires in February which coincides with our fourth quarter result presentation where we intend to distribute these shares to our Avance Gas shareholders. In general, Avance Gas shareholders can expect that they will receive one BW LPG shares for every four Avance Gas share they hold.

Additionally, we have collected quite a lot of cash from the sale despite the $268 million dividend paid on December 23, 2024. Furthermore, we are also in the final stages of agreeing the new refund guarantees for the sale of our MGC newbuilds. This is the final pending item for closing of the transaction and we do expect this to occur prior to our fourth quarter results in February which means all assets will then be sold. As stated in the past, the Company plans to distribute all cash as well as the BW LPG shares to its shareholder prior to winding up. As preparation for this, we have called a Special General Meeting on February 5, 2025, for approval of a capital reduction. We wish all Avance Gas shareholder’s another prosperous 2025!”

For further queries, please contact:

Media contact: Øystein Kalleklev, CEO, Tel: +47 23 11 40 00

Investor and Analyst contact: Randi Navdal Bekkelund, CFO, Tel: +47 23 11 40 00

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act