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Avance Gas Holding Ltd: Strategic Exit and Capital Returns Drive Q1 2025 Momentum

Charles HayesFriday, Apr 25, 2025 1:25 am ET

2min read

Avance Gas Holding Ltd has entered a pivotal phase in its evolution, shifting from an operational shipping company to a liquidating entity focused on returning capital to shareholders. The first quarter of 2025 marked the final steps in this transition, with the completion of asset sales, significant dividend distributions, and preparations for formal liquidation. While traditional revenue and net income metrics are secondary to this strategic pivot, the company’s execution of its exit plan has been robust, supported by strong shareholder returns and disciplined risk management.

Key Q1 2025 Milestones

Completion of MGC Newbuilding Sale
In February 2025, Avance finalized the sale of its four Medium-Sized Gas Carrier (MGC) newbuildings to Exmar LPG BV. The transaction, valued at $282.4 million, saw Avance receive $62.1 million upfront in February, with a final $34.2 million installment expected by April/May 2025. This concluded the company’s ownership of all operational assets, as its VLGC fleet had already been sold in late 2024.
Dividend Distributions
Extraordinary Dividend ($0.75/share): Distributed in March 2025 using proceeds from the initial MGC sale, this returned $57 million to shareholders.
Final Dividend ($0.70/share): Scheduled for April/May 2025 following the final MGC payment, this will complete the return of approximately $56.7 million.
Total Distributions: Since 2014, Avance has returned over $1.5 billion to shareholders, with $1.2 billion distributed in the past three years alone.
Liquidation Timeline
The company announced its intention to wind down by Q2 2025, with a Special General Meeting (SGM) on May 16, 2025, to appoint a liquidator and approve delisting from the Oslo Stock Exchange. Formal liquidation is expected to begin in June 2025 after final capital returns.

Financial Highlights and Market Performance

Stock Performance: As of April 2025, Avance’s YTD total return was 92.48%, significantly outperforming the OBX Index’s 3.88% return. This reflects investor confidence in the company’s capital return strategy and execution.
Balance Sheet Strength: As of December 2024, Avance held $176 million in cash, $215.2 million in BW LPG shares (distributed to shareholders), and no debt. The final MGC proceeds further reduced liquid assets as capital was returned.
Dividend Sustainability: The final $0.70/share dividend, paired with prior distributions, ensures shareholders receive ~$0.74/share in total Q1 2025 returns, aligning with the company’s commitment to maximizing returns.

Risks and Considerations

Final MGC Settlement Risk:
Half of the $34.2 million final payment is held in an escrow account with an investment-grade bank, mitigating counterparty risk. However, delays in steel cutting for the last vessel could impact timing.
Liquidation Execution:
The SGM’s success and timely delisting are critical to avoid regulatory or shareholder disputes. A smooth process would minimize residual liabilities.
Market Volatility:
Shareholders may face risks tied to the Oslo Stock Exchange’s final trading date, though proceeds are expected to be distributed before delisting.

Conclusion

Avance Gas Holding Ltd’s Q1 2025 activities underscore a disciplined execution of its liquidation strategy, prioritizing shareholder returns over traditional operations. With $1.5 billion returned since 2014 and a final dividend of ~$0.74/share in Q1 2025, the company has delivered on its promise to maximize value for investors. The 92.48% YTD stock return and 95.73% 1-year performance reflect market approval of this approach.

While risks remain—such as minor delays in the final MGC payment or liquidation logistics—the company’s escrow structure and transparent timeline mitigate major uncertainties. Investors should monitor the SGM outcome (May 16, 2025) and delisting progress, which will mark the final chapter of Avance’s 15-year operational history. For those focused on capital returns, Avance Gas’s exit strategy stands as a model of strategic execution in a sector increasingly prioritizing liquidity over growth.

As the company transitions to liquidation, shareholders can expect full capital returns by mid-2025, with minimal operational or financial risks remaining. The focus now shifts to orderly wind-down, cementing Avance Gas’s legacy as a disciplined and shareholder-centric enterprise.

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