Avance Gas Holding Ltd : Agreement on amended financing terms and contemplated private placement

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Avance Gas Holding Ltd - Agreement on amended financing terms and contemplated private placement

Bermuda, 20 October 2016: Avance Gas Holding Ltd ("Avance Gas" or the "Company") today announces that it has reached a comprehensive agreement with its lending banks. For a 2.5 year period commencing on 1 January 2017 (the "Deferral Period"), amortization payments on both of the Company's bank loan facilities will be reduced by 50%, deferring a total of USD 55 million of amortisation payments over the period.

To further reduce uncertainty in a potentially prolonged weak freight market, it has been agreed with the lending banks that the minimum book equity covenant will be reduced from USD 250 million to USD 200 million and the minimum equity ratio covenant will be reduced from 30% to 25% during the Deferral Period. It has further been agreed that the minimum value to outstanding loan covenant will be reduced from 130% to 110% from 31 December 2016 until 31 March 2019, following which there will be a gradual step-up towards 31 March 2020, when the original covenant level of 130% will be reinstated.

The interest margins on the bank loan facilities will be increased with 25 basis points, to 225 basis points on the USD 200 million facility and 275 basis points on the USD 450 million facility. A cash sweep mechanism will commence in Q3 2019. The Company will also be able to cancel the amendment agreements at zero cost once original maturity schedules and original covenants are restored.

The amendment of the bank loan facilities is a proactive step to strengthen the Company's balance sheet and prepare for a prolonged market downturn, while retaining an attractive and levered exposure to the LPG freight market. As of 30 September 2016, the Company had a cash position of USD 88 million, which excludes approx. USD 13.3 million in proceeds from the sale of Gaea which is expected to be closed in Q4 2016.

The agreement with the lending banks is conditional upon the Company raising minimum USD 55 million of new equity. The Company has mandated ABN AMRO, Danske Bank, DNB Markets and Nordea Markets as Joint Bookrunners and Credit Agricole, SEB and Swedbank as Joint Managers (together, the "Managers") to explore the opportunity to raise equity in a potential private placement (the "Private Placement").

Leading shareholders in the Company have indicated strong interest for supporting the Private Placement.

For further queries, please contact:

Christian Andersen, President
Tel: +47 22 00 48 05 / Email: c.andersen@avancegas.com

Peder C. G. Simonsen, CFO
Tel: +47 22 00 48 15 / Email: p.simonsen@avancegas.com

About Avance Gas
Avance Gas operates in the global market for transportation of liquefied petroleum gas (LPG). The Company is one of the world's leading owners and operators of very large gas carriers (VLGCs), operating a fleet of fourteen modern VLGC ships.

Important information
This communication may not be published, distributed or transmitted in the United States, Canada, Australia or Japan. These materials do not constitute an offer of securities for sale or a solicitation of an offer to purchase securities of the Company in the United States, Norway or any other jurisdiction. The securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"). The securities of the Company have not been, and will not be, registered under the U.S. Securities Act. Any sale in the United States of the securities mentioned in this communication will be made solely to "qualified institutional buyers" as defined in Rule 144A under the U.S. Securities Act and to "major U.S. institutional investors" under SEC Rule 15a-6 to the United States Exchange Act of 1934. No public offering of the securities will be made in the United States.

In any EEA Member State that has implemented the Prospectus Directive, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU, to the extent implemented in any relevant Member State) and includes any relevant implementing measure in the relevant Member State.

In the United Kingdom, this communication is only addressed to and is only directed at Qualified Investors who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as "Relevant Persons"). These materials are directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "anticipate", "believe", "continue", "estimate", "expect", "intends", "may", "should", "will" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice.

This announcement is made by and, and is the responsibility of, the Company. The Managers are acting exclusively for the Company and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, or for advice in relation to the contents of this announcement or any of the matters referred to herein. Neither the Managers nor any of their respective affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.

This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Neither the Managers nor any of their respective affiliates accepts any liability arising from the use of this announcement.

Each of the Company, the Managers and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise. The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.