Avance Gas has sold the oldest VLGC in its fleet at a price that analysts have described as "very firm" after failing to sell it last year.
The 82,500-cbm Avance (built 2003) has been sold to an unnamed third party for $35m, the Oslo-listed shipowner said on Tuesday.
Brokers told TradeWinds last year that Avance had been seeking around $40m when it put the Kawasaki-built unit on the market in September 2019, before withdrawing it two months later.
Online platform VesselsValue estimates the Avance's current market value at $28.4m, while Maritime Strategies International puts it at just $26.6m.
Avance said it expects the sale to generate $17m in net cash proceeds after debt on the vessel has been repaid.
The VLGC specialist expects to book profit of around $6m in its third-quarter results.
A 10% deposit payment has been received, while the delivery and balance payment is expected in September, Avance Gas added.
Analysts at Fearnley Securities described the reported sale price as "very firm" in a research note on Tuesday.
"The sales price is some $10m [more] than our value estimate, reflecting a strong price and high price variance for older tonnage," the firm said.
Fearnley Securities said the price is well above the last comparable sale, when the 78,888-cbm Gas Diana (built 2000) was sold by NYK Line for $18.5m in March 2019.
But the investment bank said the transaction is not likely to change the state of the market.
"Though the sales price is well above our estimate, we are unlikely to lift the entire value curve substantially given the inherent illiquidity of the S&P [sale and purchase] market," it added.
The Avance is due to undergo an intermediate survey in December, so divesting the unit will save Avance Gas another $2m, according to Fearnley Securities.
Renewing the fleet
The sale is part of the shipowner's fleet renewal strategy, by which it aims to reduce the average age and fuel efficiency of its fleet.
Peder Simonsen, chief financial officer and interim chief executive, told TradeWinds in May that Avance is constantly looking to sell older ships and buy new ones, but opportunities have been scarce in what has been a sluggish sale-and-purchase market.
Following the sale, the fleet will comprise 13 VLGCs with an average age of 7.8 years, according to data from VesselsValue.
The shipowner also has two 91,000-cbm dual-fuel LPG carrier newbuildings on order, which are scheduled for delivery in 2021 and 2022.
The Avance was the first vessel in the Avance Gas fleet when the company was established in 2007 as a subsidiary of Stolt-Nielsen, before it teamed up with fellow founding shareholders Fredriksen Group and Sungas Holdings.
Stolt-Nielsen bought the vessel in November 2009, when it was known as the Althea Gas, from Iino Marine for $52.25m.
John Fredriksen's private investment company Hemen Holding is now the largest shareholder in Avance Gas, with 23.7% of shares.
Stolt-Nielsen and Sungas both sold their shareholdings in the company earlier this year.
