John Fredriksen’s Avance Gas is set to wind down operations following the sale of its final vessels to Belgium’s Exmar.
The Oslo-listed company said it has struck a deal to offload its four 40,000-cbm medium gas carrier (MGC) newbuilding contracts for $282.4m.
This equates to $70.6m per ship.
The transaction follows August’s massive $1.05bn disposal of all 12 of its VLGCs to BW LPG in Singapore.
Avance Gas chief executive Oystein Kalleklev said the dual-fuel ships will be delivered to Exmar in 2025 and 2026 from Nantong CIMC Sinopacific Offshore & Engineering in China.
They were contracted for $61.5m each last year.
Avance Gas will generate a profit of $34m from the deal.
Kalleklev said the transaction makes “perfect industrial sense”.
“Given its scale and specialisation within the MGC segment, Exmar is perfectly positioned to be the owner of these ultra-modern ships,” Kalleklev added.
“For Avance Gas, we are once again able to transact profitably by evidencing our willingness to take part in industrial consolidation where we put industrial logic and shareholder value creation ahead of growth. Hence, we will be rewarding our shareholders following the effectiveness of the transaction,” the CEO said.
Huge profit from ship sales this year
A total of 20 ships have been sold by the company this year.
Profit from all of them will equal “a cool $450m”, the boss added.
“Following these transactions, Avance Gas is as liquid as the seven seas, and we have therefore decided to prepay some of these gains,” he said.
This has resulted in a staggering $268m dividend for the third quarter.
“As we are not planning to invest in new ships, we are now preparing a wind-up process of Avance Gas to ensure we can return the remaining capital to our shareholders in a quick and cost-efficient manner,” Kalleklev said.
BW LPG is partially covering the VLGC sale price with its shares, which will be distributed to Avance Gas shareholders.
“We want to thank everyone for this fantastic journey, and we look forward to returning the remaining capital to our shareholders once the transactions are concluded,” the CEO concluded.
For the third quarter, net profit was $25.8m, down from $30m the year before.
Revenue was cut to $62.6m, against $79.5m in 2023.
