Avance Gas Holding has announced the successful sale and delivery of its first Very Large Gas Carrier (VLGC), the Chinook, to BW LPG Ltd. This transaction is part of a larger deal, initially announced on August 15, 2024, to sell Avance Gas's VLGC fleet for $1.05 billion. The sale includes approximately $585 million in cash, novation of about $132 million in debt, and 19.282 million shares in BW LPG valued at approximately $333 million.
As part of this deal, Avance Gas received 1.35 million shares in BW LPG, representing a 1% ownership stake. Once the transaction is finalized, Avance Gas will hold about 12.8% of BW LPG, making it the second-largest shareholder. The shares will have a 40-day lock-up period but are otherwise fully ordinary shares.
The company expects to receive net cash proceeds of $18.5 million from the Chinook delivery, which is currently under a variable Time Charter with an energy major expiring in mid-2025. This charter has been successfully novated to BW LPG.
Avance Gas plans to deliver the remaining 11 vessels in the fleet by year-end, with eight expected in November and three in December. The company will continue to issue press releases regarding the remaining deliveries and will provide more information on its third-quarter results, scheduled for November 27, 2024.
CEO Øystein Kalleklev expressed satisfaction with the execution of the VLGC deliveries and noted the potential for Avance Gas to leverage its new shareholding in BW LPG amidst a challenging winter market for VLGCs.