Avance Gas Annual Report 2023

While I don’t own Avance Gas shares (primarily because it doesn’t trade on a major US Exchange), I did browse their Annual Report because of my ownership in Dorian LPG (LPG). What I was primarily looking for was fleet cost data.

As mentioned in a couple of other threads, Avance Gas was supposed to take delivery of two newbuild VLGCs in 2024. But instead, decided to monetize the deal by selling the two vessels upon delivery in Q1 & Q2 2024. The AR goes into the “gory” details - vessels (cost of $79M when originally ordered) were supposed to deliver in late 2023. Instead, Avance opted to spend an additional $3M, and upgrade them to handle NH3 (Ammonia) cargo. Then, turned around and sold the pair of vessels for $240M .

Were Avance Gas prepared for the newbuilds? Yes, the company had already arranged financing for the new pair of vessels. The financing transfers to a pair of sister vessels (delivered in 2022) and frees up additional cash. The AR has a detailed history of the company, its original backers prior to Fredriksen getting involved, and some hint of Fredriksen trusts’ continued involvement (one of his daughter’s is a member of the Avance Gas board). Hemen Holdings (one of Fredriksen’s trusts) is a majority owner, so shareholders can expect some huge payouts in 2024.

As I was perusing the AR, I gleamed a data-point that might explain the option to monetize. Per the report, there are 86 VLGC newbuilds on order. 44% of them have the VLAC option (I infer, Ammonia as cargo). That is a good number of vessels that will have that capability in the future, which makes the vessel special.

But not-so-special. That also doesn’t include owners e.g. Dorian LPG, who are contemplating upgrading existing VLGCs to handle Ammonia.