AGHL will discuss with Frontline 2012 the purchase of eight 83,000 cu m VLGC newbuilds from Frontline 2012. The vessels are currently under construction at Changxing in China and due for delivery between mid-2014 and end-2015. The move will more than double AGHL's current fleet of six VLGCs.
Stolt-Nielsen and Sungas Holdings are currently equal partners in AGHL after Tanspetrol backed out earlier this year.
Niels Stolt-Nielsen, ceo of Stolt-Nielsen commented, "The acquisition of shares in AGHL by Frontline 2012 is a further step in AGHL's consolidation strategy of the VLGC market. With three strong owners, it is the company's plan to continue to focus on second-hand tonnage, mergers and acquisitions.
"With rising US exports of LPG from shale gas resources and with continued growth in LPG exports from the Middle East and West Africa, the dynamics of this transportation market are improving in line with our expectations. It is the owners' plan to do an OTC listing in Oslo followed by an IPO."
Frontline 2012 chariman John Fredriksen said, "We are pleased to be able to enter into a deal with Stolt-Nielsen and Sungas. We will get immediate market exposure to what today is a healthy freight market. With its existing six modern VLGCs, a solid operation, and strong owners, Avance Gas is well positioned to grow and act as a major consolidator in the large LPG market."
The deal currently takes the form of a non-binding heads of agreement, but once firmed up in contract, Frontline 2012 intends to secure an OTC listing for AGHL by dishing out around 20% of the shares it receives to its own shareholders.
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