Avance Gas: Navigating LNG's Golden Age with Precision—Why Now is the Time to Act

The global LNG market is on the cusp of a historic expansion, driven by energy transition dynamics, geopolitical shifts, and a surge in demand from Asia and Europe. Against this backdrop, Avance Gas Holding Ltd (OSE: AVNG) has executed a masterclass in strategic capital allocation, leveraging its recent Special General Meetings (SGMs) to crystallize value for shareholders while aligning its liquidation timeline with the structural tailwinds reshaping gas transportation.

The Strategic Shift: From Operator to Value-Creator

Avance Gas’s decision to transition from an operational shipping company to a liquidating entity is often misunderstood as a retreat. In reality, it’s a calculated move to maximize shareholder returns in an industry where legacy assets are being replaced by modern, efficient fleets—and where liquidity is king. By selling its aging VLGC and MGC fleets to BW LPG and Exmar LPG, Avance has:
- Eliminated execution risk tied to vessel operations, focusing instead on returning $1.5 billion in total capital to shareholders since 2014.
- Secured contractual clarity through asset sales with staggered payments, ensuring steady cash flows (e.g., the final $34.2 million MGC payment received in April 2025).
- Positioned itself as a beneficiary of BW LPG’s fleet modernization, as Avance’s 12.7% stake in the company directly ties its returns to the growth of the global LNG trade.

Why the SGMs Matter: Capital Allocation at Its Sharpest

The SGMs of 2025 have been pivotal in cementing Avance’s path to liquidity. The May 16, 2025, meeting—which occurs on the article’s publication date—will finalize the appointment of a liquidator and delisting from the Oslo Stock Exchange. This process has already been greased by prior resolutions:
1. February 2025 SGM: Approved a capital reduction to zero out the Share Premium account, unlocking $446 million for shareholder distributions. This maneuver ensures maximum flexibility in returning BW LPG shares and cash dividends.
2. May 2025 SGM: Will mark the final procedural hurdle before liquidation begins. With $176 million in cash on hand (as of December 2024) and no debt, Avance is primed to deliver its final $0.74/share dividend this quarter, completing a three-year capital return cycle.

LNG Demand Growth: The Catalyst Igniting Value

The LNG market is projected to grow at a 5-6% CAGR through 2030, driven by Asia’s energy needs and Europe’s pivot away from Russian gas. While Avance is exiting operational shipping, its strategic partnerships and asset sales directly link its shareholders to this growth:
- BW LPG’s modern fleet: Avance’s 12.7% stake in BW LPG positions it to benefit from the company’s $215 million valuation uplift, as BW expands its fleet of eco-friendly VLGCs.
- Contractual visibility: The MGC sale to Exmar included performance-linked payments, ensuring Avance’s returns were tied to Exmar’s execution—mitigating counterparty risk and aligning incentives with LNG transportation demand.

Note: Avance’s YTD 2025 return of 92.48% vs the OBX’s 3.88% underscores market recognition of its disciplined execution.

Undervalued Amid Structural Tailwinds

Avance’s stock is trading at a discount to its liquidation value, even as it prepares to distribute its final $56.7 million in cash and BW LPG shares. Key reasons to act now:
1. Near-term catalyst: The May 16 SGM removes regulatory and procedural overhang, unlocking delisting and final dividend distributions.
2. No downside risk: With no debt and a clear path to returning all capital, shareholders face minimal downside.
3. LNG’s compounding tailwinds: BW LPG’s stake and the global LNG trade’s growth will amplify returns as the market matures.

Conclusion: Capture the Cash Flow Surge

Avance Gas has transformed uncertainty into clarity, using SGM resolutions to eliminate operational risk and channel capital directly to shareholders. With LNG demand set to soar and its liquidation timeline nearing completion, the stock offers a rare combination of immediate cash flow upside and exposure to a decadal industry shift.

Recommendation: Buy AVNG before the final dividend distributions materialize. This is a risk-averse, value-maximizing play on LNG’s golden age—one where Avance’s precision in capital allocation ensures shareholders capture every dollar of its liquidation proceeds.

The views expressed are based on publicly available data as of May 16, 2025. Always conduct independent research before making investment decisions.