Avance Gas (Hold, TP: NOK138.00) - Significant cash balance ahead
Following the announced transaction where BW LPG acquired 12 VLGCs from Avance Gas, the company is now limited to four MGCs on order, BW LPG shares, cash, working capital and cash flow for the remaining trading days until delivery of the VLGCs. Thus, on our estimates, we calculate a current NAV/share of NOK130, while applying our current NAV/share for BW LPG of NOK193 as the basis for the valuation of the shareholding, resulting in our target price. We reinstate a recommendation with a HOLD and NOK138 target price.Avance Gas Holding is principally engaged in the transportation of Liquefied Petroleum Gas ("LPG"). Co. operates a fleet of 14 Very Large Gas Carriers, providing transportation services to oil majors and traders of LPG on a global basis. Co. transports LPG from the Middle East and the U.S. Gulf or U.S.loan facility from BCBloan facility from BCB(excludes dividends satisfied by issue of shares) East Coast to destinations in Europe, South America and Asia.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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