Oslo-listed very large gas carrier (VLGC) specialist Avance Gas has announced the successful sale and delivery of the first VLGC, the 2015-built non-scrubber ship Chinook, to BW LPG Ltd.
During the next few weeks, the shipowner plans to deliver the remaining 11 VLGCs to BW LPG. All the vessels are scheduled for delivery to BW LPG before the year ends.
Øystein Kalleklev, CEO of Avance Gas, said: “We are pleased to start executing deliveries of the VLGC fleet to BW LPG with the first delivery of Chinook successfully executed according to plan. During the next few weeks, we will deliver the remaining 11 VLGCs to BW LPG.”
Earlier this year Avance Gas made a deal with BW LPG Ltd to sell its fleet of very large gas carriers (VLGCs) for a consideration of $1,050m.
The sale of the VLGC fleet was agreed to be settled with approximately $585m of cash, novation of approximately $132m of debt obligations under a sale leaseback agreement, with the remainder being settled in 19.282 million shares in BW LPG, where the parties agreed a fair value – as Avance Gas said – of such compensation at $333m or a net asset value basis of $17.25 per share.
The top management of the company, Øystein Kalleklev, says that the overall book gain from the transaction was estimated to be $315m of which $10m was assumed to be depreciation savings, as all vessel depreciation was discontinued on August 15, when the sale of the ships was announced.
As part of the transaction, 1.35 million shares in BW LPG have been issued to Avance Gas corresponding to approximately 1% ownership share.
Once the deal is finalized and all shares has been received, Avance Gas will be the second largest shareholder in BW LPG with approximately 12.8% ownership share.
In connection with the sale the ship mortgage has been repaid, Avance Gas said in a filing, and the company expect to receive net cash proceeds of $18.5m, in addition to the 1.35 million consideration shares in BW LPG.
According to the shipowner, the vessel is currently on a variable time charter with an ‘energy major’ expiring in mid-2025 and this time charter has also been successfully novated to BW LPG.
The eleven remaining vessels are scheduled for delivery to BW LPG prior year-end. Eight vessels are expected to be delivered to BW LPG in November, while the remaining three VLGCs are expected to be delivered in December.
“Two of the ships are subject to closing procedures in connection with novation of lease, while customary closing procedures under the memorandum of agreements applies to all ships,” Avance Gas added.
