Avance Gas (Hold, TP: NOK22.00) - Dilutive issue could come next
We have previously said that Avance Gas was unlikely to have the liquidity to convert to LPG fuel or install scrubbers without raising equity. Facing underperformance to BW LPG by USD3k/day in the spot market in the past two years, we still believe that investors could lose either way: 1) through a diluting equity issue; or 2) further inferior spot performance versus peers. The clock is also ticking on a debt restructuring, likely including a dilutive equity raise.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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