Sells its VLGC fleet for $1,050

Hamilton, Bermuda August 15, 2024

Avance Gas Holding Ltd. (“Avance Gas” or the “Company”) (OSE: AGAS) entered into an agreement with BW LPG Ltd (“BW LPG” or “the Buyer”) on 15 August 2024 to sell its fleet of very large gas carriers (VLGCs) for an amount of US$1,050 million. Avance Gas’s VLGC fleet today consists of eight eco-VLGCs built in 2015 and four dual-fuel VLGCs to be built in 2022 and 2023. The transaction will be governed by 10 individual Memorandum of Agreement (MoA) for the 10 owned VLGCs, while for the remaining two VLGCs a novation with the existing debt obligation will be agreed in the Sale Leaseback Agreement (SLB).

The transactions and handover of the vessels to the buyer are expected to take place in the period from September 15 to December 31, 2024, which will allow for a smooth handover and allow Avance Gas to sell the vessels on the winter market for a while longer. The estimated carrying value of the VLGC fleet at handover is between $730 million and $740 million, so a gain on sale is expected to be between $310 million and $320 million. In the first half of 2024, Avance Gas sold four VLGCs to other buyers for a gain of $121 million. As a result, a gain on sale of the VLGC fleet of approximately $435 million is expected for the full year 2024.

The sale of the vessels is to be settled with approximately US$585 million in cash and a novation of approximately US$132 million of debt obligations under the SLB. The remainder will be settled with 19.282 million shares of BW LPG at a price of US$17.25 per share, representing a value of US$333 million. The share price of US$17.25 reflects the fair value of the share based on the net asset value determined by Avance Gas under the agreement. The transaction will therefore make Avance Gas the second largest shareholder in BW LPG with an interest of approximately 12.77%. Under the agreement, Avance Gas has agreed to a 40-day lock-up period on the Consideration Shares for any settlement under the MoAs.

Net proceeds from the transaction are expected to be approximately $217 million. The cash proceeds are in addition to the pro forma cash balance of $257 million reported on May 15, 2024 in connection with the first quarter 2024 reporting. The pro forma cash consists of the cash balance of $360 million as of March 31, 2024, the cash from the sale of “Avance Pollux” on May 10, 2024, less the dividend of $165 million paid to shareholders on May 31, 2024.

The Company also generated positive cash flow in the second quarter as we reported that 83 percent of the second quarter was booked at an average Time Charter Equivalent (TCE) rate of approximately $48,000 per day, well above our cash break-even of just $20,000 per day. Interest rate derivatives linked to Avance Gas’s existing loans will also be terminated prior to delivery of the vessels to the buyer and had a positive fair value of $10 million as of March 31, 2024.

Upon completion of this transaction, Avance Gas will then own four medium-sized gas carriers (MGCs) capable of carrying full ammonia loads, a 12.77% stake in BW LPG and a significant cash balance.

Avance Gas will announce its second quarter results on August 28, 2024 and will then provide further information about the transaction announced today and how the Company envisions the path forward following the sale of the VLGC fleet.

The transaction is subject to SLB novation approval for the leased VLGCs, charterer time charter novation approval for the three time charter VLGCs and customary MoA closing procedures.

Øystein Kalleklev, CEO of Avance Gas Holding Ltd., commented:

“We are pleased to announce the sale of our VLGC fleet on what we believe to be very attractive terms. Avance Gas’ fleet is somewhat under-sized today and therefore we found it more attractive for our shareholders to take advantage of the relatively high second-hand prices and sell the VLGC fleet to BW LPG. The sale will generate a profit of approximately $315 million while also allowing us to likely realize a trading profit until these vessels are handed over to the buyer.

In 2024, we successfully agreed the sale of 16 VLGCs for a total gain of approximately $435 million, which has enabled us to pay a significant dividend to our shareholders, and with this sale we will continue to do so until the transaction closes by the end of the year. In doing so, we crystallize value for our shareholders and become the second largest investor in BW LPG. We find BW LPG is well positioned with an integrated business model at a relatively modest price, and this transaction will further strengthen BW LPG through cost and revenue synergies. From our pragmatic perspective, it does not matter if the vessels are black or light green, as long as they generate cash.

We will provide further details in our second quarter results presentation on August 28, but shareholders can be assured that the profits generated will belong to shareholders and will be distributed in a timely manner following the completion of the transaction.”

If you have any further questions, please contact:

Media contact: Øystein Kalleklev, Chief Executive Officer

Contact for investors and analysts: Randi Navdal Bekkelund, Chief Financial Officer

Phone: +47 23 11 40 00

ABOUT AVANCE GAS

Avance Gas operates in the global liquefied petroleum gas (LPG) transportation market. The company is one of the world’s leading owners and operators of very large gas carriers (VLGCs) and owns sixteen LPG vessels, consisting of twelve modern VLGCs, including four dual-fuel LPG VLGCs and four dual-fuel MGCs for delivery in 2025 and 2026. For more information about Avance Gas, please visit www.avancegas.com.

This information is subject to the disclosure requirements under sections 5-12 of the Norwegian Securities Trading Act.