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Avenir’s shareholders are Stolt-Nielsen, Golar LNG, and Hoegh Evi, previously known as Hoegh LNG.
The small-scale LNG firm said on Tuesday the sale of the Higas LNG terminal to its shareholders remains subject to customary approvals and agreement on final legal documentation.
The company said that following the divestment of the terminal, Avenir will operate as a pure-play small-scale LNG shipping and trading company.
In 2022, Avenir became the sole owner of the Higas terminal after it bought a 10 percent stake from Italian engineering firm Gas and Heat and also a 10 percent stake from CPL Concordia.
Gas and Heat was also the EPC contractor for the Higas storage, regasification, and distribution facility in the port of Oristano.
In May 2021, the facility received its first shipment from the 7,500-cbm Avenir Accolade.
After that, Avenir’s 7,500-cbm bunkering and supply vessel, Avenir Aspiration, started serving the terminal in Sardinia in January 2021
The facility features six horizontal low-pressure cryogenic type C tank storage tanks with a total capacity of 10,800 cbm.
$50 million in new equity, vessel options
As part of Avenir’s long-term growth strategy, the company has also begun the process of seeking a listing on Euronext Growth Oslo later this year.
In connection with the listing, the company plans to raise about $50 million in new equity, fully underwritten by Stolt-Nielsen, to finance two newbuild 20,000-cbm LNG bunker and supply vessels announced in April 2024.
Avenir ordered the vessels from China’s CIMC SOE and chartered the first to Geneva-based trader Vitol.
Additionally, Avenir said in the statement it is also considering increasing the equity raise to support further fleet expansion
The company has secured options for two additional newbuilds at “attractive terms”.
“It is the intention that the Euronext Growth Oslo listing and new equity raise will expand the shareholder base and increase the free float of Avenir’s shares,” the company said.
Avenir said the divestment of the Higas LNG terminal is proposed to be implemented prior to any listing via a restructuring of Avenir.
The indirect equity interests in the terminal will be transferred to a newly incorporated vehicle owned by the company’s shareholders.
“Consideration for the divestment will be in the form of a settlement of an existing shareholder loan and transfer of a portion of the Avenir shares held by the majority shareholders back to Avenir,” the company said.
According to Avenir, the transaction is intended to be structured such that Avenir’s NAV per share both, prior to, and after the divestment will remain at about $1.10 per share as valued by independent brokers.
Upon completion of the divestment, an opportunity for other Avenir shareholders to acquire interests in the Higas LNG storage terminal will be considered on substantially the same economic terms, it said.
Next chapter
“We are very pleased to announce this next chapter in Avenir’s history aimed at accelerating the company’s growth ambitions,” Avenir’s managing director, Jonathan Quinn, said.
With the LNG fuelled fleet set to grow from about 400 vessels in 2023 to over 1,000 vessels by 2028, demand for bunker vessels is set for “strong growth” over the next decade, he said.
Quinn said this is a “timely opportunity” to refocus and consolidate the company’s strategy into shipping and trading by divesting from Higas.
“This transaction will enhance our position as a leading pure-play owner of LNG bunker vessels and improve operational efficiency, paving the way for a more streamlined and competitive company that has a strategy to leverage favorable market conditions by growing our fleet,” Quinn said.
This new investment program for the two 20,000-cbm vessels marked the second phase of growth for Avenir, increasing the fleet by 40 percent and 80 percent in terms of total capacity.
In May 2022, Avenir took delivery of the 20,000-cbm Avenir Achievement, chartered by Shell, from CIMC SOE, concluding its initial asset development program.
Avenir Achievement also has a sister vessel, but Avenir sold it to a joint venture consisting of China’s terminal operator, Shanghai International Port (SIPG), and Shenergy.
The small-scale player also has four 7,500-cbm LNG bunkering and supply vessels in its fleet.