A Bermudian-based company that is engaged in the transportation of liquefied petroleum gas has sold its fleet of very large gas carriers in a deal worth $1.05 billion.

Avance Gas Holding Ltd has sold the ships to BW LPG Ltd, the liquefied petroleum gas shipper that was formerly based in Bermuda, but is now domiciled in Singapore.

Avance Gas said its VLGC fleet consists of eight 2015-built eco VLGCs and four dual-fuelled VLGCs built in 2022 and 2023.

The transaction is regulated by ten individual memorandums of agreement for the ten owned VLGCs while the remaining two VLGCs on sale-leaseback agreement are agreed to be novated with the existing debt obligation.

The transactions and delivery of ships to the buyer is scheduled to take place between September 15 and December 31, which the seller said enables a smooth handover while allowing Avance Gas to trade the ships for a further period in the winter market.

The estimated book value of the VLGC fleet at delivery is between $730 million and $740 million, and is expected to generate a gain on sale of between $310 million and $320 million, Avance Gas said.

The sale is agreed to be settled with approximately $585 million of cash, novation of approximately $132 million of debt obligations under the sale-leaseback with the remainder being settled with 19.282 million shares in BW LPG at a price of $17.25 per share representing a value of $333 million.

The net cash proceeds from the transaction are expected to be approximately $217 million, the company said.

Upon closing, Avance Gas will own four medium-sized gas carriers capable of carrying full ammonia cargoes, a 12.77 per cent shareholding in BW LPG as well as a substantial cash holding.

The transaction is subject to approval of novation of the sale-leaseback for the leased VLGCs, charterer’s approval of novation of time charter for the three VLGCs on time charter as well as customary closing procedures under the MoAs.

Øystein Kalleklev, chief executive of Avance Gas, said: “The fleet of Avance Gas is today a bit subscale and we have therefore found it more attractive for our shareholders to take advantage of the relatively high second-hand prices and sell the VLGC fleet to BW LPG.”

He added: “We will revert on more details in our second quarter results presentation on August 28, but shareholders can rest assured that the profits generated belongs to its shareholders and will be distributed in a timely manner once the transaction concludes.”