John Fredriksen’s Avance Gas is nearing the end, but it won’t go towards the light before one last big dividend.
Chief executive Oystein Kalleklev outlined a plan to wind the company up by May.
It includes finishing up the $1.05bn sale of 12 VLGCs to BW LPG and the $282m midsize gas carrier (MGC) sale to Exmar, plus cutting a $518m cheque to shareholders.
“That’s the final voyage,” Kalleklev said of the planned May 2025 first-quarter earnings report.
“It’s our intention to close the company and return the money to where it belongs, and that’s the shareholders.”
Speaking on Avance’s third-quarter earnings call, he said the two agreements to sell its fleet would leave the company “as liquid as the seven seas” with about $518m left to distribute in the fourth quarter.
Those funds are a near 50/50 split of cash and BW LPG shares, which it values at $13.20 each.
The shares will be paid out at about one-quarter of a BW LPG share to one Avance Gas share, Kalleklev said on the call.
From there, the company intends to close the ship sales and hold a special general meeting to reduce share capital and authorise the winding up.
After the first quarter, it will pay another dividend including whatever residual cash is left over.
As part of the MGC sale, Avance will receive a $50m refund on already-paid yard instalments and $34.2m in compensation after steel is cut on the last of the four newbuildings, planned for April 2025.
The quartet is under construction at CIMC Sinopacific Offshore & Engineering shipyard in Nantong, China.
During the call, Kalleklev said Exmar would be a better owner for the four ships and a “first-rate operator” overall.
“I wish them the best of luck running these ships, which I’m sure they’re going to do a terrific job on,” he added.
The BW LPG sale was announced in August in a cash-and-stock deal that made Avance the second-largest shareholder in the Andreas Sohmen-Pao-backed LPG carrier owner.
In the intervening months, Kalleklev said the remaining four MGCs could be time chartered-out or become part of an MGC/ammonia outfit before a sale and liquidation.
On Wednesday, he said the company had already begun laying off employees and it has to liquidate some special purpose vehicles.
The overall costs would be negligible, Kalleklev said.
“It’s really about filling out papers,” he said during the call. “It’s a fairly low cost of liquidating the company. There’s no golden parachutes for anybody.”
In late trading, Avance Gas shares gained NOK 5 ($0.45) to NOK 109.
