Avance Gas makes bid for Aurora LPG

The roving acquisitive eye of Avance Gas has moved from Dorian LPG to another big name in gas transport, Aurora LPG. Oslo-listed Avance Gas, which failed last year to take over Dorian LPG, has made a bid for Aurora LPG.

0.574 new shares in Avance Gas are being offered as consideration for each share in Aurora LPG, which based on the NOK104.5 closing share price of Avance Gas last Friday, implies a consideration of NOK60 ($6.91) per share in Aurora LPG.

“The offer represents a premium of 34.8% compared to the one month volume weighted average share prices of both Avance Gas and Aurora LPG for the period ending on 13 November 2015,” Avance Gas said in a release.

A total of 16,547,490 new common shares in Avance Gas will be issued as consideration, assuming full acceptance of the offer.

The combined entity would own and operate a fleet of 23 VLGCs by the third quarter of next year.

“Increased scale will drive improved access to financing. Increased scale will increase liquidity in the stock and hence give better access to and over time better pricing in the capital markets,” Avance Gas said in a release.

The offer is expected to close next month with a minimum acceptance among shareholders of 90% needed for the merger to take place.

Avance is a three-way venture between Norway’s Stolt-Nielsen, Saudi Arabia’s Sungas Holdings and Bermuda-based shipowner Frontline 2012. The company has made clear it wants to grow.

Avance Gas has actively looked for mergers and acquisitions for at least two years.

“We are very interested in building up the size of the company, so if anyone wants to talk to us, they are welcome,” the company’s founder Christian Andersen told this site in May.

Avance took on its first ship in 2009. In late 2010, it acquired three VLGCs in a share/cash transaction and Sungas became a 50% shareholder in the company. In mid-2012, Avance acquired Maran Gas’s LPG ships in a cash transaction, adding two ships to the fleet, then consisting of six modern VLGCs. In the summer of 2013, Avance did a private placement to Frontline 2012, whereby the Fredriksen vehicle became a 33% shareholder alongside Stolt-Nielsen and Sungas. In October of the same year, Avance acquired Frontline 2012’s newbuilding program at Jiangnan Shipyard, building the fleet to 14 units. That same month it listed on the OTC market at the Oslo Stock Exchange and in April last year it became a publicly listed company on the Oslo Stock Exchange.


Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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