Avance Gas sells veteran VLGC for $66m at $27m profit

Avance Gas is set to bank a huge profit from offloading its VLGC ship after completion of her two-year time charter.

The buyer, a National Oil Company, will pay $66m for the Oslo-listed company’s 2008-built very large gas carrier (VLGC), Venus Glory, scheduled for delivery in February or March 2024, giving Avance Gas a book gain of around $27m once the transaction is carried out.

The ship is currently trading spot after completing her two-year time charter party (TCP) with IOC at the end of fourth quarter 2023. The $66m sale price is less broker commission of one percent.

The net cash proceed after deducting repayment of bank loan is expected to be approximately $40m.

The parties have sealed and executed a sale MoU deal, which is subject to certain closing conditions, in line with industry standards.

The shipowner sold all of its five 2008-2009 built ships, as part of its renewal fleet strategy. It also took delivery of four newbuild VLGCs and contracted four dual-fuel MGCs.

Øystein Kalleklev, chief executive of Avance Gas, said: “We are pleased to complete our fleet renewal program with the agreement to sell Venus Glory which we have marketed for sale after completion of her two-year time charter.

“With the sale of Venus Glory, we have during the last two years, sold all our five 2008 and 2009 built ships. At the same time, we have taken delivery of four new dual fuel VLGCs as well as contracted four dual fuel MGCs which also can carry ammonia in addition to LPG for delivery in 2025 and 2026.

“In the first quarter Of 2024, Avance Gas is expected to book profits of approximately $85 million from the sale of the three ships Iris Glory, Venus Glory and the fifth dual fuel VLGC newbuilding which was intended to be named Avance Castor.

“In the second quarter we expect to book a gain of approximately $36 million from the sale of the sixth dual fuel VLGC newbuilding which was intended to be named Avance Pollux. In total, we will thus book gains from sale of ships of approximately $121 million in the first and second quarter.

“The net cash proceeds from these sales are expected to be approximately $185 million, or $225 million when considering the swap of the $135 million sale-and-leaseback financing for the fifth and sixth dual fuel VLGC newbuilding to Avance Polaris and Avance Capella.

“With these ship sales and the positive outlook for the VLGC freight market, Avance Gas remain in a very good position to continue to deliver strong returns and attractive dividends to its shareholders.”