Avance Gas Holding Ltd, the Bermudian-based company engaged in the transportation of liquefied petroleum gas, has agreed to sell two newbuildings for $240 million, pocketing an estimated $73 million profit.

The two 91,000 cubic metre dual-fuel newbuildings were contracted in April 2021 at a price of approximately $78 million each. With delivery dates delayed from this year to next, $3 million upgrades will allow the ships to load ammonia cargoes as well as run on ammonia fuel when this feature becomes commercially available.

The cash release from the sale is expected to be $120 million as Avance has already paid about $47 million in milestone payments to the yard in accordance with the ship-building contract.

Furthermore, since these two ships have been financed with a $135 million sale-and-leaseback agreed in August 2022, Avance Gas has agreed with the financier to swap the lease from the two newbuildings to the sister ships Avance Polaris and Avance Capella (built 2022) which are being financed under a bank loan maturing in 2027.

Øystein Kalleklev, CEO of Avance Gas, said: “While we were looking forward to expanding and renewing our fleet with these two high-spec newbuildings, our focus is maximising shareholder value.

“While maximising shareholder value might seem less in vogue these days than in the past, it remains our No 1 priority and is our licence to operate as prudent stewards of our shareholders’ capital.”

He added: “Once the transaction has been completed, which is expected to occur during second quarter of 2024, Avance Gas will evaluate returning a substantial part of the cash proceeds to its shareholders.”