Avance Gas Holding Ltd., a leading transporter of liquefied natural gas (LPG), has agreed to sell its fleet of very large gas carriers (VLGCs) to BW LPG Ltd for $1.05 billion. The VLGC fleet consists of eight eco-VLGCs built in 2015 and four dual-fuel VLGCs to be built in 2022 and 2023. The sale will be governed by 10 individual Memorandum of Agreements (MoAs) and existing debt obligations for two VLGCs will be renewed with Sale Leaseback (SLB) agreements.
Delivery of the vessels to BW LPG is set between September 15 and December 31, 2024, allowing Avance Gas to trade the vessels further in the winter market. The estimated carrying value of the fleet is $730 million to $740 million with an expected gain on sale of $310 million to $320 million. The sale will be settled for $585 million in cash, $132 million in debt novation, and 19.282 million shares of BW LPG valued at $333 million.
Upon completion, Avance Gas will retain four medium-sized gas carriers (MGCs) and a 12.77% stake in BW LPG, becoming the second largest shareholder. CEO Øystein Kalleklev stated that the sale will generate profits of approximately $315 million, ensuring significant dividends for shareholders. The transaction, subject to various approvals, aims to capitalize on high second-hand prices and optimize shareholder benefits.
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