avance gas holding ltd - seb group...25 october 2016 (the "private placement") and (ii)...

PROSPECTUS

AVANCE GAS HOLDING LTD

(An exempted company limited by shares incorporated under the laws of Bermuda)

Listing of 26,750,000 Private Placement Shares issued in connection with a Private Placement completed on

25 October 2016

Subsequent Offering and listing of up to 2,500,000 Offer Shares at a Subscription Price of NOK 17.00 per Offer Share with

Subscription Rights for Eligible Shareholders

Subscription Period for the Subsequent Offering: From 27 October 2016 to 16:30 hours (CET) on 10 November 2016

The information in this prospectus (the "Prospectus") relates to (i) the listing on Oslo Børs, a stock exchange operated by Oslo Børs ASA (the "Oslo Stock

Exchange") by Avance Gas Holding Ltd (the "Company" or "Avance Gas"), an exempted company limited by shares incorporated under the laws of

Bermuda (together with its consolidated subsidiaries, the "Group") of 26,750,000 new shares in the Company with a nominal value of USD 1.00 each (the

"Private Placement Shares") issued at a subscription price of NOK 17.00 per Private Placement Share in connection with a private placement completed on

25 October 2016 (the "Private Placement") and (ii) the subsequent offering and listing (the "Subsequent Offering") on the Oslo Stock Exchange of up to

2,500,000 new shares in the Company, each with a nominal value of USD 1.00, (the "Offer Shares") to be issued at a subscription price of NOK 17.00 per

Offer Share (the "Subscription Price"). The shareholders of the Company holding less than 63,000 shares in the Company as of 20 October 2016 (and being

registered as holder of such in the Norwegian Central Securities Depository (the "VPS") on 24 October 2016 pursuant to the two days' settlement procedure

(the "Record Date")), except for shareholders having been allocated Private Placement Shares in the Private Placement, and who are not resident in a

jurisdiction where such offering would be unlawful, or for jurisdictions other than Norway, would require any filing, registration or similar action (the "Eligible

Shareholders"), will be granted non-transferable subscription rights (the "Subscription Rights") that, subject to applicable law, give the right to subscribe

for and be allocated Offer Shares at the Subscription Price. The Subscription Rights will be registered on each Eligible Shareholder's VPS account. Subscription

Rights will not be issued in respect of any existing shares held in treasury by the Company.

Each Eligible Shareholder will be granted 0.2385 Subscription Rights for every existing share registered as held by such Eligible Shareholder as of the Record

Date, rounded down to the nearest whole Subscription Right. The Subscription Rights may be used to subscribe for Offer Shares in the Subsequent Offering.

Each Subscription Right will, subject to applicable law, give the right to subscribe for, and be allocated, one Offer Share. Over-subscription is permitted, but

subscription without Subscription Rights is not permitted. The subscription period will commence on 27 October 2016 and expire at 16:30 hours Central

European Time ("CET") on 10 November 2016 (the "Subscription Period").

Subscription Rights that are not used to subscribe for Offer Shares before 16:30 hours (CET) on 10 November 2016 will have no value and will lapse

without compensation to the holder.

The Company's existing shares are, and the Private Placement Shares and the Offer Shares will be, listed on the Oslo Stock Exchange under the ticker code

"AVANCE". Except where the context requires otherwise, references in this Prospectus to "Shares" will be deemed to include the existing Shares, the Private

Placement Shares and the Offer Shares. The beneficial interests in the Company's existing Shares are, and the Private Placement Shares the Offer Shares will

be, registered in the VPS in book-entry form. All of the issued Shares rank pari passu with one another and each carry one vote.

Investing in the Shares, including the Private Placement Shares and the Offer Shares, involves a high degree of risk. Prospective investors

should read the entire document and, in particular, consider Section 2 "Risk factors" beginning on page 10 when considering an investment in

the Company.

The Subscription Rights and the Offer Shares are being offered only in those jurisdictions in which, and only to those persons to whom, offers

and sales of the Offer Shares and Subscription Rights may lawfully be made and, for jurisdictions other than Norway, would not require any

filing, registration or similar action.

The Subscription Rights and the Offer Shares have not been, and will not be, registered under the United States Securities Act of 1933, as

amended (the "U.S. Securities Act") or with any securities regulatory authority of any state or other jurisdiction in the United States (the

"U.S." or the "United States"), and are being offered and sold: (i) in the United States only to "qualified institutional buyers" ("QIBs") as

defined in Rule 144A under the U.S. Securities Act ("Rule 144A") in transactions exempt from, or not subject to, the registration requirements

of the U.S. Securities Act; and (ii) outside the United States in "offshore transactions" as defined in, and in compliance with, Regulation S

under the U.S. Securities Act ("Regulation S") and on exemptions provided by Directive 2003/71/EC (including Directive 2010/73/EU and

together with any relevant implementing measure, the "Prospectus Directive") in Member States of the European Economic Area (the "EEA")

that have implemented the Prospectus Directive (each, a "Relevant Member State"), in each case, in compliance with any applicable laws and

regulations. The distribution of this Prospectus and the offer of the Subscription Rights and offer and sale of the Offer Shares in certain

jurisdictions may be restricted by law.

For more information regarding restrictions in relation to the Subsequent Offering, see Section 18 "Selling and transfer restrictions".

The due date for the payment of the Offer Shares is expected to be on or about 16 November 2016. Delivery of the Offer Shares is expected to take place on

or about 17 November 2016 through the facilities of the VPS. Trading in the Private Placement Shares on the Oslo Stock Exchange is expected to commence

on or about 27 October 2016, while trading in the Offer Shares on the Oslo Stock Exchange is expected to commence on or about 18 November 2016.

Joint Bookrunners

Danske Bank ABN AMRO DNB Markets Nordea Markets

Joint Managers

Credit Agricole CIB SEB Swedbank

The date of this Prospectus is 26 October 2016

Avance Gas Holding Ltd – Prospectus

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IMPORTANT INFORMATION

This Prospectus has been prepared in connection with the Subsequent Offering and the listing of the Offer Shares and the Private Placement Shares on the

Oslo Stock Exchange.

This Prospectus has been prepared to comply with the Norwegian Securities Trading Act of 29 June 2007 no. 75 (the "Norwegian Securities Trading Act")

and related secondary legislation, including the Commission Regulation (EC) no. 809/2004 implementing Directive 2003/71/EC of the European Parliament

and of the Council of 4 November 2003 regarding information contained in prospectuses, as amended, and as implemented in Norway (the "EU Prospectus

Directive"). This Prospectus has been prepared solely in the English language. The Financial Supervisory Authority of Norway (Nw.: Finanstilsynet) (the

"Norwegian FSA") has reviewed and approved this Prospectus in accordance with Sections 7-7 and 7-8 of the Norwegian Securities Trading Act. The

Norwegian FSA has not controlled or approved the accuracy or completeness of the information included in this Prospectus. The approval by the Norwegian

FSA is dated 26 October 2016 and only relates to the information included in accordance with pre-defined disclosure requirements. The Norwegian FSA has

not made any form of control or approval relating to corporate matters described in or referred to in this Prospectus.

The Company is incorporated under the laws of Bermuda. In order to facilitate the registration and trading of the Shares on the Oslo Stock Exchange, the

Company has entered into a registrar agreement (the "Registrar Agreement") with DNB Bank ASA (the "VPS Registrar") for the registration of the

beneficial interests in the Shares, including the Private Placement Shares and the Offer Shares, in book-entry form with the VPS. Under the Registrar

Agreement, the VPS Registrar is, in respect of the existing Shares, including the Private Placement Shares, and will be, in respect of the Offer Shares,

registered as holder of such Shares in the Register of Members of the Company that the Company is required to maintain in Bermuda pursuant to the

Companies Act 1981, as amended of Bermuda (the "Bermuda Companies Act"). Under the Registrar Agreement, the VPS Registrar will register the

beneficial interests in such Shares in book-entry form in the VPS. Therefore, it is not the Shares issued in accordance with the Bermuda Companies

Act that will be delivered to investors being allocated Offer Shares in the Subsequent Offering, but the beneficial interests in such Shares

registered in the VPS (in book-entry form). Unless indicated otherwise, or the context otherwise requires, references in this Prospectus to "Shares",

"Private Placement Shares" or "Offer Shares" are to the beneficial interests in the Shares registered in book-entry form with the VPS. For a further description

of the VPS registration of the Shares, see Section 14.6 "VPS registration of the Shares".

For definitions of certain other terms used throughout this Prospectus, see Section 20 "Definitions and glossary".

The Company has engaged ABN AMRO Bank N.V. (“ABN AMRO”), Danske Bank, Norwegian Branch ("Danske Bank"), DNB Markets, a part of DNB Bank ASA

("DNB Markets") and Nordea Markets, a part of Nordea Bank Norge ASA ("Nordea Markets") as "Joint Bookrunners" and Credit Agricole CIB, Skandinaviska

Enskilda Banken AB (publ.), Oslo Branch ("SEB") and Swedbank Norway, a branch of Swedbank AB (publ.) ("Swedbank") as "Joint Managers". The Joint

Bookrunners and the Joint Managers are collectively referred to herein as the "Managers".

The information contained herein is current as at the date hereof and subject to change, completion and amendment without notice. In accordance with

Section 7-15 of the Norwegian Securities Trading Act, significant new factors, material mistakes or inaccuracies relating to the information included in this

Prospectus, which are capable of affecting the assessment by investors of the Offer Shares between the time of approval of this Prospectus by the Norwegian

FSA and the listing of the Offer Shares on the Oslo Stock Exchange, will be included in a supplement to this Prospectus. Neither the publication nor distribution

of this Prospectus, nor the sale of any Offer Share, shall under any circumstances imply that there has been no change in the Group's affairs or that the

information herein is correct as at any date subsequent to the date of this Prospectus.

No person is authorised to give information or to make any representation concerning the Group or in connection with the Private Placement, the Subsequent

Offering, or the sale of the Offer Shares other than as contained in this Prospectus. If any such information is given or made, it must not be relied upon as

having been authorised by the Company or the Managers or by any of the affiliates, representatives, advisors or selling agents of any of the foregoing.

Information on the website of Avance Gas or any of its affiliates, any website directly or indirectly linked thereto or any other website mentioned in this

Prospectus is not incorporated by reference into this Prospectus and prospective investors should not rely on any such website in making their decision to

invest in the Offer Shares.

The distribution of this Prospectus and the offer and sale of the Offer Shares and the granting or use of the Subscription Rights in certain

jurisdictions may be restricted by law. This Prospectus does not constitute an offer of, or an invitation to purchase, any of the Offer Shares in

any jurisdiction in which such offer, sale or subscription would be unlawful. Neither this Prospectus nor any advertisement or any other

offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with applicable

laws and regulations. Persons in possession of this Prospectus are required to inform themselves about and to observe any such restrictions.

In addition, the Shares are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted

under applicable securities laws and regulations. Investors should be aware that they may be required to bear the financial risks of this

investment for an indefinite period of time. Any failure to comply with these restrictions may constitute a violation of applicable securities

laws. See Section 18 "Selling and transfer restrictions".

By accepting delivery of this Prospectus, each holder of Subscription Rights or representative of such holder acknowledges that such holder or

representative, including a depositary bank, may not exercise Subscription Rights on behalf of any person that is located in a jurisdiction in

which it would not be permissible to make an offer of the Offer Shares and any such representative, including a depositary bank, will be

required, in connection with any exercise of Subscription Rights, to certify that such exercise is not on behalf of such a person and is

otherwise in accordance with the restrictions on the offer and sale of Offer Shares set forth in this Prospectus in Section 18 "Selling and

transfer restrictions".

This Prospectus and the terms and conditions of the Subsequent Offering as set out herein and any sale and purchase of Offer Shares and the granting and

use of Subscription Rights hereunder shall be governed by and construed in accordance with Norwegian law. The courts of Norway, with Oslo as legal venue,

shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Subsequent Offering or this Prospectus.

In making an investment decision, prospective investors must rely on their own examination, and analysis of, and enquiry into the Group and

the terms of the Subsequent Offering, including the merits and risks involved. None of the Company or the Managers, or any of their respective

representatives or advisers, is making any representation to any offeree or purchaser of the Offer Shares or Subscription Rights regarding the legality of an

investment in the Offer Shares by such offeree or purchaser under the laws applicable to such offeree or purchaser. Each investor should consult with his or

her own advisors as to the legal, tax, business, financial and related aspects of a purchase of the Offer Shares.

All Sections of the Prospectus should be read in context with the information included in Section 4 "General information".

Consent under the Exchange Control Act 1972 (and its related regulations) has been obtained from the Bermuda Monetary Authority for the

issue and transfer of the Shares and issue of the Subscription Rights to residents and non-residents of Bermuda for exchange control

purposes provided that the Shares are listed on certain specified stock exchanges, such an appointed stock exchange includes the Oslo Stock

Exchange or any other appointed stock exchange (as such term is defined in the Bermuda Companies Act) (an "Appointed Stock Exchange")

on or within fourteen days of the relevant issue or transfer. In granting such consent, neither the Bermuda Monetary Authority, the Registrar

of Companies nor any other relevant Bermuda authority or government body accepts any responsibility for the Company's financial

soundness, performance, creditworthiness or the correctness of any of the statements made or opinions expressed in this Prospectus.


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NOTICE TO NEW HAMPSHIRE RESIDENTS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE

NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED

OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE

THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT

AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN

ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR

TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY

REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED STATES

Because of the following restrictions, prospective investors are advised to consult legal counsel prior to making any offer, resale, pledge or

other transfer of the Offer Shares. The Offer Shares and the Subscription Rights have not been and will not be registered under the U.S.

Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States and, subject to certain

exceptions, may not be offered, sold, exercised, pledged, delivered or otherwise transferred directly or indirectly, in or into the United States

except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in

compliance with any applicable state securities laws. All offers and sales in the United States will be made only to QIBs in reliance on Rule

144A or pursuant to another exemption from, or in transactions not subject to, the registration requirements of the U.S. Securities Act. All

offers and sales outside the United States will be made in "offshore transactions" as defined in, and in reliance on, Regulation S. Prospective

purchasers are hereby notified that sellers of Offer Shares may be relying on the exemption from the provisions of Section 5 of the U.S.

Securities Act provided by Rule 144A. See Section 18.2 "United States".

Any Offer Shares or Subscription Rights offered or sold in the United States will be subject to certain transfer restrictions and each purchaser will be deemed

to have made acknowledgements, representations and agreements, as set forth under Section 18.2 "United States".

Neither the Offer Shares nor the Subscription Rights have been recommended by any United States federal or state securities commission or regulatory

authority. Furthermore, the foregoing authorities have not passed judgment upon the merits of the Subsequent Offering or confirmed the accuracy or

determined the adequacy of this Prospectus. Any representation to the contrary is a criminal offense under the laws of the United States.

In the United States, this Prospectus is being furnished on a confidential basis solely for the purposes of enabling a prospective investor to consider

purchasing the Offer Shares. The information contained in this Prospectus has been provided by the Company and other sources identified herein. Distribution

of this Prospectus to any person other than the offeree specified by the Managers or their representatives, and those persons, if any, retained to advise such

offeree with respect thereto, is unauthorised and any disclosure of its contents, without prior written consent of the Company, is prohibited. This Prospectus is

personal to each offeree and does not constitute an offer to any other person or to the public generally to purchase Offer Shares or subscribe for or otherwise

acquire the Offer Shares. Investors confirm their agreement to the foregoing by accepting the delivery of this Prospectus.

To the extent that any of the Managers intends to effect any offers or sales of shares in the United States or to U.S. persons, it will do so through its

respective U.S. registered broker-dealer affiliates, pursuant to applicable U.S. securities laws.

NOTICE TO INVESTORS IN THE UNITED KINGDOM

This Prospectus is only being distributed to and is only directed at (i) persons who are outside the United Kingdom (the "UK") or (ii) investment professionals

falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth companies,

and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as

"Relevant Persons"). The Subscription Rights and the Offer Shares are only available to, and any invitation, offer or agreement to subscribe, purchase or

otherwise acquire such will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this Prospectus or

any of its contents.

Each Manager has represented, warranted and agreed (i) that it has only communicated or caused to be communicated and will only communicate or cause to

be communicated an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act

2000 (the "FSMA")) received by it in connection with the issue or sale of the Offer Shares or the Subscription Rights in circumstances in which section 21(1)

of the FSMA does not apply to the Company and (ii) that it has complied and will comply with all applicable provisions of the FSMA with respect to anything

done by it in relation to the Offer Shares and the Subscription Rights in, from or otherwise involving the UK.

NOTICE TO INVESTORS IN THE EEA

In any member state of the EEA that has implemented the EU Prospectus Directive, other than Norway (each, a Relevant Member State), this communication

is only addressed to and is only directed at qualified investors in that Member State within the meaning of the EU Prospectus Directive. The Prospectus has

been prepared on the basis that all offers of Subscription Rights and Offer Shares outside Norway will be made pursuant to an exemption under the EU

Prospectus Directive from the requirement to produce a prospectus for offer of securities. Accordingly, any person making or intending to make any offer

within the EEA of Offer Shares which is the subject of the Subsequent Offering contemplated in this Prospectus within any EEA member state (other than

Norway) should only do so in circumstances in which no obligation arises for the Company or the Managers to publish a prospectus or a supplement to a

prospectus under the EU Prospectus Directive for such offer. Neither the Company nor the Managers have authorised, nor do they authorise, the making of

any offer of Shares through any financial intermediary.

Each person in a Relevant Member State other than, in the case of paragraph (a), persons receiving offers contemplated in this Prospectus in Norway, who

receives any communication in respect of, or who acquires any Offer Shares under, the offers contemplated in this Prospectus will be deemed to have

represented, warranted and agreed to and with the Managers and the Company that:

a) it is a qualified investor as defined in the EU Prospectus Directive; and

b) in the case of any Offer Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the EU Prospectus Directive, (i)

such Offer Shares acquired by it in the Subsequent Offering have not been acquired on behalf of, nor have they been acquired with a view to

their offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is defined in the EU Prospectus

Directive, or in circumstances in which the prior consent of the Managers have been given to the offer or resale; or (ii) where such Offer Shares

have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those Offer Shares to it

is not treated under the EU Prospectus Directive as having been made to such persons.

For the purposes of this provision, the expression an "offer to the public" in relation to any of the Offer Shares in any Relevant Member State means the

communication in any form and by any means of sufficient information on the terms of the offer and any securities to be offered so as to enable an investor to

decide to purchase any of the Offer Shares, as the same may be varied in that Relevant Member State by any measure implementing the EU Prospectus

Directive in that Relevant Member State, and the expression "EU Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the


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2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant

Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.

See Section 18 "Selling and transfer restrictions" for certain other notices to investors.

ENFORCEMENT OF CIVIL LIABILITIES

The Company is an exempted company limited by shares incorporated under the laws of Bermuda. As a result, the rights of holders of the Company's Shares

will be governed by Bermuda law and the Company's memorandum of association and bye-laws (the "Bye-laws"). The rights of shareholders under Bermuda

law may differ from the rights of shareholders of companies incorporated in other jurisdictions. The Company's directors and the Group's executive officers are

not residents of the United States, and a substantial portion of the Company's assets are located outside the United States. As a result, it may be difficult for

investors in the United States to effect service of process on the Company or its directors and executive officers in the United States or to enforce in the

United States judgments obtained in U.S. courts against the Company or those persons, including judgments based on the civil liability provisions of the

securities laws of the United States or any State or territory within the United States. It is doubtful whether courts in Norway or Bermuda will enforce

judgments obtained in other jurisdictions, including the United States, against the Company or its directors or officers under the securities laws of those

jurisdictions or entertain actions in Norway or Bermuda against the Company or its directors or officers under the securities laws of other jurisdictions. In

addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable in Norway or Bermuda. The United States

does not currently have a treaty providing for reciprocal recognition and enforcement of judgements (other than arbitral awards) in civil and commercial

matters with either Norway or Bermuda.

AVAILABLE INFORMATION

The Company has agreed that, for so long as any of the Offer Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the U.S. Securities

Act, it will during any period in which it is neither subject to Sections 13 or 15(d) of the United States Securities Exchange Act of 1934, as amended (the "U.S.

Exchange Act"), nor exempt from reporting pursuant to Rule 12g3-2(b) under the U.S. Exchange Act, provide to any holder or beneficial owners of Shares,

or to any prospective purchaser designated by any such registered holder, upon the request of such holder, beneficial owner or prospective owner, the

information required to be delivered pursuant to Rule 144A(d)(4) of the U.S. Securities Act.


1

TABLE OF CONTENTS

1 SUMMARY ....................................................................................................................................... 2

2 RISK FACTORS .............................................................................................................................. 10

3 RESPONSIBILITY FOR THE PROSPECTUS ........................................................................................... 24

4 GENERAL INFORMATION ................................................................................................................. 25

5 DIVIDENDS AND DIVIDEND POLICY ................................................................................................. 29

6 REASONS FOR THE PRIVATE PLACEMENT AND THE SUBSEQUENT OFFERING ......................................... 30

7 INDUSTRY AND MARKET OVERVIEW ................................................................................................. 31

8 BUSINESS OF THE GROUP ............................................................................................................... 36

9 CAPITALISATION AND INDEBTEDNESS ............................................................................................. 42

10 SELECTED FINANCIAL AND OTHER INFORMATION .............................................................................. 44

11 OPERATING AND FINANCIAL REVIEW ............................................................................................... 50

12 BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE ............................ 70

13 RELATED PARTY TRANSACTIONS ..................................................................................................... 77

14 CORPORATE INFORMATION AND DESCRIPTION OF THE SHARE CAPITAL............................................... 79

15 SECURITIES TRADING IN NORWAY .................................................................................................. 90

16 TAXATION ..................................................................................................................................... 94

17 THE COMPLETED PRIVATE PLACEMENT AND THE TERMS OF THE SUBSEQUENT OFFERING ...................... 97

18 SELLING AND TRANSFER RESTRICTIONS ........................................................................................ 106

19 ADDITIONAL INFORMATION .......................................................................................................... 110

20 DEFINITIONS AND GLOSSARY ....................................................................................................... 112

APPENDICES

APPENDIX A BYE-LAWS OF AVANCE GAS HOLDING LTD ............................................................................................ A1

APPENDIX B SUBSCRIPTION FORM FOR THE SUBSEQUENT OFFERING ........................................................................ B1


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1 SUMMARY

Summaries are made up of disclosure requirements known as "Elements". These Elements are numbered in Sections

A– E (A.1 – E.7) below. This summary contains all the Elements required to be included in a summary for this type of

securities and the Issuer. Because some Elements are not required to be addressed, there may be gaps in the

numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary

because of the type of securities and issuer, it is possible that no relevant information can be given regarding the

Element. In this case a short description of the Element is included in the summary with the mention of "not

applicable".

Section A – Introduction and Warnings

A.1 Warning This summary should be read as introduction to the Prospectus;

any decision to invest in the securities should be based on consideration of

the Prospectus as a whole by the investor;

where a claim relating to the information contained in the Prospectus is

brought before a court, the plaintiff investor might, under the national

legislation of the Member States, have to bear the costs of translating the

Prospectus before the legal proceedings are initiated; and

civil liability attaches only to those persons who have tabled the summary

including any translation thereof, but only if the summary is misleading,

inaccurate or inconsistent when read together with the other parts of the

Prospectus or it does not provide, when read together with the other parts

of the Prospectus, key information in order to aid investors when

considering whether to invest in such securities.

A.2 Warning Not applicable. No consent is granted by the Company for the use of the

Prospectus for subsequent resale or final placement of the Shares or the

Subscription Rights.

Section B - Issuer

B.1 Legal and commercial name Avance Gas Holding Ltd.

B.2 Domicile and legal form,

legislation and country of

incorporation

The Company was incorporated on 29 January 2010 as an exempted

company limited by shares under the laws of Bermuda in accordance with

the Bermuda Companies Act.

B.3 Current operations,

principal activities and

markets

The Group is one of the leading providers of marine transportation of fully

refrigerated LPG based on the number of vessels owned (see figure 6 in

Section 7.3.2 "Vessel supply"). As of the date of this Prospectus, the

Group owns and operates a fleet consisting of 14 VLGCs. The business is

currently focused on the transportation of LPG for oil and gas majors, LPG

importers and LPG traders. Currently, all of the Group's ships operate in

the spot market on a voyage charter basis or shorter time charter

contracts. A voyage charter is typically a single round trip that is priced on

a current spot market value. The Group receives one payment upon

completion discharging derived by multiplying the tons of cargo loaded on

board by the agreed upon freight rate expressed on a per cargo ton basis.

The Group is responsible for the payment of all expenses, including voyage

expenses (e.g. bunker fuel, agency, security and port costs), operating

expenses and capital costs of the vessel.

B.4a Significant recent trends Below is an overview of the developments and trends in the Group's

business since 31 December 2015:

The VLGC freight market has remained volatile, and spot freight rates

have in general been trending negatively, partly driven by deliveries of

newbuildings. The Group has responded to the market situation by cutting

dividend payments, first by 50% and then to zero, by pursuing cost-

cutting initiatives, and by intensifying the efforts to retrieve outstanding


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demurrage receivables.

In September 2016, Avance Gas reached an agreement to sell the 1980-

built LNG carrier Gaea, with delivery and payment in December 2016. The

sale proceeds correspond to the book value and will generate

approximately USD 13.3 million in net cash proceeds, further

strengthening the liquidity of the Group. As of 30 September 2016, the

Company had a cash position of USD 88 million and is in compliance with

all its financial covenants. However, the current VLGC spot rates are below

cash break-even levels for the Company estimated to be USD 17,896 per

day for 2017 (taking into account the interest rate swap agreements

commencing in Q2 2017), and based on expected newbuilding deliveries to

the global VLGC fleet, as further set out in Section 7 "Industry and market

overview", the spot rates could potentially remain below break-even levels

for a prolonged period. This would lead to a deteriorating cash position and

potentially to a breach of the minimum liquidity covenant of the Company.

In addition, a potential further decline in asset values could potentially

lead to a breach of the minimum value to outstanding loan covenants of

the Company.

While the Company remains positive to the long-term fundamentals of the

LPG freight market, the Company concluded that it was required to

address the financial position of the Company, in particular the bank debt

amortisation schedule, the cash position of the Company and the

covenants in the bank debt, in order to remove uncertainty for all

stakeholders and remain compliant with its financial covenants even in a

scenario where the freight market remains challenging for the next two

and a half years. As a result, on 19 October 2016, the Group agreed with

its lending banks to certain amendments to its bank loan facilities in order

to prepare the Group for a scenario with a prolonged market downturn and

on 25 October 2016 the Private Placement was completed. See Section

11.8.2 "The Bank Debt Amendments" for a description of the amendments

to the bank loan facilities and Section 17.1 "The completed Private

Placement" for a description of the Private Placement.

B.5 Description of the Group The Company is a holding company and the operations of the Group are

carried out through the operating subsidiaries of the Company.

B.6 Interests in the Company

and voting rights

As of 20 October 2016, the Company had 4,122 shareholders. The

Company's 20 largest shareholders as of the same date (i.e. prior to the

issuance of the Private Placement Shares) are shown in the table below.

# Shareholders Number of Shares Percent

1 Stolt-Nielsen Gas Limited ............................................................ 2,478,799 7.03%

2 Sungas Holdings Ltd .................................................................... 2,478,799 7.03%

3 Hemen Holding Limited ................................................................ 1,687,251 4.78%

4 Nordnet Bank AB ......................................................................... 1,401,876 3.97%

5 Folketrygdfondet ......................................................................... 1,082,854 3.07%

6 Danske Bank A/S ........................................................................ 1,011,522 2.87%

7 Pioneer Multi-Asset Income Fnd .................................................... 931,575 2.64%

8 Avance Gas Holding Ltd ............................................................... 871,639 2.47%

9 State Street Bank & Trust Company .............................................. 606,366 1.72%

10 Avanza Bank AB .......................................................................... 602,527 1.71%

11 The Bank of New York Mellon SA/NV .............................................. 571,284 1.62%

12 Barclays Capital Inc ..................................................................... 557,928 1.58%

13 Skandinaviska Enskilda Banken AB ................................................ 517,422 1.47%

14 Morgan Stanley & Co. International ............................................... 507,240 1.44%

15 UBS Switzerland AG .................................................................... 505,370 1.43%

16 Goldman, Sachs & Co. ................................................................. 455,055 1.29%

17 State Street Bank & Trust Company .............................................. 421,369 1.19%

18 Jefferies LLC ............................................................................... 412,500 1.17%

19 Jolly Roger AS ............................................................................ 390,000 1.11%

20 Swedbank Generator ................................................................... 350,000 0.99%


4

Top 20 shareholders ................................................................. 17,841,376 50.57%

Others ......................................................................................

17,436,596 49.43%

Total .........................................................................................

35,277,972 100.00%

Shareholders owning 5% or more of the Shares have an interest in the

Company's share capital which is notifiable pursuant to the Norwegian

Securities Trading Act. See Section 15.7 "Disclosure obligations" for a

description of the disclosure obligations under the Norwegian Securities

Trading Act. As of the date of this Prospectus (i.e. after the issuance of the

Private Placement Shares) and as far as the Company is aware, no

shareholder, other than Stolt-Nielsen Gas Ltd (8.8%), Sungas Holdings Ltd

(8.8%) and Hemen Holding Limited (8.7%), holds more than 5% of more

of the issued Shares.

Each of the Shares carries one vote. There are no differences in voting

rights between the Shares.

The Company is not aware of any persons or entities who, either directly

or indirectly, exercise control over the Company. Further, the Company is

not aware of any arrangements the operation of which may at a

subsequent date result in a change of control of the Company.

B.7 Selected historical key

financial information

The following selected financial information has been derived from (i) the

Company's audited consolidated financial statements (a) as of, and for the

year ended, 31 December 2015, (b) as of, and for and the thirteen month

period ended 31 December 2014 and (c) as of, and for the financial year

ended 30 November 2013 (the Financial Statements) and (ii) the

Company's unaudited consolidated interim financial statements as at, and

for the three and nine month periods ended, 30 September 2016 and 2015

(the Interim Financial Statements).

The Financial Statements have been prepared in accordance with IFRS,

while the Interim Financial Statements have been prepared in accordance

with IAS 34.

The selected consolidated financial information included herein should be

read in connection with, and is qualified in its entirety by reference to the

Financial Information incorporated by reference hereto, see Section 19.3

"Incorporation by reference".

In USD thousand Three months ended

30 September

Nine months ended

30 September

Twelve

months

ended 31

December

Thirteen

months

ended 31

December

Twelve

months

ended 30

November

Selected statement of

comprehensive income

2016

(unaudited)

2015

(unaudited)

2016

(unaudited)

2015

(unaudited)

2015

(audited)

2014

(audited)

2013

(audited)

Operating revenue ................................................................................................. 25,720 109,943 116,119 226,751 310,873 180,406 115,000

Operating profit before depreciation

expense ............................................................................................................... 1,750 85,308 45,332 168,278 227,673 109,130 46,840

Operating profit (loss) ............................................................................................ (55,944) 76,475 (39,547) 146,527 196,190 88,192 23,173

Profit (loss) before income tax ................................................................................ (60,739) 72,831 (54,140) 138,029 183,169 81,977 11,502

Net profit (loss) ..................................................................................................... (60,739) 72,831 (54,140) 138,022 183,161 81,767 11,502

Other comprehensive income (loss) ......................................................................... 1,018 (9,896) (16,815) (10,158) (7,434) (96) (50)

Total comprehensive income (loss) .......................................................................... (59,721) 62,935 (70,955) 127,864 175,727 81,671 11,452

In USD thousand As at

30 September

As at

31 December

As at 30

November

Selected statement of financial position 2016

(unaudited)

2015

(audited)

2014

(audited)

2013

(audited)

Total current assets ............................................................................................... 127,841 150,790 190,028 224,200

Total non-current assets ......................................................................................... 870,447 968,004 507,243 380,597

Total assets .......................................................................................................... 998,288 1,118,794 697,271 604,797

Total current liabilities ............................................................................................ 52,109 102,844 23,377 78,688

Total non-current liabilities ..................................................................................... 549,609 516,005 165,391 133,744


5

Total shareholders' equity ....................................................................................... 396,570 499,945 508,503 392,365

Total liabilities and shareholders' equity ................................................................... 998,288 1,118,794 697,271 604,797

In USD thousand Nine months ended

30 September

Twelve

months

ended 31

December

Thirteen

months

ended 31

December

Twelve

months

ended 30

November

Selected statement of cash flows 2016

(unaudited)

2015

(unaudited)

2015

(audited)

2014

(audited)

2013

(audited)

Net cash generated by operating activities ................................................................ 84,521 116,192 167,167 86,706 35,700

Net cash provided by (used in) investing activities ..................................................... (1,036) (433,850) (491,520) (143,970) 126,756

Net cash (used in) provided by financing activities ..................................................... (65,722) 218,738 232,333 19,676 7,237

Net (decrease) increase in cash and cash equivalents ................................................ 17,750 (98,932) (92,246) (37,604) 169,651

Cash and cash equivalents at beginning of period ...................................................... 70,033 162,279 162,279 199,883 30,232

Cash and cash equivalents at end of period............................................................... 87,783 63,347 70,033 162,279 199,883

B.8 Selected key pro forma

financial information

Not applicable. No pro forma financial information has been prepared.

B.9 Profit forecast or estimate Not applicable. No profit forecast or estimate is made.

B.10 Audit report qualifications Not applicable. There are no qualifications in the audit reports.

B.11 Insufficient working capital Not applicable. The Company is of the opinion that the working capital

available to the Group is sufficient for the Group's present requirements,

for the period covering at least 12 months from the date of this

Prospectus.

Section C - Securities

C.1 Type and class of securities

admitted to trading and

identification number

The Company has one class of Shares in issue, and all Shares in that class

have equal rights to all such other Shares in that class as set out in the

Company's Bye-laws.

The Shares have been created under the Bermuda Companies Act and

beneficial interests in the Shares are registered in book-entry form in the

VPS under ISIN BMG067231032. The Private Placement Shares have, from

the date they were issued and until the date of this Prospectus, been

registered with ISIN BMG067231115, which is different from the ISIN

number of the existing Shares, thus ensuring that the Private Placement

Shares cannot be traded on the Oslo Stock Exchange. The Private

Placement Shares will assume the ISIN number of the Company's existing

Shares, being ISIN BMG067231032 following publication of this

Prospectus.

All the Shares rank in parity with one another and carry one vote per

Share.

C.2 Currency of issue The Shares are issued in USD, but are quoted and traded in NOK on the

Oslo Stock Exchange.

C.3 Number of shares in issue

and par value

As at the date of this Prospectus, Avance Gas' authorised share capital is

USD 200,000,000 consisting of 200,000,000 Shares with a nominal value

of USD 1.00 each, of which 62,027,972 Shares have been issued and fully

paid.

C.4 Rights attaching to the

securities

Pursuant to the Bye-laws, the holders of Shares have no pre-emptive,

redemption, conversion or sinking fund rights. The holders of Shares are

entitled to one vote per Share on all matters submitted to a vote of the

holders of Shares.

Under Bermuda law, a company may not declare or pay dividends if there

are reasonable grounds for believing that: (i) the company is, or would

after the payment be, unable to pay its liabilities as they become due; or

(ii) the realisable value of its assets would thereby be less than its


6

liabilities. Under the Bye-laws, each of the Shares is entitled to such

dividends as the Board of Directors may from time to time declare.

C.5 Restrictions on transfer The Bye-laws provide that the Board of Directors may refuse to register

the transfer of any interest in any Share in the register of members and

may direct any registrar to decline to register the transfer where such

transfer would result in 50% or more of the shares or votes in the

Company being held or owned directly or indirectly by individuals or legal

persons resident for tax purposes in Norway or connected to a Norwegian

business activity or the Company otherwise being deemed a "Controlled

Foreign Company" as such term is defined under the Norwegian tax rules.

Subject to the above, but notwithstanding anything to the contrary in the

Bye-laws, shares that are listed or admitted to trading on an appointed

stock exchange may be transferred in accordance with the rules and

regulations of such exchange. Where applicable, all transfers of

uncertificated shares shall be made in accordance with and be subject to

the facilities and requirements of the transfer of title to shares in that class

by means of the VPS or any other relevant system concerned and, subject

thereto, in accordance with any arrangements made by the Board of

Directors in accordance with the Bye-laws. The Board of Directors shall

refuse any transfer unless the registration of such transfer satisfies all

applicable consents, authorisations and permissions of any governmental

body or agency in Bermuda. The Board of Directors may also refuse to

recognise an instrument of transfer of a share unless it is accompanied by

the relevant share certificate (if one has been issued) and such other

evidence of the transferor's right to make the transfer as the Board of

Directors shall reasonably require.

See also Section 18 "Selling and transfer restrictions".

C.6 Admission to trading The Shares are, and the Private Placement Shares and the Offer Shares

will be, admitted to trading on the Oslo Stock Exchange. The Company

currently expects commencement of trading in the Private Placement

Shares on the Oslo Stock Exchange on or around 27 October 2016 and

trading in the Offer Shares on the Oslo Stock Exchange on or around 18

November 2016. The Company has not applied for admission to trading of

the Shares on any other stock exchange or regulated market.

C.7 Dividend policy The Company's objective is to generate competitive returns to its

shareholders. The Company's dividend policy is balanced between growth

opportunities for the Company and cash returns for the shareholders.

Whilst it is the intention to pay regular dividends, the level of any dividend

will be guided by current earnings, market prospects, current and future

capital expenditure commitments and investment opportunities, as well as

any restrictions to pay dividends included in the Group's credit facilities.

Section D - Risks

D.1 Key risks specific to the

Company or its industry

The following is a summary of key risks that relate to the industry in which

the Group operates, the Group, the Group's operations, laws, regulations

and litigation and financing and market risks. Investors should read,

understand and consider all risk factors in this Prospectus, which should be

read in their entirety, before making a decision to invest in the Offer

Shares.

Risks related to the industry in which the Group operates

The Group's business, financial condition and results of operations

depend on the level of activity in the LPG industry

A worsening in global economic conditions could materially and

adversely affect the Group's business, financial condition and results

of operations


7

A substantial number of VLGCs are on order which will lead to an

increase in the global VLGC fleet, and which may lead to a reduction

in LPG freight rates and have a material adverse impact on the

Group's business, financial condition and results of operations

Competition within the LPG shipping industry could have a material

adverse effect on the Group's ability to market its services

Charter rates may fluctuate substantially and if rates stay low for a

prolonged period, the Group's revenues and cash flows may be

adversely affected

The Group's operations may be affected by political, governmental

and economic instability which may adversely affect the Group's

business

Risks related to the Group

The Group may not be able to successfully implement its strategies

Due to the Group's undiversified exposure towards the LPG market,

adverse developments in the LPG shipping industry would have a

significantly greater impact on the Group's financial condition, results

of operations and cash flows than if the Group maintained a more

diverse fleet of ships

The market value of the Group's current ships and those it acquires in

the future may decrease, which could, among other things, cause the

Group to be in non-compliance with its loan covenants or to incur

losses if it decides to sell them following a decline in their market

values

Risks related to the Group's operations

The Group's operating and maintenance costs may not necessarily

fluctuate in proportion to changes in operating revenues

The Group's business involves numerous operating hazards and the

Group's own insurance may not be adequate to cover the Group's

losses

The Group's ships are exposed to technical risk and down-time or off-

hire

Failure to secure future employment for the Group's ships could have

a material adverse effect on the Group's results of operation, cash

flow and financial condition

The required maintenance and dry-docking of the Group's ships could

be more expensive and time consuming than originally anticipated

Seasonal fluctuations could have a material adverse effect on the

Group's business, financial condition, results of operations and cash

flows

Risks related to laws, regulations and litigation

The Group may be subject to litigation and disputes that could have a

material adverse effect on the Group's business, financial condition,

results of operations and cash flows

Laws and regulations could hinder or delay the Group's operations,

increase the Group's operating costs, reduce demand for its services

and restrict its ability to operate its ships or otherwise

A change in tax laws of any country in which the Group operates from

time to time, or complex tax laws associated with international

operations which the Group may undertake from time to time, could

increase the effective tax rate of the Group

Risks related to financing and market risk

The Bank Debt Amendments and the Private Placement may not be

sufficient and the Group may require additional capital in the future in


8

order to execute its growth strategy or for other purposes, which may

not be available on favourable terms, or at all

The Group will require additional capital in the future in order to

execute its growth strategy, which may not be available on favourable

terms, or at all

The Group's existing or future debt arrangements could limit the

Group's liquidity and flexibility in obtaining additional financing, in

pursuing other business opportunities or corporate activities or Avance

Gas' ability to declare dividends to its shareholders

Interest rate fluctuations could affect the Group's cash flow and

financial condition

Fluctuations in exchange rates could affect the Group's cash flow and

financial condition

D.3 Key risks specific to the

securities

The following is a summary of key risks that relate to the Shares, the

Subsequent Offering and the Company's incorporation in Bermuda.

Investors should read, understand and consider all risk factors in this

Prospectus, which should be read in their entirety, before making a

decision to invest in the Offer Shares.

Risks related to the Shares

The price of the Shares may fluctuate significantly

Future issuances of Shares or other securities may dilute the holdings

of shareholders and could materially affect the price of the Shares

Exchange rate fluctuations could adversely affect the value of the

Shares and any dividends paid on the Shares for an investor whose

principal currency is not NOK

Avance Gas may be unable to pay any dividends in the future

Risks related to the Subsequent Offering

Eligible Shareholders who do not participate in the Subsequent

Offering may experience significant dilution in their shareholding

Risks related to the Company's incorporation in Bermuda

Investors may have difficulty enforcing any judgment obtained in

other jurisdictions than Bermuda against Avance Gas or its directors

or executive officers

Avance Gas has anti-takeover provisions in its Bye-laws that may

discourage a change of control

Section E – Offer

E.1 Net proceeds and estimated

expenses

The net proceeds from the Subsequent Offering are expected to be

approximately USD 5.0 million, assuming all Offer Shares are issued and a

USD/NOK exchange rate of 8.2.

The total costs and expenses related to the Subsequent Offering are

estimated to amount to USD 0.25 million, assuming all the Offer Shares

are issued and a USD/NOK exchange rate of 8.2.

E.2a Reasons for the Subsequent

Offering and use of

proceeds

The purpose of the Subsequent Offering is to enable the Eligible

Shareholders to subscribe for Shares in the Company at the same price as

in the Private Placement, thus limiting dilution of their shareholding.

The net proceeds from the Subsequent Offering will be used for general

corporate purposes and to further increase the Company's financial buffer

as the Company prepares for a prolonged market downturn.

E.3 Terms and conditions of the

Subsequent Offering

The Subsequent Offering consists of an offer by the Company to issue up

to 2,500,000 Offer Shares at a Subscription Price of NOK 17.00 per Offer

Share, thereby raising gross proceeds of up to NOK 42.5 million


9

(approximately USD 5.2 million based on a USD/NOK exchange rate of

8.2).

Eligible Shareholders will be granted non-transferable Subscription Rights

that, subject to certain limitations based on applicable laws and

regulations, provide preferential rights to subscribe for, and be allocated,

Offer Shares at the Subscription Price in the Subsequent Offering. Over-

subscription will be permitted; however, there can be no assurance that

Offer Shares will be allocated for such subscriptions. Subscription without

Subscription Rights is not permitted.

The Subscription Period will commence on at 09:00 hours (CET) on 27

October 2016 and end at 16:30 hours (CET) on 10 November 2016. The

Subscription Period may not be shortened or extended, unless required by

law.

The payment for Offer Shares allocated to a subscriber falls due on the

Payment Date (16 November 2016).

Subject to timely payment by the subscriber, delivery of the Offer Shares

allocated in the Subsequent Offering is expected to take place on or about

17 November 2016.

The Offer Shares will be listed on the Oslo Stock Exchange as soon as the

Offer Shares have been registered in the VPS. This is expected to take

place on or about 18 November 2016.

E.4 Material and conflicting

interests

The Managers or their affiliates have provided from time to time, and may

provide in the future, investment and commercial banking services to the

Company and its affiliates in the ordinary course of business, for which

they may have received and may continue to receive customary fees and

commissions. The Managers, their employees and any affiliate may

currently own Shares in the Company. Furthermore, in connection with the

Subsequent Offering, the Managers, their employees and any affiliate

acting as an investor for its own account may receive Subscription Rights

(if they are Eligible Shareholders) and may exercise its right to take up

such Subscription Rights and acquire Offer Shares, and, in that capacity,

may retain, purchase or sell Offer Shares and any other securities of the

Company or other investments for its own account and may offer or sell

such securities (or other investments) otherwise than in connection with

the Subsequent Offering. The Managers do not intend to disclose the

extent of any such investments or transactions otherwise than in

accordance with any legal or regulatory obligation to do so.

Furthermore, the Managers will receive fees in connection with the

Subsequent Offering and, as such, have an interest in the Subsequent

Offering. See Section 17.2.19 "Net proceeds and expenses related to the

Subsequent Offering" for information on fees to the Managers in

connection with the Subsequent Offering.

E.5 Selling shareholders and

lock-up agreements

There are no selling shareholders or lock-up agreements.

E.6 Dilution resulting from the

Subsequent Offering

The Subsequent Offering will result in an immediate dilution of

approximately 3.9% for Eligible Shareholders who do not participate in the

Subsequent Offering assuming all the Offer Shares are issued.

E.7 Estimated expenses

charged to investor

Not applicable. The expenses related to the Subsequent Offering will be

paid by the Company.


10

2 RISK FACTORS

An investment in the Offer Shares involves inherent risk. Before making an investment decision, investors should

carefully consider the risk factors and all information contained in this Prospectus, including the Financial Information

and related notes. The risks and uncertainties described in this Section 2 are the principal known risks and

uncertainties faced by the Group as of the date hereof that the Company believes are the material risks relevant to an

investment in the Offer Shares. An investment in the Offer Shares is suitable only for investors who understand the

risks associated with this type of investment and who can afford to lose all or part of their investment. The absence of

negative past experience associated with a given risk factor does not mean that the risks and uncertainties described

herein should not be considered prior to making an investment decision in respect of the Offer Shares. If any of the

following risks were to materialise, individually or together with other circumstances, they could have a material

adverse effect on the Group and/or its business, results of operations, cash flows, financial condition and/or prospects,

which may cause a decline in the value and trading price of the Offer Shares, resulting in the loss of all or part of an

investment in the same.

The order in which the risks are presented does not reflect the likelihood of their occurrence or the magnitude of their

potential impact on the Group's business, results of operations, cash flows, financial condition and/or prospects. The

risks mentioned herein could materialise individually or cumulatively. The information in this Section 2 is as of the date

of this Prospectus.

2.1 Risks related to the industry in which the Group operates

The Group's business, financial condition and results of operations depend on the level of activity in the

LPG industry

The Group's financial performance depends on the continued growth in global and regional shipments of liquefied

petroleum gas ("LPG"). The level of activity in the LPG industry is affected by a number of factors, including, but not

limited to the following factors:

Worldwide demand for and production of LPG;

Increase in the cost of LPG relative to the cost of naphtha and other competing feedstocks;

The availability of additional sources of LPG closer to the areas of LPG consumption (reduction in tonne-

miles);

The availability of alternative energy sources;

Expectations regarding future energy prices;

Government laws and regulations, including environmental protection laws and regulations;

Weather conditions;

Political and military conflicts;

Negative global or regional economic or political conditions, particularly in LPG consuming regions, which

could reduce energy consumption or growth in energy consumption; and

Technological changes that could make other sources of energy more competitive than LPG.

If the demand for LPG products and LPG shipping does not grow, or decrease, the Group's business, financial condition

and results of operations could be materially and adversely affected.

A worsening in global economic conditions could materially and adversely affect the Group's business,

financial condition and results of operations

Demand for LPG products fluctuates with changes in global economic activity, which in turn affects demand for LPG

ships. Slowdowns in global economic activity, particularly in LPG consuming regions, may materially and adversely

impact the LPG industry, including, among other things:


11

• Reducing the demand for LPG products and LPG shipping and hence charter rates or the availability of new

charters for ships;

• Decreasing the market values of ships;

• Reducing the availability of financing for ships; and

• Slowing the second-hand market for the sale of ships.

Any of the above events could materially and adversely affect the Group's business, financial condition and results of

operations.

The state of the global financial markets may materially and adversely impact the Group's ability to obtain

financing

Credit markets were distressed in 2008 and 2009, and have been volatile since that time. A worsening in the credit

markets may have a material adverse effect on the Group's ability to obtain additional financing on favourable terms

or at all, and could have a material adverse effect on the Group's business, financial condition and results of

operations, and may also negatively impact the Group's operations by affecting the solvency of its suppliers and/or

customers, which could lead to disruptions in the delivery of supplies, cost increases for supplies, accelerated

payments to suppliers, customer bad debts or reduced revenues.

A substantial number of VLGCs are on order which will lead to an increase in the global VLGC fleet, and

which may lead to a reduction in LPG freight rates and have a material adverse impact on the Group's

business, financial condition and results of operations

If the number of LPG ships delivered exceeds the number of ships being recycled, the global ship capacity will

increase. There is currently a substantial number of very large gas carriers ("VLGCs") on order, which will lead to an

increase in the global VLGC fleet of approximately 18% from the date of the Prospectus (such figure is an estimate

only and may change as a result of pre-cancellations and/or additional orders). The VLGC order book can also increase

further. If the demand for ships does not increase correspondingly with the future increase in the number of ships,

freight rates and ship utilisation could materially decline. Lower utilisation and freight rates due to an over-supply of

LPG ships could have a material adverse effect on the Group's business, financial condition and results of operations.

Prolonged periods of low utilisation and charter hire, which the LPG market has experienced in the past, could also

have a material adverse effect on the value of the Group's ships.

Competition within the LPG shipping industry could have a material adverse effect on the Group's ability

to market its services

The Group's ships are employed in a highly competitive market that is capital intensive and fragmented. Competition

for charters is intense, and at times the Group may potentially compete against other ship owners who have greater

resources than the Group. Competition for LPG shipping depends on price, location, size, age, condition and the

acceptability of the ship and its operators to prospective charterers. Due in part to the fragmented nature of the

market, competitors with greater resources could enter and operate larger fleets that may be able to offer lower

charter rates and higher quality ships than the Group is able to offer. The Group's operations may be materially and

adversely affected if its current competitors or new market entrants introduce new offerings with better features,

performance, prices or other characteristics than the Group can offer.

Increases in bunker fuel prices and other operating costs may significantly increase the Group's operating

costs

In accordance with industry practice, the Group is responsible for voyage expenses, including bunker fuel costs, when

operating its LPG ships. Increases in the cost of bunker fuel are subject to a number of economic, natural and political

factors affecting the level of crude oil prices in global markets that are beyond the Group's control, including worldwide

demand and supply imbalances, political instability and natural disasters in oil-producing regions. An increase in the

cost of bunker fuel could significantly increase operating costs for the Group's ships, which could have a material

adverse effect on the Group's results of operation to the extent that it is not able to increase its freight rates to

recover bunker fuel cost increases from its customers. Other operating expenses, such as for example crew costs, may

also fluctuate and affect the Group's profitability.


12

Charter rates may fluctuate substantially and if rates stay low for a prolonged period, the Group's

revenues and cash flows may be adversely affected

The Group operates its ships predominantly in the spot market where charter rates and cargo availability fluctuates

significantly and where seasonality can adversely impact the Groups earnings from time to time. Being dependent on

the spot market may leave the Group particularly vulnerable to short or long term swings in the freight market. The

spot charter rates are below the estimated cash break-even rate of USD 17,896 per day for 2017 (taking into account

the interest rate swap agreements commencing in Q2 2017).

The spot charter market may fluctuate significantly based upon LPG supply and demand. In addition, VLGC spot rates

are highly seasonal. The successful operation of the Group's ships in the competitive and highly volatile spot market

depends on, among other things, obtaining profitable spot charters, which depends greatly on ship supply and

demand, and minimising, to the extent possible, time spent waiting for charters and time spent travelling unloaded to

pick up cargo.

If charter rates are low when the Group is seeking a new charter, it may only be able to enter into new charters at

unprofitable rates. Prolonged periods of low charter hire rates or low ship utilisation could also have a material adverse

effect on the value of the Group's ships.

The Group may not be able to obtain supplies and services when needed, at an acceptable cost, or at all

The Group relies, and will in the future rely, on a significant supply of consumables, spare parts and equipment to

operate, maintain, repair and upgrade its fleet of ships. Cost increases, delays or unavailability could negatively impact

the Group's operations and result in down-time due to delays in the repair and maintenance of the Group's ships.

The Group's operations may be affected by political, governmental and economic instability which may

adversely affect the Group's business

The Group's operations may be affected by political, governmental and economic conditions in countries where the

Group engage in business. Any disruption caused by these factors could adversely affect the Group's business,

including by reducing the levels of oil and gas exploration, development and production activities in these areas. In

addition, political instability, terrorist or other attacks, war or international hostilities may contribute to further world

economic instability and uncertainty in global financial markets, which may adversely affect the LPG industry and the

Group's business. In particular, terrorist attacks, or the perception that LPG facilities and carriers are potential terrorist

targets, could materially and adversely affect expansion of LPG infrastructure and LPG shipping.

2.2 Risks related to the Group

The Group may not be able to successfully implement its strategies

The Group's strategy is to contribute to consolidation of the VLGC industry; grow the fleet; have a chartering strategy

focused on spot market exposure; and maintain a strong balance sheet with attractive financing terms. Maintaining

and expanding the Group's operations and achieving its other objectives involve inherent costs and uncertainties and

there is no assurance that the Group will achieve its objectives or other anticipated benefits. Further, there is no

assurance that the Group will be able to undertake the contemplated activities within its expected time frame, that the

cost of any of the Group's objectives will be at expected levels or that the benefits of its objectives will be achieved

within the expected timeframe or at all. The Group's strategy may also be affected by factors beyond its control, such

as the speed of the economic recovery in its market and the availability of acquisition opportunities in the market. Any

failures, material delays or unexpected costs related to implementation of the Group's strategies, including the amount

already invested, could have a material adverse effect on its business, financial condition, results of operations and

cash flows.

Due to the Group's undiversified exposure towards the LPG market, adverse developments in the LPG

shipping industry would have a significantly greater impact on the Group's financial condition, results of

operations and cash flows than if the Group maintained a more diverse fleet of ships

The Group relies exclusively on the cash flow generated from spot trades and charters for its LPG ships. Due to the

Group's lack of diversification, an adverse development in the LPG shipping industry would have a significantly greater

impact on the Group's financial condition, results of operations and cash flows than if the Group maintained a more

diverse fleet of ships.


13

The Group's earnings and business are subject to risk caused by counterparties in contracts, including

credit risk, and failure and misrepresentation of such counterparties causing them not to meet their

obligations could cause loss to the Group or otherwise materially and adversely affect the business of the

Group

The ability of each counterparty to perform its obligations under a contract with the Group will depend on a number of

factors that are beyond the Group's control and may include, among other things:

General economic conditions;

The condition of the maritime and other industries to which the counterparty is exposed;

The overall financial condition of the counterparty;

Charter rates received for specific types of ships; and

Various expenses.

The Group's ships may from time to time be chartered out on time charters. In depressed market conditions,

charterers may no longer need a ship that is currently under time charter or may be able to obtain a comparable ship

at lower rates. As a result, charterers may seek to re-negotiate the terms of their existing time charters or avoid their

obligations under those contracts. Future contracts could permit a customer to terminate its contract early subject to

the payment of a termination fee. Such fee may not fully compensate for the loss sustained by the Group. Should a

counterparty fail to honour its obligations under its agreements with the Group, the Group could sustain significant

losses, which could have a material adverse effect on the Group's business, financial condition, results of operations

and cash flows. Further, the Group's shipping services are subject to the risks associated with having limited

customers for its services.

The market value of the Group's current ships and those it acquires in the future may decrease, which

could, among other things, cause the Group to be in non-compliance with its loan covenants or to incur

losses if it decides to sell them following a decline in their market values

Ship values are both cyclical and volatile, and may fluctuate due to a number of different factors, including, but not

limited to:

General economic and market conditions affecting the LPG shipping industry, including competition from

other shipping companies;

Availability of credit and other forms of financial liquidity;

Charterers' preferences with respect to ship design, types, sizes and ages of available ships;

The availability of other modes of transportation;

Increases in the supply of ship capacity;

Prevailing charter and freight rates;

The cost of LPG newbuildings;

Changes to governmental, laws and regulations, including environmental protection laws and regulations

and or class rules; and

The need to upgrade ships as a result of charterer requirements, technological advances in ship design or

equipment or otherwise.

A decline in the fair market values of the Group's ships could result in the Group not being in compliance with its loan

covenants.

Following, the Amendment Agreements, the Group's credit facilities include covenants pursuant to which the minimum

fair market value of the Group's existing fleet financed under its credit facilities shall at all times cover at least 110%


14

of the outstanding facility amounts from the quarter ending 31 December 2016. The 110% level is applicable until, but

not including, the quarter ending 30 June 2019, following which it will be a gradual step-up towards March 2020 when

the original covenant level of 130% will be reinstated. Consequently, a decline in the market value of the Group's

ships financed under the credit facilities may lead to a breach of such covenants, which again may lead to the Group

being required to provide cash or other security to the lenders or reduce the outstanding and available amount under

the facilities to restore the ratio to its required level, or to sell ships, or the lenders may accelerate the loans under the

facilities. As a result, the Group's business, financial condition, results of operations and cash flow could be materially

and adversely affected.

In addition, a decline in the fair market values of the Group's ships may result in impairment adjustments in the

Group's financial statements, which would adversely affect its financial results, and if for any reason the Group find it

necessary to sell any of its ships at a time when prices are depressed, the Group could incur a significant loss.

The Group may not be able to keep pace with technological developments in the LPG shipping market

Future technological developments for LPG ships may result in substantial improvements in ships equipment functions

and performance. As a result, the Group's future success and profitability may be dependent in part upon its ability to:

Maintain existing ships and related equipment and services;

Cost effectively address the increasingly sophisticated needs of its customers; and

Anticipate changes in technology and industry standards and respond to technological developments on a

timely basis.

If the Group is not successful in timely responding to technological developments or changes in industry standards, on

a cost-effective basis, this could have a material adverse effect on the Group's business.

2.3 Risks related to the Group's operations

The Group's operating and maintenance costs may not necessarily fluctuate in proportion to changes in

operating revenues

The Group's operating and maintenance costs will not necessarily fluctuate in proportion to changes in operating

revenues. Operating revenues may fluctuate as a function of changes in supply and demand for LPG shipping services,

which in turn affect charter rates. In addition, equipment maintenance costs fluctuate depending upon the type of

activity the ship is performing and the age and condition of the equipment. In a situation where a ship faces longer

idle periods, reductions in costs may not be immediate as some of the crew may be required to prepare ships for

stacking and maintenance in the stacking period. Should ships be idle for a longer period, the Group may seek to

redeploy crew members, who are not required to maintain the ships, to active units to the extent possible. However,

there can be no assurance that the Group will be successful in reducing its costs.

The Group's business involves numerous operating hazards and the Group's own insurance may not be

adequate to cover the Group's losses

The operations of the Group's ships are subject to hazards inherent in the industry where it operates, service down

time on its ships, equipment defects, fires, explosions and pollution. These hazards can cause personal injury or loss of

life, severe damage to or destruction of property and equipment, pollution or environmental damage, claims by

employees, third parties or customers and suspension of operations. The operation of the Group's ships is also subject

to hazards inherent in marine operations, such as capsizing, sinking, grounding, collision, damage from severe

weather and marine life infestations. Operations may also be suspended because of machinery breakdowns, abnormal

conditions, and failure of subcontractors to perform or supply goods or services, or personnel shortages.

Damage to the environment could also result from the Group's operations, particularly through spillage of fuel,

lubricants or other chemicals and substances used in operations, or extensive uncontrolled fires. Although the Group

carries protection and indemnity insurance, all risks may not be adequately insured against, and any particular claim

may not be paid. Any claims covered by insurance would be subject to deductibles, and since it is possible that a large

number of claims may be brought, the aggregate amount of these deductibles could be material.

The Group may be unable to procure adequate insurance coverage at commercially reasonable rates in the future. For

example, more stringent environmental regulations have led in the past to increased costs for, and in the future may

result in the lack of availability of, insurance against risks of environmental damage or pollution. Any uninsured or


15

underinsured loss could harm the Group's business, financial condition and operating results. In addition, the Group's

insurance may be voidable by the insurers as a result of certain of the Group's actions, such as the Group's ships

failing to maintain certification with applicable maritime self-regulatory organisations.

The Group's insurance coverage will not in all situations provide sufficient funds to protect the Group from all liabilities

and losses that could result from its operations. The amount of the Group's insurance cover may be less than the

related impact on enterprise value after a loss. The Group's coverage includes policy limits. As a result, the Group

retains the risk for any losses in excess of these limits. Any such lack of reimbursement may cause the Group to incur

substantial losses and costs. In addition, the Group could decide to retain substantially more risk in the future.

Moreover, no assurance can be made that the Group has, or will maintain in the future, adequate insurance against

certain risks.

If a significant accident or other event occurs and is not fully covered by the Group's insurance or any enforceable or

recoverable indemnity from, or claim against, a third party, it could adversely affect the Group's business, financial

position, results of operations or cash flows.

The Group's ships are exposed to technical risk and down-time or off-hire

In respect of both the ships operating in the spot market and the ships from time to time chartered out under time

charter arrangements, the Group carries the costs and risks of operational and technical problems. In respect of ships

operating in the spot market, ship down-time could increase the Group's costs and will reduce its earnings. In respect

of ships chartered out under time charter arrangements, ship down-time may result in increased costs, as well as off-

hire (i.e. non-payment of daily charter hire under the time charter). Any ship down-time or off-hire could adversely

affect the Group's financial condition, results of operations and cash flows.

Failure to secure future employment for the Group's ships could have a material adverse effect on the

Group's results of operation, cash flow and financial condition

No assurance can be given as to whether future employment for the Group's ships can be secured on terms, rates and

with charterers, which are acceptable. Failure to secure future employment for the Group's ships could have a material

adverse effect on the Group's results of operation, cash flow and financial condition.

The required maintenance and dry-docking of the Group's ships could be more expensive and time

consuming than originally anticipated

Maintenance and dry-dockings of the Group's ships require significant capital expenditures and result in loss of

revenue while such ships are out of service. Any significant increase in either the number of days ships are out of

service due to such maintenance or dry-dockings or in the costs of any repairs carried out could have a material

adverse effect on the Group's profitability and cash flows. The Group may not be able to precisely predict the time

required to maintain or dry-dock any of its ships and unanticipated problems may arise. General increases in demand

for dry-docking services in the shipping industry could result in increased costs, delays or unavailability related to dry-

docking for the Group's ships. If a ship is dry-docked longer than expected or if the cost of repairs or maintenance is

greater than budgeted, the Group's results of operations, financial condition and cash flows could be materially and

adversely affected. Generally, ships dry-dock every five years. None of the Group's ships are scheduled for

maintenance dry-docking in the remainder of 2016 and in 2017, and five ships are scheduled for maintenance dry-

docking in 2018.

Failure to obtain or retain highly skilled personnel could have a material adverse effect on the Group's

operations

The successful development and performance of the Group's business depends on the Group's ability to attract and

retain skilled professionals with appropriate experience and expertise. Any loss of the services of any of the senior

management or key personnel could have a material adverse effect on the Group's business and operations. Obtaining

charters with leading industry participants depends on a number of factors, including the ability to man ships with

suitably experienced, high-quality masters, officers and crews. In recent years, the limited supply of and increased

demand for well-qualified crew has created upward pressure on crewing costs, which the Group bear both in respect of

its ships operating in the spot market and its ships that from time to time are chartered out under time charters.

Increases in crew costs may adversely affect the Group's profitability. In addition, if the Group cannot retain sufficient

numbers of quality on-board seafaring personnel, the Group's fleet utilisation will decrease, which could have a

material adverse effect on the Group's business, financial condition, results of operations and cash flows.


16

The Group may face labour disruptions that could interfere with its operations and have a material

adverse effect on the Group's business, financial condition, result of operations and cash flows

If not resolved in a timely and cost-effective manner, industrial action or other labour unrest could prevent or hinder

the Group's operations from being carried out normally and could have a material adverse effect on the Group's

business, financial condition, results of operations and cash flows.

The Group uses information technology systems to communicate with its ships and conduct its business,

and disruption, failure or security breaches of these systems could materially and adversely affect its

business and results of operations

The Group uses information technology ("IT") systems in order to communicate with its ships and achieve its business

objectives. The Group uses industry accepted security measures and technology such as access control systems to

securely maintain confidential and proprietary information maintained on its IT systems, and market standard virus

control systems. However, the Group's portfolio of hardware and software products, solutions and services and its

enterprise IT systems may be vulnerable to damage or disruption caused by circumstances beyond its control, such as

catastrophic events, power outages, natural disasters, computer system or network failures, computer viruses, cyber-

attacks or other malicious software programmes. The failure or disruption of the Group's IT systems to perform as

anticipated for any reason could disrupt the Group's business and result in decreased performance, significant

remediation costs, transaction errors, loss of data, processing inefficiencies, down-time, litigation, and the loss of

suppliers or customers. A significant disruption or failure could have a material adverse effect on the Group's business

and results of operations.

The ageing of the Group's fleet may result in increased operating costs in the future and a less competitive

fleet

In general, the cost of maintaining a ship in good operating condition increases with the age of the ship. As the

Group's fleet ages, the Group will incur increased costs. Older ships are typically less fuel efficient and more costly to

maintain than more recently constructed ships due to gradual improvements in engine technology and other design

features. Cargo insurance rates increase with the age of a ship, making older ships less desirable to spot customers

and charterers. Governmental regulations and safety or other equipment standards related to the age of ships may

also require expenditures for alterations or the addition of new equipment to the Group's ships and may restrict the

type of activities in which the Group's ships may engage. The Group cannot assure that, as the Group ships age,

market conditions will justify those expenditures or enable the Group to operate its ships profitably during the

remainder of their useful lives.

Avance Gas is a holding company and is dependent upon cash flow from subsidiaries to meet its

obligations

The Group currently conducts its operations through, and most of the Group's assets are owned by, Avance Gas'

subsidiaries. As such, the cash that the Group obtains from its subsidiaries is the principal source of funds necessary to

meet its obligations. Contractual provisions or laws, as well as the Group's subsidiaries' financial condition, operating

requirements, restrictive covenants in its debt arrangements and debt requirements, may limit the Group's ability to

obtain cash from subsidiaries that it requires to pay its expenses or meet its current or future debt service obligations.

The inability to transfer cash from the Group's subsidiaries may mean that the Group may not be permitted to make

the necessary transfers from its subsidiaries to meet its obligations. A payment default by the Group, or any of the

Group's subsidiaries, on any debt instrument would have a material adverse effect on the Group's business, financial

condition, results of operations and cash flows.

The Group's financial condition may be materially and adversely affected if the Group fails to successfully

integrate acquired assets or businesses, or is unable to obtain financing for acquisitions on acceptable

terms

The Group believes that acquisition opportunities may arise from time to time, and that any such acquisition could be

significant. At any given time, discussions with one or more potential sellers may be at different stages. However, any

such discussions may not result in the consummation of an acquisition transaction, and the Group may not be able to

identify or complete any acquisitions or make assurances that any acquisitions the Group makes will perform as

expected or that the returns from such acquisitions will support the investment required to acquire or develop them.

The Group cannot predict the effect, if any, that any announcement or consummation of an acquisition would have on

the trading price of the Shares.


17

Any future acquisitions could present a number of risks, including:

The risk of using management time and resources to pursue acquisitions that are not successfully

completed;

The risk of failing to identify material problems during due diligence;

The risk of over-paying for assets;

The risk of failing to arrange financing for an acquisition as may be required or desired;

The risk of incorrect assumptions regarding the future results of acquired operations;

The risk of failing to integrate the operations or management of any acquired operations or assets

successfully and timely; and

The risk of diversion of management's attention from existing operations or other priorities.

In addition, the integration and consolidation of acquisitions requires substantial human, financial and other resources,

including management time and attention, and may depend on the Group's ability to retain the acquired business'

existing management and employees or recruit acceptable replacements. Ultimately, if the Group is unsuccessful in

integrating any acquisitions in a timely and cost-effective manner, the Group's financial condition, results of operations

and cash flows could be materially and adversely affected.

Seasonal fluctuations could have a material adverse effect on the Group's business, financial condition,

results of operations and cash flows

The export volumes coming out of the Middle East LPG market, which has historically been the Group's primary

market, have traditionally been lower during the late fourth and the beginning of the first calendar quarters than at

other times of the year. This is mainly because of lower production in combination with somewhat higher local

demand. This normally results in an oversupply of shipping capacity and higher volatility which consequently results in

lower freight rates during this period.

2.4 Risks related to laws, regulations and litigation

The Group may be subject to litigation and disputes that could have a material adverse effect on the

Group's business, financial condition, results of operations and cash flows

The Group may in the future be involved from time to time in litigation and disputes. The operating hazards inherent in

the Group's business may expose the Group to, amongst other things, litigation, including personal injury litigation,

environmental litigation, contractual litigation with customers, intellectual property litigation, tax or securities

litigation, and maritime lawsuits including the possible arrest of the Group's ships, as well as other litigation and

disputes that arises in the ordinary course of business.

The Group is currently not involved in any litigation and disputes. However, it may in the future be involved in

litigation matters from time to time. Avance Gas cannot predict with certainty the outcome or effect of any claim or

other litigation matter. The ultimate outcome of any litigation matter and the potential costs associated with

prosecuting or defending such lawsuits and claims, including the diversion of the management's attention to these

matters, could have a material adverse effect on the Group's business, financial condition, results of operations and

cash flows.

Laws and regulations could hinder or delay the Group's operations, increase the Group's operating costs,

reduce demand for its services and restrict its ability to operate its ships or otherwise

The Group is subject to complex laws and regulations, including environmental regulations that can adversely affect

the cost, manner or feasibility of doing business. The operation of the Group's ships is subject to government oversight

and regulation in the form of international conventions, sanctions, national, state and local laws and regulations in

force in the jurisdictions in which the ships operate, as well as in the country or countries of their registration. Because

such conventions, laws and regulations are often revised, the Group cannot predict the ultimate cost of complying with

such conventions, laws and regulations or the impact thereof on the re-sale prices or useful lives of the Group's ships.

The Group may also incur additional costs in order to comply with other existing and future regulatory obligations,

including, but not limited to, costs relating to: air emissions, including greenhouse gases; the management of ballast


18

waters; maintenance and inspection; development and implementation of emergency procedures; and insurance

coverage or other financial assurance of the Group's ability to address pollution incidents. In addition, environmental

or other legislation establishing additional regulation or restrictions on LPG production and transportation, including the

adoption of climate change legislation or regulations, or legislation in the United States placing additional regulation or

restrictions on LPG production from shale gas could result in reduced demand for LPG shipping.

A change in tax laws of any country in which the Group operates from time to time, or complex tax laws

associated with international operations which the Group may undertake from time to time, could increase

the effective tax rate of the Group

The Group will from time to time conduct operations through various subsidiaries in countries throughout the world

and the Group's ships will have voyages to and from, and will call on ports, in countries throughout the world. The

Group may, for example, be exposed to tax liability in countries where its ships operate, computed on the basis of a

percentage of its charter revenue and the number of days spent in that country. The Group and shareholders may also

become subject to Controlled Foreign Corporations (CFC) taxation. Tax laws and regulations are highly complex and

subject to interpretation and change. For example, if Norwegian shareholders control a company (i.e. directly or

indirectly own or control at least 50% of the shares or the capital of the company) resident in a low tax jurisdiction,

such Norwegian shareholders may be subject to Norwegian taxation according to the Norwegian Controlled Foreign

Corporations regulations (Norwegian CFC-regulations). Such taxation could apply with respect to certain of the Group's

subsidiaries if the Group becomes subject to the control of Norwegian shareholders. If Avance Gas' Norwegian

shareholders are subject to Norwegian CFC taxation, such Norwegian shareholders are taxed in Norway on their

proportionate share of the net profits generated by the relevant foreign company, calculated according to Norwegian

tax regulations.

A loss of a major tax dispute or a successful tax challenge to the Group's operating structure from time to

time or other disputes related to or challenges to the Group's tax payments could result in an increase in

the Group's effective tax rate

From time to time the Group's tax payments may be subject to review or investigation by tax authorities of the

jurisdictions in which the Group operates from time to time. If any tax authority successfully challenges the Group's

operational structure, intercompany pricing policies, the taxable presence of its subsidiaries in certain countries, or if

the Group loses a material tax dispute in any country, or any tax challenge of the Group's tax payments is successful,

its effective tax rate could increase substantially.

2.5 Risks related to financing and market risk

The Bank Debt Amendments and the Private Placement may not be sufficient and the Group may require

additional capital in the future in order to execute its growth strategy or for other purposes, which may


No assurance can be given that the Bank Debt Amendments and the Private Placement will be sufficient and that the

Group will not require additional funds in order to execute its growth strategy, or for other purposes. The Group's

business is capital intensive and, to the extent the Group does not generate sufficient cash from operations together

with the cash proceeds from the Private Placement and the Subsequent Offering, the Group or its subsidiaries may

need to raise additional funds through public or private debt or equity financing to fund capital expenditures. Adequate

sources of funds may not be available, or available at acceptable terms and conditions, when needed or may not be

available on acceptable terms. If the Group raises additional funds by issuing additional equity securities, the existing

shareholders may be significantly diluted. If funding is insufficient at any time in the future, the Group may be unable

to fund maintenance requirements and acquisitions, take advantage of business opportunities or respond to

competitive pressures, any of which could materially and adversely impact the Group's business, results of operations,

cash flows, financial condition and/or prospects. Such development could also have a material adverse effect on the

value of the Shares.

The Group will require additional capital in the future in order to execute its growth strategy, which may


The Group may require additional funds in order to execute its growth strategy, or for other purposes. The Group's

business is capital intensive and, to the extent the Group does not generate sufficient cash from operations, the Group

or its subsidiaries may need to raise additional funds through public or private debt or equity financing to fund capital

expenditures. Adequate sources of funds may not be available when needed or may not be available on acceptable

terms. If the Group raises additional funds by issuing additional equity securities, the existing shareholders may be

diluted. If funding is insufficient at any time in the future, the Group may be unable to fund maintenance requirements

and acquisitions, take advantage of business opportunities or respond to competitive pressures, any of which could


19

adversely impact the Group's business, financial condition and results of operations.

The Group's existing or future debt arrangements could limit the Group's liquidity and flexibility in

obtaining additional financing, in pursuing other business opportunities or corporate activities or Avance

Gas' ability to declare dividends to its shareholders

The Group's 450 million credit facility and 200 million credit facility contain, and any future bank loan agreements may

contain, certain covenants and event of default clauses, including cross default provisions and restrictive covenants

and performance requirements, such as loan-to-fleet value requirements and change of control provisions, which may

affect operational and financial flexibility of the Group. The satisfaction of these restrictive covenants and performance

requirements may be outside of the Group's control. Such restrictions could affect, and in many respects limit or

prohibit, among other things, the Group's ability to pay dividends, incur additional indebtedness, create liens, sell

assets, or engage in mergers or acquisitions. These restrictions could further limit the Group's ability to plan for or

react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. There can be

no assurance that such restrictions will not materially and adversely affect the Group's ability to finance its future

operations or capital needs.

The Group's future cash flows may be insufficient to meet all of its debt obligations and contractual commitments. To

the extent that the Group is unable to repay its indebtedness as it becomes due or at maturity, the Group may need to

refinance its debt, raise new debt, sell assets or repay the debt with the proceeds from equity offerings. See Section

11.8.1 "Credit facilities" for a description of the covenants applicable under the Group's credit facilities.

Additional indebtedness or equity financing may not be available to the Group in the future for the refinancing or

repayment of existing indebtedness, and the Group may not be able to complete asset sales in a timely manner

sufficient to make such repayments.

Interest rate fluctuations could affect the Group's cash flow and financial condition

The Group has incurred, and may in the future incur, significant amounts of debt. The Group is exposed to interest

rate risk primarily in relation to its long-term borrowings issued at floating interest rates. If the Group were to hedge

some or all of its interest rate exposure, there can be no assurance that such hedging arrangements will be effective.

As such, movements in interest rates could affect the Group's cash flow and financial condition.

Fluctuations in exchange rates could affect the Group's cash flow and financial condition

The Group has currency exposure to both transaction risk and translation risk related to its operating expenses.

Transaction risk arises when future commercial transactions or recognised assets or liabilities are denominated in a

currency that is not the entity's functional currency. The Group is exposed to transaction risks due to fluctuations in

exchange rates as it receives revenue primarily in USD but a portion of its operating and administrative and general

expenses are in local currencies. In certain markets where the Group operates, it may experience currency exchange

losses when revenue is received and expenses are paid in non-convertible currencies or when the Group does not

hedge an exposure to the relevant foreign currency.

Translation risk arises due to the conversion of amounts denominated in foreign currencies to USD, the Group's

reporting and functional currency. One of the Group's subsidiaries has NOK as its reporting and functional currency.

Consequently, any change in exchange rates between its operating subsidiary's functional currency and USD affect its

consolidated income statement and balance sheet when the result of that operating subsidiary is translated into USD

for reporting purposes.

2.6 Risks related to the Shares

The price of the Shares may fluctuate significantly

The trading price of the Shares could fluctuate significantly in response to a number of factors beyond the Group's

control, including, but not limited to, quarterly variations in operating results, adverse business developments,

changes in financial estimates and investment recommendations or ratings by securities analysts, or any other risk

discussed herein materialising or the anticipation of such risk materialising.

In recent years, the global stock markets have experienced extreme price and volume fluctuations. This volatility has

had a significant impact on the market price of securities issued by many companies, including companies in the

shipping industry. Those changes may occur without regard to the operating performance of these companies. The

price of the Shares may therefore fluctuate based upon factors that have little or nothing to do with the Group, and


20

these fluctuations may materially affect the price of the Shares.

Future sales, or the possibility for future sales, of substantial numbers of Shares may affect the Shares'

market price

Avance Gas cannot predict what effect, if any, future sales of the Shares, or the availability of Shares for future sales,

will have on their market price. Sales of substantial amounts of the Shares in the public market, or the perception that

such sales could occur, may adversely affect the market price of the Shares, making it more difficult for holders to sell

their Shares or Avance Gas to sell equity securities in the future at a time and price that they deem appropriate.

Future issuances of Shares or other securities may dilute the holdings of shareholders and could

materially affect the price of the Shares

It is possible that Avance Gas may in the future decide to offer additional Shares or other securities in order to finance

new capital-intensive projects, in connection with unanticipated liabilities or expenses or for any other purposes. There

can be no assurance Avance Gas will not decide to conduct further offerings of securities in the future. Depending on

the structure of any future offering, certain existing shareholders may not be able to purchase additional equity

securities. If Avance Gas raises additional funds by issuing additional equity securities, holdings and voting interests of

existing shareholders may be diluted.

Exchange rate fluctuations could adversely affect the value of the Shares and any dividends paid on the

Shares for an investor whose principal currency is not NOK

The Shares are, and the Offer Shares will be, priced and traded in NOK on the Oslo Stock Exchange and, although any

future payments of dividends on the Shares will be denominated in USD, such dividends will be distributed through the

VPS in NOK. Investors registered in the VPS whose address is outside Norway and who have not supplied the VPS with

details of any NOK account, will however receive dividends by cheque in their local currency, as exchanged from the

NOK amount distributed through the VPS. If it is not practical in the sole opinion of DNB Bank ASA, being Avance Gas'

VPS registrar, to issue a cheque in a local currency, a cheque will be issued in USD. The issuing and mailing of cheques

will be executed in accordance with the standard procedures of DNB Bank ASA, Foreign Payments Department. The

exchange rate(s) that is applied will be DNB Bank ASA's rate on the date of issuance. Exchange rate movements of

NOK will therefore affect the value of these dividends and distributions for investors whose principal currency is not

NOK. Furthermore, the market value of the Shares as expressed in foreign currencies will fluctuate in part as a result

of foreign exchange fluctuations. This could affect the value of the Shares and of any dividends paid on the Shares for

an investor whose principal currency is not NOK.

Beneficial interests in the Shares are recorded in book-entry form with the VPS on the basis of the

Registrar Agreement with the VPS Registrar, and Avance Gas cannot guarantee that the VPS Registrar will

fulfil its obligations and duties under the Registrar Agreement, which may lead to shareholders not being

able to exercise their rights as beneficial holders of the underlying Shares

For the purpose of enabling trading in the Shares on the Oslo Stock Exchange, the VPS Registrar has registered the

beneficial interests in the Shares in book-entry form with the VPS under the Registrar Agreement. The VPS Registrar is

registered as holder of the Shares in Avance Gas register of members that Avance Gas is required to maintain in

Bermuda. Under the Registrar Agreement, the VPS Registrar has registered (and will register in respect of the Offer

Shares) the beneficial interests in such Shares in book-entry form in the VPS. Accordingly, it is not the Shares issued

in accordance with the Bermuda Companies Act that will be subject to trading on the Oslo Stock Exchange, but the

beneficial interests in such Shares registered in the VPS. In accordance with market practice in Norway and system

requirements of the VPS, the beneficial interests in the Shares are, and with respect to the Offer Shares will be,

registered in the VPS under the category of a "share". Although each "share" registered with the VPS will represent

evidence of beneficial ownership of one common share in Avance Gas, such beneficial ownership would not necessarily

be recognised by a Bermuda court. As such, investors may have no direct rights against Avance Gas and its officers

and directors and may be required to obtain the co-operation of the VPS Registrar in order to assert claims against

Avance Gas and its officers and directors, and to look solely to the VPS Registrar for the payment of any dividends, for

exercise of voting rights attaching to the underlying common shares and for all other rights arising in respect of the

underlying common shares. Exercising such shareholder rights through the VPS Registrar is subject to certain terms

and conditions, as further described in Section 14.6.2 "The Registrar Agreement". Avance Gas cannot guarantee that

the VPS Registrar will be able to execute its obligations under the Registrar Agreement, including that the beneficial

owners of the Shares will receive the notice of a general meeting in time to instruct the VPS Registrar to either effect a

re-registration of their Shares or otherwise vote their Shares in the manner desired by such beneficial owners. Any

such failure may inter alia, limit the access for, delay or prevent, the beneficial shareholders being able to exercise the

rights attaching to the underlying Shares.


21

The VPS Registrar may terminate the Registrar Agreement by giving not less than three months prior written notice.

Further, the VPS Registrar may terminate the Registrar Agreement with immediate effect if Avance Gas does not

perform its payment obligations to the VPS Registrar or commits any other material breach of the Registrar

Agreement. In the event that the Registrar Agreement is terminated, Avance Gas will use its reasonable best efforts to

enter into a replacement agreement for purposes of permitting the uninterrupted trading of the Shares on the Oslo

Stock Exchange. There can be no assurance, however, that it would be possible to enter into such an agreement on

substantially the same terms or at all. A termination of the Registrar Agreement could, therefore, have a material

adverse effect on Avance Gas and the beneficial shareholders.

The Registrar Agreement limits the VPS Registrar's liability for any loss suffered by Avance Gas. The VPS Registrar

disclaims any liability for any loss attributable to circumstances beyond the VPS Registrar's control, including, but not

limited to, errors committed by others. The VPS Registrar is liable for direct losses incurred as a result from events

within the VPS Registrar's control. Thus, Avance Gas may not be able to recover its entire loss if the VPS Registrar

does not perform its obligations under the Registrar Agreement.

The transfer of Shares is, and the Offer Shares will be, subject to restrictions under the securities laws of

the United States and other jurisdictions

The Shares have not been, and the Offer Shares will not be, registered under the U.S. Securities Act or any U.S. state

securities laws or any other jurisdiction outside Norway and are not expected to be registered in the future. As such,

the Shares may not be offered or sold except pursuant to an exemption from the registration requirements of the U.S.

Securities Act and applicable U.S. state securities laws or pursuant to an effective registration statement under the

U.S. Securities Act. In addition, there can be no assurance that shareholders residing or domiciled in the United States

will be able to participate in future capital increases or rights offerings.

Bermuda law permits the transfer of shares listed or admitted to trading on an Appointed Stock Exchange such as the

Oslo Stock Exchange, to be effected in accordance with the rules of such stock exchange without a written instrument

of transfer. Further, the Bermuda Monetary Authority has, pursuant to the Exchange Control Act 1972 of Bermuda and

associated regulations, granted its consent for the issue and transfer of the Shares to residents and non-residents of

Bermuda for exchange control purposes provided that the Shares are listed on the Oslo Stock Exchange or any other

Appointed Stock Exchange on or within fourteen days or the relevant issue or transfer. Accordingly, the Shares can be

registered in the VPS and title to the Shares can be evidenced and transferred without a written instrument and the

consent of the Bermuda Monetary Authority for the issuance and transfer of shares shall apply as long as the Shares

are listed and traded on the Oslo Stock Exchange. If the Shares are no longer listed or admitted to trading on the Oslo

Stock Exchange or any other Appointed Stock Exchange, or if the Oslo Stock Exchange ceases to be an Appointed

Stock Exchange, the Shares may only be transferred by written instrument in accordance with the terms of the Bye-

laws of Avance Gas and with the prior consent of the Bermuda Monetary Authority.

Avance Gas may be unable to pay any dividends in the future

Avance Gas may be unable to pay dividends in future years. The amount of dividends paid by Avance Gas, if any, for a

given financial period, will depend on, among other things, Avance Gas' future operating results, cash flows, financial

condition, capital requirements, the sufficiency of its distributable reserves, the ability of Avance Gas' subsidiaries to

pay dividends to Avance Gas, credit terms, general economic conditions, legal restrictions and other factors that

Avance Gas may deem to be significant from time to time.

2.7 Risks related to the Subsequent Offering

Eligible Shareholders who do not participate in the Subsequent Offering may experience significant

dilution in their shareholding

Subscription Rights that are not exercised by the end of the Subscription Period will have no value and will

automatically lapse without compensation to the holder. To the extent that an Eligible Shareholder does not exercise

its Subscription Rights prior to the expiry of the Subscription Period, whether by choice or due to a failure to comply

with procedures set forth in Section 17 "The completed Private Placement and the terms of the Subsequent Offering",

or to the extent that an Eligible Shareholder is not permitted to subscribe for Offer Shares as further described in

Section 18 "Selling and transfer restrictions", such Eligible Shareholder's proportionate ownership and voting interests

in the Company after the completion of the Subsequent Offering will be diluted.


22

2.8 Risks related to the Company's incorporation in Bermuda

Investors may have difficulty enforcing any judgment obtained in other jurisdictions than Bermuda

against Avance Gas or its directors or executive officers

Avance Gas is an exempted company limited by shares incorporated under the laws of Bermuda. As a result, the rights

of holders of the Shares will be governed by Bermuda law and Avance Gas' memorandum of association and Bye-laws.

The rights of shareholders under Bermuda law may differ from the rights of shareholders of companies incorporated in

other jurisdictions. It may be difficult for investors to effect service of process on Avance Gas or its directors and

executive officers or to enforce judgments obtained in courts in other jurisdictions against Avance Gas or those

persons, including judgments based on the civil liability provisions of the securities laws of other jurisdictions than

Bermuda. It is doubtful whether courts in Norway or Bermuda will enforce judgments obtained in other jurisdictions,

including the United States, against Avance Gas or its directors or officers under the securities laws of those

jurisdictions or entertain actions in Norway or Bermuda against Avance Gas or its directors or officers under the

securities laws of other jurisdictions. In addition, awards of punitive damages in actions brought in the United States

or elsewhere may not be enforceable in Norway or Bermuda. As an example, United States does not currently have a

treaty providing for reciprocal recognition and enforcement of judgements (other than arbitral awards) in civil and

commercial matters with either Norway or Bermuda.

Avance Gas has anti-takeover provisions in its Bye-laws that may discourage a change of control

The Bye-laws contain provisions that could make it more difficult for a third party to acquire Avance Gas without the

consent of the board of directors of Avance Gas (the "Board of Directors"). These provisions provide, among other

things, that:

• the Board of Directors may refuse to register and may direct the VPS Registrar to decline to register certain

transfers of shares where the transfer would likely result in 50% or more of the issued and outstanding

shares or votes of Avance Gas being held, or owned directly or indirectly by individuals or legal persons

resident for tax purposes in Norway or such shares being effectively connected to a Norwegian business

activity, or Avance Gas being deemed a "Controlled Foreign Company" pursuant to Norwegian tax

legislation; and

• the Board of Directors may issue any authorised but unissued Shares of Avance Gas, subject to any

resolution of Avance Gas' shareholders to the contrary.

These provisions could make it more difficult for a third party to acquire Avance Gas, even if the third party's offer

may be considered beneficial by many shareholders.

Various conditions may cause an adverse tax effect for the shareholder if Avance Gas pays dividends

Dividends declared and paid by a Bermuda company may be subject to local tax in the investor's home country, and

each investor should make such investigations for himself/herself. Norwegian investors will be subject to taxation as

dividends will be deemed as taxable income for the receiver. See Section 16 "Taxation" for further information.

Potential new or amended Bermuda tax rules resulting in potential Bermuda taxation

At the present time, there is no Bermuda income or profits tax, withholding tax, capital gains tax, capital transfer tax,

estate duty or inheritance tax payable by Avance Gas or by Avance Gas' shareholders in respect of the Avance Gas'

Shares. The Minister of Finance of Bermuda, under the Exempted Undertakings Tax Protection Act 1966 of Bermuda,

as amended, has given Avance Gas an assurance that in the event that any legislation is enacted in Bermuda imposing

any tax computed on profits or income, or computed on any capital asset, gain or appreciation, or any tax in the

nature of estate duty or inheritance tax, such tax shall not until 31 March 2035 be applicable to Avance Gas or any of

its operations, or its shares, debentures or other obligations, except insofar as such tax applies to persons ordinarily

resident in Bermuda or is payable by Avance Gas in respect of real property owned or leased by Avance Gas in

Bermuda. Given the limited duration of the Minister of Finance of Bermuda's assurance, it cannot be assured that

Avance Gas will not be subject to any Bermuda tax after 31 March 2035.

Avance Gas' Bye-laws restrict shareholders from bringing legal action against its officers and directors

Avance Gas' Bye-laws contain a broad waiver by Avance Gas' shareholders of any claim or right of action, both

individually and on Avance Gas' behalf, against any of Avance Gas' officers or directors. The waiver applies to any

action taken by an officer or director, or the failure of an officer or director to take any action, in the performance of

his or her duties, except with respect to any matter involving any fraud or dishonesty on the part of the officer or

director. This waiver limits the right of shareholders to assert claims against Avance Gas' officers and directors unless


23

the act or failure to act involves fraud or dishonesty.


24

3 RESPONSIBILITY FOR THE PROSPECTUS

This Prospectus has been prepared in connection with the Subsequent Offering described herein and the listing of the

Offer Shares and the Private Placement Shares on the Oslo Stock Exchange.

The Board of Directors of Avance Gas accepts responsibility for the information contained in this Prospectus. The

members of the Board of Directors confirm that, after having taken all reasonable care to ensure that such is the case,

the information contained in this Prospectus is, to the best of their knowledge, in accordance with the facts and

contains no omission likely to affect its import.

26 October 2016

The Board of Directors of Avance Gas Holding Ltd

Niels G. Stolt-Nielsen

Chairman

Jan Chr. Engelhardtsen

Director

François Sunier

Director

Jan Kastrup-Nielsen

Director

Kate Blankenship

Director

Erling Lind

Director


25

4 GENERAL INFORMATION

4.1 Other important investor information

The Company has furnished the information in this Prospectus. No representation or warranty, express or implied is

made by the Managers as to the accuracy, completeness or verification of the information set forth herein, and nothing

contained in this Prospectus is, or shall be relied upon as, a promise or representation in this respect, whether as to

the past or the future. The Managers assume no responsibility for the accuracy or completeness or the verification of

this Prospectus and accordingly disclaim, to the fullest extent permitted by applicable law, any and all liability whether

arising in tort, contract or otherwise which they might otherwise be found to have in respect of this Prospectus or any

such statement.

Neither the Company nor the Managers, or any of their respective affiliates, representatives, advisers or selling

agents, is making any representation to any offeree or purchaser of the Offer Shares regarding the legality of an

investment in the Offer Shares. Each investor should consult with his or her own advisors as to the legal, tax,

business, financial and related aspects of a purchase of the Offer Shares.

Investing in the Offer Shares involves a high degree of risk. See Section 2 "Risk factors".

4.2 Presentation of financial and other information

4.2.1 Financial information

Historically, the Group has reported its consolidated financial statements on the basis of a financial year which ended

on 30 November each year. For the financial year 2014, the Group changed its financial year end date to 31

December. As a result, the financial statements for the year 2014 covers a thirteen month period starting on 1

December 2013 and ending on 31 December 2014.

The financial information contained in this Prospectus has been derived from (i) the Company's audited consolidated

financial statements (a) as of, and for the year ended, 31 December 2015, (b) as of, and for and the thirteen month

period ended 31 December 2014 and (c) as of, and for the financial year ended 30 November 2013 (collectively, the

"Financial Statements") and (ii) the Company's unaudited consolidated interim financial statements as at, and for

the three and nine month periods ended, 30 September 2016 and 2015 (the "Interim Financial Statements").

The Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS")

as adopted by the European Union (the "EU"), while the Interim Financial Statements have been prepared in

accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the EU ("IAS 34").

The Financial Statements for the financial years 2013 have been audited by PricewaterhouseCoopers LLP, as set forth

in their reports thereon included therein. The Financial Statements for the financial years 2015 and 2014 have been

audited by PricewaterhouseCoopers AS, as set forth in their report thereon included therein. The Interim Financial

Statements are unaudited.

The Financial Statements and the Interim Financial Statements are together referred to as the "Financial

Information". The Financial Information is incorporated by reference hereto, see Section 19.3 "Incorporation by

reference".

The Company presents the Financial Information in USD (presentation currency).

4.2.2 Industry and market data

This Prospectus contains statistics, data, statements and other information relating to markets, market sizes, market

shares, market positions and other industry data pertaining to the Group's future business and the industries and

markets in which it may operate in the future. Unless otherwise indicated, such information reflects Avance Gas'

estimates based on analysis of multiple sources, including data compiled by professional organisations, consultants

and analysts and information otherwise obtained from other third party sources, such as annual financial statements

and other presentations published by listed companies operating within the same industry as Avance Gas may do in

the future. While the Company has complied, extracted and reproduced industry and market data from external

sources, the Company has not independently verified the correctness of such data. The Company cautions prospective

investors not to place undue reliance on the above mentioned data. Unless otherwise indicated in the Prospectus, the

basis for any statements regarding the Group's competitive position is based on the Company's own assessment and

knowledge of the potential market in which it operates.


26

The Company confirms that where information has been sourced from a third party, such information has been

accurately reproduced and that as far as the Company is aware and is able to ascertain from information published by

that third party, no facts have been omitted that would render the reproduced information inaccurate or misleading.

Where information sourced from third parties has been presented, the source of such information has been identified.

The Company does not intend, and does not assume any obligations to update industry or market data set forth in this

Prospectus.

Industry publications or reports generally state that the information they contain has been obtained from sources

believed to be reliable, but the accuracy and completeness of such information is not guaranteed. The Company has

not independently verified and cannot give any assurances as to the accuracy of market data contained in this

Prospectus that was extracted from these industry publications or reports and reproduced herein. Market data and

statistics are inherently predictive and subject to uncertainty and not necessarily reflective of actual market conditions.

Such statistics are based on market research, which itself is based on sampling and subjective judgments by both the

researchers and the respondents, including judgments about what types of products and transactions should be

included in the relevant market.

As a result, prospective investors should be aware that statistics, data, statements and other information relating to

markets, market sizes, market shares, market positions and other industry data in this Prospectus (and projections,

assumptions and estimates based on such information) may not be reliable indicators of the Company's future

performance and the future performance of the industry in which it operates. Such indicators are necessarily subject to

a high degree of uncertainty and risk due to the limitations described above and to a variety of other factors, including

those described in Section 2 "Risk factors" and elsewhere in this Prospectus.

4.2.3 Valuation of the Group's ships

Avance Gas confirms that this Prospectus does not contain any third party valuation of the Group's ships. Further,

Avance Gas confirms that the book value of the Group's ships as reflected in the balance sheet and note 5 in the

Group's unaudited consolidated interim financial statements as of, and for the three and nine month periods ended, 30

September 2016, prepared in accordance with IAS 34, reflects the recoverable amount of the Group's ships as of 30

September 2016. For a description of the impairments taken on the Group's ships in the interim financial statements

as of, and for the three and nine month periods ended, 30 September 2016, see Section 11.9 "Impairment".

4.2.4 Other information

In this Prospectus, all references to "NOK" are to the lawful currency of Norway, all references to "USD" are to the

lawful currency of the United States and Bermuda and all references to "EUR" are to the lawful common currency of

the EU member states who have adopted the Euro as their sole national currency. No representation is made that the

NOK, USD or EUR amounts referred to herein could have been or could be converted into NOK, USD or EUR as the

case may be, at any particular rate, or at all.

4.2.5 Rounding

Certain figures included in this Prospectus have been subject to rounding adjustments (by rounding to the nearest

whole number or decimal or fraction, as the case may be). Accordingly, figures shown for the same category

presented in different tables may vary slightly. As a result of rounding adjustments, the figures presented may not add

up to the total amount presented.

4.3 Cautionary note regarding forward-looking statements

This Prospectus includes forward-looking statements that reflect the Company's current views with respect to future

events and financial and operational performance. These forward-looking statements may be identified by the use of

forward-looking terminology, such as the terms "anticipates", "assumes", "believes", "can", "could", "estimates",

"expects", "forecasts", "intends", "may", "might", "plans", "should", "projects", "will", "would" or, in each case, their

negative, or other variations or comparable terminology. These forward-looking statements as a general matter are all

statements other than statements as to historic facts or present facts and circumstances. They appear in the following

Sections in this Prospectus, Section 7 "Industry and market overview", Section 8 "Business of the Group", Section 10

"Selected Financial and other information" and Section 11 "Operating and financial review", and include statements

regarding the Company's intentions, beliefs or current expectations concerning, among other things, financial strength

and position of the Group, operating results, liquidity, prospects, growth, the implementation of strategic initiatives, as

well as other statements relating to the Group's future business development and financial performance, and the

industry in which the Group operates, such as, but not limited to, with respect to the demand for LPG ships in the

future and the level of activity in the LPG industry.


27

Prospective investors in the Shares are cautioned that forward-looking statements are not guarantees of future

performance and that the Group's actual financial position, operating results and liquidity, and the development of the

industry and potential market in which the Group may operate in the future, may differ materially from those made in,

or suggested by, the forward-looking statements contained in this Prospectus. The Company cannot guarantee that

the intentions, beliefs or current expectations upon which its forward-looking statements are based will occur.

By their nature, forward-looking statements involve, and are subject to, known and unknown risks, uncertainties and

assumptions as they relate to events and depend on circumstances that may or may not occur in the future. Because

of these known and unknown risks, uncertainties and assumptions, the outcome may differ materially from those set

out in the forward-looking statements. Important factors that could cause those differences include, but are not limited

to:

the effect of changes in demand, pricing and competition for the Group's existing and future LPG ships;

demand for LPG ships in the future;

the building of new LPG ships and the yard capacity for building new LPG ships in the future;

the competitive nature of the business the Group operates in and the competitive pressure and changes to

the competitive environment in general;

a deterioration in global economic conditions;

the earnings, cash flow, dividends and other expected financial results and conditions;

the price volatility of gas and oil products;

increases in bunker fuel prices;

competition in the LPG industry;

the ability of the Group to implement its business strategy successfully or manage its growth effectively;

the Group's lack of diversification;

the Group's exposure to the risk of acts of piracy;

the ability to secure sufficient employment for the Group's LPG ships;

the utilisation level for the Group's existing LPG ships;

the state of the Group's relationships with major clients, suppliers and joint venture partners;

the quality of goods and services provided to or on behalf of the Group by suppliers, joint venture partners

and subcontractors;

the level of required repair, maintenance expenditures and replacement costs on the existing and new LPG

ships of the Group;

the required dry-docking of the Group's ships;

technological changes in the Group's market and industry;

fluctuations of interest and exchange rates;

changes in general economic and industry conditions, including changes to tax rates and regimes;

inadequacy of the Group's insurance to cover the Group's losses;

political, governmental, social, legal and regulatory changes (including regulations relating to bribery and

corruption, health, safety and the environment);

dependence on and changes in management and failure to retain and attract a sufficient number of skilled

personnel;

the ageing of the fleet;

off-hire or performance claims by the Group's customers;

substantial fluctuation in ships values;

delays in deliveries, or cost overruns in relation to, newbuildings or deliveries of ships with significant

defects;


28

the capability of the ship design to deliver fuel efficiency benefits;

failure to successfully integrate assets or businesses acquired from third parties;

changes in and compliance with law and regulation;

compliance with safety and other ships requirements imposed by classification societies;

significant exchange rate fluctuations;

dependency upon cash flow from its subsidiaries;

access to funding, including refinancing of existing loan facilities;

the Subsequent Offering and related risks; and

legal proceedings and disputes.

The risks that are currently known to the Company and which could affect the Group's future results and could cause

results to differ materially from those expressed in the forward-looking statements are discussed in Section 2 "Risk

factors".

The information contained in this Prospectus, including the information set out under Section 2 "Risk factors",

identifies additional factors that could affect the Group's financial position, operating results, liquidity and

performance. Prospective investors in the Shares are urged to read all Sections of this Prospectus and, in particular,

Section 2 "Risk factors" for a more complete discussion of the factors that could affect the Group's future performance

and the industry in which the Group operates when considering an investment in the Company.

These forward-looking statements speak only as at the date on which they are made. The Company undertakes no

obligation to publicly update or publicly revise any forward-looking statement, whether as a result of new information,

future events or otherwise. All subsequent written and oral forward-looking statements attributable to the Company or

to persons acting on the Company's behalf are expressly qualified in their entirety by the cautionary statements

referred to above and contained elsewhere in this Prospectus.


29

5 DIVIDENDS AND DIVIDEND POLICY

5.1 Dividend policy

The Company's objective is to generate competitive returns to its shareholders. Whilst it is the intention to pay regular

dividends, the level of any dividend will be guided by current earnings, market prospects, current and future capital

expenditure commitments and investment opportunities, as well as any restrictions to pay dividends included in the

Group's credit facilities.

In deciding whether to propose a dividend and in determining the dividend amount, the Board of Directors will take

into account the Group's capital requirements, including capital expenditure commitments, its financial condition,

general business conditions, legal restrictions as set out in Section 5.2 "Legal constraints on the distribution of

dividends", and any restrictions under borrowing arrangements or other contractual arrangements in place at the time.

There can be no assurance that a dividend will be proposed or declared in any given year. Dividends distributed to

shareholders of the Company in the years 2015, 2014 and 2013 were USD 5.01, USD 2.72 and nil per Share,

respectively.

5.2 Legal constraints on the distribution of dividends

A Bermuda company may not declare or pay a dividend, or make a distribution out of contributed surplus, if there are

reasonable grounds for believing that (i) the company is, or would after the payment be, unable to pay its liabilities as

they become due; or (ii) the realisable value of the company's assets would thereby be less than its liabilities.

"Contributed surplus" is defined for purposes of section 54 of the Bermuda Companies Act to include the proceeds

arising from donated shares, credits resulting from the redemption or conversion of shares at less than the amount set

up as nominal capital and donations of cash and other assets to a Bermuda company. Under the Bye-laws, the Board

of Directors may declare dividends and distributions without the approval of the shareholders in general meetings.

Further, the Company's subsidiaries may be subject to applicable legal constraints on the distribution of dividends in

the jurisdiction in which they are incorporated, such as sufficiency of distributable reserves.

As set out in Section 11.8.2 "The Bank Debt Amendments", the Company and its lending banks have agreed to certain

amendments to the credit facilities which, inter alia, will include restrictions on the Company's ability to pay dividends

during the period where the Company pays reduced amortisation payments and until the Company is back on its

original maturity schedule. See Section 11.8.2 "The Bank Debt Amendments" for further details.

5.3 Manner of dividend payments

Although any future payments of dividends on the Shares will be denominated in USD, such dividends will be

distributed through the VPS in NOK. Any dividend will be paid to the shareholders through the VPS. Investors

registered in the VPS whose address is outside Norway and who have not supplied the VPS with details of any NOK

account, will however receive dividends by cheque in their local currency, as exchanged from the NOK amount

distributed through the VPS. If it is not practical in the sole opinion of DNB Bank ASA, being the Company's VPS

registrar, to issue a cheque in a local currency, a cheque will be issued in USD. The issuing and mailing of cheques will

be executed in accordance with the standard procedures of DNB Bank ASA, Foreign Payments Department. The

exchange rate(s) that is applied will be DNB Bank ASA's rate on the date of issuance. Dividends will be credited

automatically to the VPS registered shareholders' NOK accounts, or in lieu of such registered NOK account, by cheque,

without the need for shareholders to present documentation proving their ownership of the Shares.


30

6 REASONS FOR THE PRIVATE PLACEMENT AND THE SUBSEQUENT OFFERING

Throughout 2016, the Company has taken several measures to adapt to the market situation and preserve its liquidity

position, including reducing dividend pay-outs to nil, successfully intensified its efforts to retrieve outstanding

demurrage payments, actively reducing costs across the organisation and selling the LNG carrier Gaea.

In order to prepare for a prolonged market downturn, the Company has agreed with its lending banks a

comprehensive set of amendments to its bank loan facilities, as further described in Section 11.8.2 "The Bank Debt

Amendments". The amendments set forth in the Amendment Agreements will provide the Company with a comfortable

liquidity position through a prolonged market downturn. The Amendment Agreements with the banks are conditional

upon the Company raising minimum USD 55 million in new equity, which has been completed through the Private

Placement. The proceeds from the Private Placement will be used to strengthen the Company's balance sheet and

create an extended liquidity runway, as well as facilitate the Bank Debt Amendments.

The purpose of the Subsequent Offering is to enable the Eligible Shareholders to subscribe for Shares in the Company

at the same price as in the Private Placement, thus limiting dilution of their shareholding. Eligible Shareholders are

shareholders of the Company holding less than 63,000 shares in the Company as of 20 October 2016 (as registered in

the VPS on the Record Date) and who are not resident in a jurisdiction where such offering would be unlawful, or for

jurisdictions other than Norway, would require any filing, registration or similar action, except for shareholders being

allocated Private Placement Shares in the Private Placement.

As the condition to raise equity to effectuate the amendments to the bank facilities has been fulfilled through the

Private Placement, the net proceeds from the Subsequent Offering, if any, will be used for general corporate purposes

and to further increase the Company's financial buffer as the Company prepares for a prolonged market downturn. The

Company has, as discussed in Section 11.8.2.1 "Amendments to bank debt", agreed to restrictions on investments and

dividends as part of the Amendment Agreements and it is therefore expected that the net proceeds, if any, will be

retained in cash by the Company.


31

7 INDUSTRY AND MARKET OVERVIEW

7.1 Introduction

LPG comprises two products, propane and butane, both of which are gaseous at ambient temperature and pressure.

To store and transport LPG in liquefied form, the products require either pressure or refrigerated tanks. For the last

five decades, the VLGC has been the standard form of long-haul LPG trade. VLGCs transport LPG at atmospheric

pressure and fully refrigerated.

LPG is mainly produced as a by-product in conjunction with oil and natural gas development, making the LPG value

chain more supply-driven than demand-driven by nature. LPG is also selectively produced in refineries.

The chart below shows the historical evolution and expectation of LPG freight transportation volumes. The recent

growth in seaborne LPG trading volume has primarily been driven by increased export from the U.S.

Figure 1 – Seaborne LPG trading development, volume

Source: Danske Bank (2016), based on Drewry and other industry sources (not publicly available information)

7.2 Supply and demand of LPG

7.2.1 LPG supply

Seaborne LPG shipping is dominated by LPG production from major gas plants, representing about 60% of LPG

production globally and about 74% of US LPG production. Except for the U.S., LPG produced in refineries is mainly

consumed regionally as the volumes are in general smaller than the production from the gas plants.

Historically, LPG has mainly been produced and exported out of the Middle East, with Abu Dhabi, Qatar and Saudi

Arabia being the main LPG suppliers. Iranian LPG exports was reduced for a short period due to sanctions in 2012, but

has lately been exporting close to full capacity.

Historically, U.S. was a net importer of LPG, by pipeline from Canada and seaborne from Europe and West-Africa. The

main development over the recent years has been the development from the U.S. being a major LPG importer to the

emergence of the U.S. as the largest LPG exporter measured by volume per country, and potentially also surpassing

the Middle Eastern region as a whole over the next years. The tight oil and shale gas revolution has driven these rising

quantities of LPG exports. The incremental volume has to a large extent been shipped to Asia.

Some of the U.S. production of LPG production will continue to go into domestic use, either for residential purposes,

for the petrochemical industry or for gasoline blending, but the vast majority of the incremental production has been,

and is expected to continue to be, exported. LPG, unlike liquefied natural gas ("LNG"), requires no governmental

regulatory approval to proceed with export projects, as LPG is classified as a processed product rather than as a

valuable raw material.

The chart below outlines the build-out of the U.S. LPG export terminal capacity. The chart excludes volumes from the

Marcus Hook terminals where there has been selected VLGC export shipments lately.

0

20

40

60

80

100

2011 2012 2013 2014 2015 2016E 2017E 2018E

Mil

lio

n t

on

nes


32

Figure 2 – US LPG export capacity

Source: Danske Bank (2016), based on Drewry and other industry sources (not publicly available information)

LPG terminals on the Gulf Coast, which originally were import terminals, have been upgraded to enable export. When

fully refrigerated LPG exports began five years ago, there was only one main player, Enterprise Products, exporting

from their LPG terminal at Oil Tanking on the Houston Ship Channel, which has recently been expanded. In September

2013, Targa completed the first phase of their expansion program at Galena Park in Texas. The Sunoco/ETP Nederland

Terminal went on stream in early 2015 and the Philips 66 terminal is expected to commence exports in Q4 2016. A

large portion of the capacity for these terminals have been contracted through "take or pay contracts".

The recently completed widening of the Panama Canal has contributed further to the accessibility of the trade route

from the U.S. into Asia, but could also have an adverse impact on demand for tonne-miles as trading distances are

reduced. It is too soon to assess the full effect on the VLGC shipping market of the widening of the Panama canal

taking all factors into account.

Elsewhere, there is limited production capacity growth in the Middle East, while supplies from the North Sea are

declining. Africa remains a sizeable LPG exporter and Australian exports are expected to grow as well.

7.2.2 LPG demand

LPG is a versatile fuel with many uses. By end-use, the largest consumers are the retail market, including cooking and

heating in households (approximately 50%), transportation fuel (approximately 10%) and the petrochemical industry

(approximately 25%).

Asia remains the biggest LPG importing region, driven primarily by industry demand in Japan, Korea and Taiwan. In

some regions, retail consumption has been subsidised, such as in India, Indonesia and Thailand. Retail consumption

growth has been particularly strong in the rural areas. Population growth and economic growth across Asia is expected

to result in continued growth in retail demand.

Recently, the petrochemical industry in China has consumed an increasing share of the LPG as feedstock for propane

dehydrogenation plants ("PDH"). This is expected to be an important source of demand in Asia, particularly in China,

where PDH production is used to cover the substantial propylene deficit. Operating PDH plants in China have a

propane requirement of more than 4 million tons per year, most of which is assumed to be imported as domestic

supplies of a lower quality. In addition, there are multiple other PDH plants which are planned, which may increase the

LPG demand in the region over the next few years.

PDH plants in Korea and Turkey, steamcrackers in Taiwan, as well as other petrochemical and industrial sectors across

Asia will also be key sources of demand for LPG going forward.

Other buyers of LPG include the European petrochemical sector, the retail sector in the Mediterranean region, and the

Latin American region.

7.3 LPG shipping

The balance of the LPG freight market is a function of supply of ships and demand for seaborne LPG shipping

transportation.

0

5

10

15

20

25

30

2012 2013 2014 2015 2016E 2017E

Million t

onnes

Enterprise Targa Sunoco Enterprise II Philips 66


33

7.3.1 LPG trading patterns

LPG is mainly produced as a by-product and hence the LPG market is a supply-driven market more than a demand-

driven market. Pricing of LPG and freight will determine where the LPG will be shipped. Historically, the freight market

has been divided between the East of Suez and the West of Suez basins. However, this has to a large extent changed

as incremental U.S. exports mainly is being shipped to Asia and the Far East.

The chart below shows the destination of U.S. VLGC loadings year to date in 2016 as of the end of August. Half of all

VLGC loadings have been shipped to Far East Asia.

Figure 3 – US VLGC loadings by destination

Source: Avance Gas (2016), based on Waterborne LPG report

7.3.2 Vessel supply

LPG shipping comes in a variety of types and sizes, from large refrigerated VLGCs to smaller pressurised ships. The

main categories of these ships are:

• VLGCs (75-85,000 cbm size fully-ref) in LPG trading;

• LGCs (50-60,000 cbm size fully-ref) in LPG and ammonia trading;

• MGCs (30-40,000 cbm size fully-ref) in LPG and ammonia trading;

• Larger semi-refs (15-22,000 cbm size semi-ref) in LPG and petchem gas trading;

• Smaller semi-refs (5-12,000 cbm size semi-ref) in LPG and petchem gas trading; and

• Pressure LPG ships (up to 12,000 cbm size pressure) in LPG and petrochemical gas trading.

The Group is only active in the VLGC segment, the largest ship size within LPG shipping accounting for about 75% of

global LPG seaborne trade.

The current VLGC vessel fleet consists of 239 ships. In the chart below, the existing fleet on water is shown by year of

delivery. 14% of the VLGC fleet was built in 1995 or before, and hence represents the most likely potential re-cycling

candidates, in particular as modern vessels are more fuel-efficient compared to older vessels. Two VLGCs have been

sold for re-cycling during 2016.

Figure 4 – VLGC fleet by year of delivery

Source: Danske Bank (2016), based on Clarkson's and other industry sources (not publicly available information)

The VLGC orderbook consists of 40 vessels. The chart below shows the current delivery schedule. In total, the

orderbook represents 17% of the total current fleet on water. The vessels on order are mainly in yards in Korea, with

some few units in China or Japan. No slippage in delivery dates or cancellations are expected.

50%

33%

17% Far East Asia

South America

Europe

0

5

10

15

20

25

30

35

40

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Num

ber

of

VLG

Cs


34

Figure 5 – VLGC newbuilding delivery schedule

Source: Avance Gas (2016), based on Affinity, Nordic Shipping and other industry sources (annual breakdown disclosed in the

Company’s quarterly presentations available on the Company’s website)

As can be seen in the table below, the 10 largest shipowners counted 134 ships or 47% of the total VLGC fleet

(including newbuildings). Consolidation efforts over the last years have included Frontline 2012's eight VLGC ship

orders being sold to the Group, Scorpio Tankers selling its VLGC fleet to Dorian LPG and Maersk Group selling its fleet

to BW LPG. Recently, BW LPG announced a bid for Aurora LPG, who owns and operate nine VLGCs. In addition to the

top VLGC owners shown below, there are LPG traders such as Petredec, who combine LPG ship ownership with LPG

trading.

Figure 6 – Top VLGC owners


The chart below shows the development in newbuilding prices. The newbuilding activity of 2012/2013 was partly

driven by lower yard prices. Prices recovered somewhat from late 2013 on the back of increasing interest.

Figure 7 – VLGC newbuilding prices


7.3.3 VLGC charter types

LPG vessels are employed in the market through a number of different arrangements. The general terms typically

found in these types of contracts are described below.

Voyage Charter. A voyage charter is typically a single round trip that is priced on a current or spot market

value. The owner of the vessel receives one payment derived by multiplying the tons of cargo loaded on

board by the agreed upon freight rate expressed on a per cargo ton basis. The owner is responsible for the

0

2

4

6

8

10

12

Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 2018 Beyond

Nu

mb

er o

f

deli

verie

s

2922

14 11 10 8 95 7 5

3

1 2 33 2

32

22

1412 12 11

9 8 7 7

BW LPG Dorian LPG Avance Gas JX Holdings Shangdong

Ocean

Nippon

Yusen

Kaisha

Aurora LPG KSS Line Latsco

Shipping

Solvang

Num

ber

of

VLG

Cs

Ships on water Ships on order

0

20

40

60

80

100

120

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

US

D m

illi

on

s


35

payment of all expenses including voyage expenses (including bunker fuel, agency, security and port costs),

operating expenses and capital costs of the vessel.

Time Charter. Under time charters, vessels are chartered to customers for fixed periods of time (which can

range from days to the life span of the ship). Rates are generally fixed with operating expense escalation

clauses for long-term charters. The charterer pays all voyage costs. The owner of the vessel receives

monthly charter payments in advance on a per day or per month basis and is responsible for the payment of

all operating expenses (including manning, maintenance, repair and docking) and capital costs of the vessel.

Bareboat Charter. Owner charters vessel to another company (the charterer) for a pre-agreed period and

a daily rate. The charterer is responsible for operating the vessel, including crewing and maintenance and

for paying charter rate.

Contract of Affreightment ("CoA"). Under a CoA, the ship-owner provides capacity to transport a certain

amount of cargo within a specified period from one or several places to one or several destinations

designated by the customer. All of the vessel's operating, voyage and capital costs are borne by the ship

owner. The freight rate is normally agreed on a per cargo ton basis. The freight rate can be fixed or floating,

or a combination of both.

7.3.4 VLGC charter rates

Shipping rates are in general a function of the underlying demand and supply for LPG shipping. The demand for

shipping is driven by both the number of tones to be transported and the distance of transportation. VLGC rates have

been, and are expected to remain, volatile. In general, time-charter rates are less volatile than spot rates. The chart

below shows the development of the Avance Gas spot index since January 2012. The Avance Gas spot index is

prepared by Avance Gas weekly and published on its website. The index is calculated on the basis of the weekly

average of the Baltic VLGC Index and bunkers prices quoted every Friday (lowest price of Singapore or Fujairah). The

ship used for the calculations is Iris Glory, assuming 15 knots sailing speed. The voyage used for the calculations is the

Ras Tanura to Chiba voyage (13,642 nautical miles), assuming 29 hours for bunkering and a sea margin of 3%. The

spot charter rates are below the estimated cash break-even rate of approximately USD 17,896 per day for 2017

(taking into account the interest rate swap agreements commencing in Q2 2017).

Figure 8 – Avance Gas spot index

Source: Avance Gas (2016). Published weekly on the Company's website


36

8 BUSINESS OF THE GROUP

8.1 Introduction

The Group is one of the leading providers of marine transportation of fully refrigerated LPG based on the number of

vessels owned (see figure 6 in Section 7.3.2 "Vessel supply"). As of the date of this Prospectus, the Group owns and

operates a fleet consisting of 14 VLGCs. The business is currently focused on the transportation of LPG for oil and gas

majors, LPG importers and LPG traders. Currently, all of the Group's ships operate in the spot market on a voyage

charter basis or shorter time charter contracts. A voyage charter is typically a single round trip that is priced on a

current spot market value. The Group receives one payment upon completion discharging derived by multiplying the

tons of cargo loaded on board by the agreed upon freight rate expressed on a per cargo ton basis. The Group is

responsible for the payment of all expenses, including voyage expenses (e.g. bunker fuel, agency, security and port

costs), operating expenses and capital costs of the vessel.

For a description of key drivers affecting the Group's business, please see Section 11.3 "Key drivers affecting the

Group's result of operations and financial performance".

8.2 Competitive strengths

The Group believes it possesses a number of strengths which will enable the Group to capitalise on the LPG shipping

market. These strengths include:

• Large, homogenous fleet. The Group has a large, homogenous and modern fleet of VLGCs and is thus well

positioned to take advantage of the LPG freight market by offering maximum flexibility to the customers. The

size enables the Group to pursue an active chartering policy for its ships and the ability to provide its

customers reliable LPG shipping services worldwide.

• Leading operational platform. The Group has one of the most experienced chartering and operation teams

with relevant backgrounds from LPG trading, chartering of VLGCs and sailing onboard VLGCs as senior officers

and masters. This will enable the Group to optimize fleet utilisation and provide its customers first class LPG

freight chartering and operations.

• Strong management team. The Group has a strong management team with significant experience from the

LPG shipping industry as well as relevant financial institutions. The management team has strong

relationships with oil and gas majors as well as leading LPG importers and traders, shipyards and other LPG

shipping players. In sum, this will contribute to the implementation of the Group's chartering and

consolidation strategies.

8.3 Strategy

The Group's strategy is to further develop as a significant participant in the global VLGC freight market.

Contribute to consolidation of the VLGC industry. The Group continues to believe that the VLGC

market will benefit from being consolidated further. This will enable VLGC owners to provide worldwide

shipping services with sufficient chartering flexibility. The Group intends to contribute to consolidation of the

VLGC industry, if possible.

Grow the fleet.. The Group will consider acquisitions of existing fleets or companies as well as buying

secondhand ships, although investments will be restricted as part of the amended loan agreements as set

out in Section 11.8.2 "The Bank Debt Amendments". The Group may also utilise opportunities for sale of

existing ships in order to maximise shareholder value.

Chartering strategy focused on spot market exposure. The chartering strategy of the Group will

continuously be evaluated on the basis of the prevailing market conditions and market outlook. The Group

primarily operates in the spot market. Based on prevailing market conditions, the Group aims to combine

spot market exposure with a portfolio of contract of affreightments, primarily with floating, market related

pricing formulas, to ensure maximum utilisation of its fleet and to be able to capture the recovery of the

freight market once it occurs. Strategic customers may be offered time charter contracts as well, if and

when terms and conditions are deemed attractive.

Maintain a strong balance sheet with attractive financing terms. The Group will continuously seek to

maintain a strong balance sheet with sufficient flexibility for operations and further growth. Further, the


37

Company has access to utilising the equity and debt capital markets, if deemed attractive.

8.4 History and important events

The Group was established by Stolt-Nielsen Gas Ltd ("Stolt-Nielsen Gas") to exploit opportunities in the fast growing

global LPG market, mainly driven by associated natural gas and LNG based LPG production and exports in the Middle

East. The Group acquired its first VLGC late 2009 with delivery early 2010 (Avance). The Group's strategy was to offer

consolidation opportunities to shipowners and thereby being able to offer its customers more efficient and flexible

freight solutions.

Late 2010, the Group acquired three VLGCs in a share/cash transaction, and Sungas Holdings Ltd ("Sungas") became

a 50% shareholder in Avance Gas, alongside Stolt-Nielsen Gas. In the summer of 2012, the Group acquired Maran

Gas' VLGCs in a cash transaction, adding two ships to the fleet, then consisting of six modern VLGCs.

In June 2012, Avance Gas reached agreement with Transpetrol Shipping Ltd. ("Transpetrol") whereby Transpetrol

sold its two VLGCs, Prospect and Progress, to the Group in return for cash and 1/3 shareholding in Avance Gas. In July

2013, Transpetrol exercised a call option to buy back the two VLGCs previously sold to the Group, and a put option to

simultaneously sell its shares in Avance Gas back to Avance Gas. The ship sale and share purchase was completed in

August 2013.

In August 2013, Avance Gas entered into an agreement with Frontline 2012 Ltd ("Frontline 2012"), pursuant to

which Frontline 2012 would become a shareholder in Avance Gas alongside Stolt-Nielsen Gas and Sungas. The

transaction was finalised on 2 October 2013 with Frontline 2012 subscribing for Shares bringing its shareholding in

Avance Gas to 37.5% in a USD 70 million share issue.

On 16 October 2013, Stolt-Nielsen Gas, Sungas and Frontline 2012 agreed to convert each of their shareholder loans

outstanding to equity at USD 11.78 per Share. Avance Gas issued approximately 2.8 million Shares to each of the

shareholders.

On 17 October 2013, Frontline 2012 distributed 12.5% of the shares to its shareholders as a dividend in specie,

reducing its holding in Avance Gas to 25%. On the same day, Avance Gas' Shares were registered on the N-OTC list

with ticker symbol "AGHL".

In November 2013, Avance Gas completed a USD 100 million private placement of approximately 5.9 million new

Shares at a price of USD 17.00 per share. Following the private placement, the shareholdings of Stolt-Nielsen Gas and

Sungas were reduced to 25.8% each, and Frontline 2012's shareholding was reduced to 22.6%. Avance Gas also

entered into the newbuilding acquisition agreement with Frontline 2012 regarding the post-delivery acquisition of

Frontline 2012's VLGC newbuilding program, comprising eight VLGCs built at the Jiangnan shipyard, expanding the

fleet to 14 ships.

On 9 April 2014, Avance Gas announced the successful completion of a USD 275 million initial public offering, of which

Avance Gas received gross proceeds of USD 100 million. The first day of listing on the Oslo Stock Exchange was 15

April 2015.

During 2015, the Group took delivery of all eight newbuildings under the newbuilding acquisition agreement.

8.5 The fleet

The following table presents certain information with respect to the VLGCs in the Group's fleet:

Name Year built Shipyard

Capacity

(cbm) Charter type Flag

Ownership

(%)

Classification

society

Avance 2003 KHI 82,557 Spot market Marshall

Island

100% ABS

Iris Glory 2008 DSME 83,783 Spot market Marshall

Island

100% DNV GL

Thetis Glory 2008 DSME 83,783 Spot market Marshall

Island

100% DNV GL

Venus Glory 2008 DSME 83,765 Spot market Marshall

Island

100% DNV GL

Providence 2008 DSME 84,597 Spot market Marshall

Island

100% DNV GL


38

Name Year built Shipyard

Capacity

(cbm) Charter type Flag

Ownership

(%)

Classification

society

Promise 2009 DSME 84,597 Spot charter Marshall

Island

100% DNV GL

Mistral 2015 Jiangnan 83,000 Spot market Marshall

Island

100% Lloyds

Monsoon 2015 Jiangnan 83,000 Spot market Marshall

Island

100% Lloyds

Breeze 2015 Jiangnan 83,000 Spot market Marshall

Island

100% Lloyds

Passat 2015 Jiangnan 83,000 Spot market Marshall

Island

100% Lloyds

Sirocco 2015 Jiangnan 83,000 Spot market Marshall

Island

100% Lloyds

Levant 2015 Jiangnan 83,000 Spot market Marshall

Island

100% Lloyds

Chinook 2015 Jiangnan 83,000 Spot market Marshall

Island

100% Lloyds

Pampero 2015 Jiangnan 83,000 Spot market Marshall

Island

100% Lloyds

Total (14 ships) 1,167,082

In September 2016, Avance Gas reached an agreement to sell the 1980-built LNG carrier Gaea, with delivery and

payment in December 2016. The sale proceeds correspond to the book value and will generate approximately USD

13.3 million in net cash proceeds.

The following table presents the utilisation with respect to the Group's VLGCs.

Nine months

ended 30

September

Twelve months

ended

31 December

Thirteen months

ended

31 December

Twelve months

ended

31 November

2016

(unaudited)

2015

(unaudited)

2014

(unaudited)

2013

(unaudited)

Avance Gas VLGC utilisation. .................................... 92.1% 96.8% 95.7% 93.5%

1 Utilisation rate is defined as operating days less waiting days compared to operating days. Operating days is defined as calendar days less off-hire days.

8.6 Technical and crew management of the fleet

8.6.1 Management of the fleet

The Group outsources technical and crew management of its fleet. The technical and crew management relate to

manning of the Group's vessels, storing, maintenance and repair as well all other elements of running each of the

Group's vessels. Technical management also includes ensuring that the Group's vessels operate in compliance with

rules and regulations applicable to the operation of the ships, maintaining its Marshall Island flag, and maintaining

classification societies. Avance, Mistral, Monsoon, Breeze, Passat, Sirocco and Levant are managed by Exmar

Shipmanagement NV, while Iris Glory, Thetis Glory, Venus Glory, Providence, Promise, Chinook and Pampero are

operated by Northern Marine Management Ltd, a company in the Stena group.

The Group's technical department has one employee and one consultant working with the external technical

managers.

8.6.2 Exmar Shipmanagement NV

The Group entered into a management agreement with Exmar Shipmanagement NV relating to Avance, dated 14

January 2010. The agreement is based on the "Shipman 98" standard ship management agreement. Exmar

Shipmanagement NV provides both crew management and technical management services under the agreement. The

annual management fee under the agreement is EUR 180,000. The agreement may be terminated by either party with

two months written notice, and with immediate effect in the event of inter alia default of certain provisions of the

agreement or in case of a sale of the ship or if the ship becomes a total loss, is declared as a constructive,

compromised or arranged total loss or is requisitioned, or in the event of liquidation or bankruptcy of either party.

The Group further entered into management agreements with Exmar Shipmanagement NV relating to Mistral,

Monsoon, Breeze and Passat, dated 25 June 2014, and for Sirocco and Levant, dated 15 September 2014. The


39

agreements are based on "Shipman 98" standard ship management agreement. Exmar Shipmanagement NV provides

both crew management and technical management services under the agreements. The annual management fee

under the agreement is USD 205,000. The agreements may be terminated by either party with two months written

notice, and with immediate effect in the event of inter alia default of certain provisions of the agreement or in case of

a sale of the ship or if the ship becomes a total loss, is declared as a constructive, compromised or arranged total loss

or is requisitioned, or in the event of liquidation or bankruptcy of either party.

8.6.3 Northern Marine Management Ltd

The Group entered into management agreements with Northern Marine Management Ltd relating to Iris Glory, Thetis

Glory and Venus Glory, all dated 29 November 2010. The agreements are based on the "Shipman 98" standard ship

management agreement. Northern Marine Management Ltd provides both crew management and technical

management services under the agreements. The annual management fee under each agreement is USD 220,000.

Each agreement may be terminated by either party with two months written notice, and with immediate effect in the

event of inter alia default of certain provisions of the agreement or in case of a sale of the ship or if the ship becomes

a total loss, is declared as a constructive, compromised or arranged total loss or is requisitioned or in the event of

liquidation or bankruptcy of either party.

The Group further entered into management agreements with Northern Marine Management Ltd relating to Providence

and Promise, dated 16 September 2013 and relating to Chinook and Pampero dated 17 September 2014. The

agreements are based on the "Shipman 2009" standard ship management agreement. Northern Marine Management

Ltd provides both crew management and technical management services under the agreements. The annual

management fee under each agreement is USD 220,000. The duration of each agreement is one year, and each

agreement may thereafter be terminated by either party with two months written notice. Each agreement may be

terminated with one month written notice in the event the parties fail to agree on the annual budget, any change of

the ship's flag or a reduction in the management fee in the event of a lay-up, the result of which will be the expiry of

the agreement at the end of the current budget period or on expiry of the notice period (whichever is the later). Each

agreement may be terminated with immediate effect in the event of inter alia default of certain provisions of the

agreement or in case of a sale of the ship or if the ship becomes a total loss, is declared as a constructive,

compromised or arranged total loss, is requisitioned, has been declared missing, or in the event of liquidation or

bankruptcy of either party.

8.7 Legal proceedings

From time to time, Avance Gas and other companies in the Group could be involved in litigation, disputes and other

legal proceedings arising in the normal course of its business.

Neither Avance Gas nor any other company in the Group is, nor has been, during the course of the preceding twelve

months involved in any legal, governmental or arbitration proceedings which may have, or have had in the recent

past, significant effects on Avance Gas' and/or the Group's financial position or profitability, and Avance Gas is not

aware of any such proceedings which are pending or threatened.

8.8 Material contracts

Neither Avance Gas nor any member of the Group has entered into any material contracts outside the ordinary course

of business for the two years prior to the date of this Prospectus. Further, the Group has not entered into any other

contract outside the ordinary course of business which contains any provision under which any member of the Group

has any obligation or entitlement.

Below is an overview of the main categories of contracts entered into by the Group in the ordinary course of business:

Voyage charter agreements and spot related time charter contracts: Currently, all of the Group's ships

operate in the spot market on a voyage charter basis or short time charter contracts. Pursuant to the

voyage charter agreements, the Group receives one payment upon discharge derived by multiplying the

tons of cargo loaded on board by the agreed upon freight rate expressed on a per cargo ton basis. The

Group is responsible for the payment of all expenses, including voyage expenses (e.g. bunker fuel, agency,

security and port costs), operating expenses and capital costs of the vessel.

Spot related time charter agreements: The Group also charters out its VLGCs for shorter fixed charter

periods. Under time charters, vessels are chartered to customers for fixed periods of time at rates that are

generally fixed. The charterer pays all voyage costs. The owner of the vessel receives monthly charter


40

payments in advance on a per day or per month basis and is responsible for the payment of all operating

expenses (including manning, maintenance, repair and docking) and capital costs of the vessel.

Management agreements: For a description of the Group's management agreements, see Section 8.6

"Technical and crew management of the fleet".

8.9 Regulations

Governmental and international agencies extensively regulate the carriage, handling, storage and regasification of

LPG.

These regulations include, but are not limited to, the International Convention on Civil Liability for Bunker Oil Pollution

Damage, the International Convention on Liability and Compensation for Damage in Connection with Carriage of

Hazardous and Noxious substances by Sea, the U.S. Pollution Act of 1990, the Maritime Labour Convention of 2006,

the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships of 2009, the Ship

Recycling Regulation adopted by the European Council in 2013, the Maritime Transportation Security Act of 2002, the

International Maritime Organization's ("IMO") International Convention for the Safety of Life at Sea, IMO's

International Ship and Port Facilities Security Code, the International Convention for the Control and Management of

Ships' Balast Water and Sediments, MARPOL 73/78 and the International Standards for Safe Management and

Operation of Ships and Pollution Prevention.

In certain circumstances, these regulations may impose strict liability, which may render companies in the Group liable

for environmental and natural resource damages without regard to negligence or fault on the part of the Group.

Implementation of new environmental laws or regulations that may apply to the industry in which the Group operates

may impact the Group's business activity, financial condition or results of operations. See Section 2 "Risk factors" for

an overview of risk factors relating to environmental laws and regulations applicable to the Group.

8.10 Insurance

The operation of any ocean going ship represents a potential risk of major marine losses and liabilities, death or injury

of persons, as well as property damage caused by adverse weather conditions, collisions, mechanical failure, human

error, war, terrorism, piracy and other circumstances or events. In addition, the transportation of gas is subject to the

risk of pollution. The occurrence of any of these events may result in loss of assets or a liability to a third party.

As an integral part of its operations as a gas transporter, Avance Gas carries hull and machinery and increased value

insurances. Such insurances are purchased to protect the Group against the majority of the accident related risks

involved in the conduct of its marine operations. Hull and machinery insurance covers loss of or damage to the ship

resulting from, among other things, marine perils such as mechanical failure, grounding, damage due to collision or

caused by crew negligence or adverse weather conditions. Under the hull and machinery and increased value

insurances, the ships are each covered against total loss situations based on replacement value and potential hire loss

and extra expenses. The deductible for each loss is USD 250,000 and nil for total loss situations. Protection and

indemnity insurance indemnifies the Group against liabilities incurred in connection with the operation of its ships,

including death or injury to its crew or third party, collision, cargo loss, pollution, and damage to third party property.

The current limit for pollution cover is USD 1 billion per ship per incident. Avance Gas also carries insurance for war

risk, including piracy and terrorism, and loss of revenue or hire following a loss resulting from perils under the war risk

policy.

The Management believes that the Group's current insurance program is adequate to protect Avance Gas against the

majority of accident related risks involved in the conduct of its business and that an appropriate level of protection and

indemnity against pollution liability and environmental damage is maintained. However, there can be no assurance

that the range of risks the Group is exposed to are adequately insured against, that any claim will be paid or that the

Group in the future will be able to procure similar adequate insurance coverage at the terms and conditions equal to

those it currently has. More stringent environmental and passenger liability regulations have resulted in increased

exposures and insurance costs and may in certain circumstances be difficult to insure or even become uninsurable.

The Group's goal is to maintain an adequate insurance coverage required by its marine operations and to actively

monitor any new regulations and threats that may require the revision of its existing insurance coverage.

8.11 Environmental, health and safety policy

Safety is a top operational priority for Avance Gas. The Group's vessels are operated in a manner intended to protect

the safety and health of the crew, the general public and the environment, ship and property, and Avance Gas is


41

continuously working to reduce the emissions from its fleet.

Avance Gas' fleet is operated under an environmental policy according to ISO 14001 with focus on making efforts in

order to run the fleet in the most efficient way and always considering energy saving. Well-developed procedures are

implemented onboard the fleet and in the shore organisation in order to reduce the Group's impact on the

environment, and to have as safe work environment as possible. Avance Gas' policy is to always have energy efficient

ships operated under full compliance with existing requirements.

A formal training program, including computer based training and drills, is provided for all onboard personnel. All

officers and crew are encouraged to report near misses and incidents in order to have improvements and triggering

Avance Gas' safety culture. Proper personal protective equipment are always used while onboard, and daily safety

meetings are an important part of the Group's safety culture. Safety has always the highest priority and the Group is

striving for zero accidents.

8.12 Dependency on contracts, patents, licenses etc

It is Avance Gas' opinion that the Group's existing business or profitability is not dependent upon any contracts. It is

further the opinion of Avance Gas that the Group's existing business or profitability is not dependent on any patents or

licences.

8.13 Competition

Avance Gas operates in a highly competitive environment, where competitors offer similar transportation services with

their fleets having all necessary approval and vettings to operate globally in the transportation of fully refrigerated

LPG. The Group's competition is from all other VLGCs. In the day-to-day the Group meets competition from other

owners with fleets in the spot market, such as BW LPG, Helios Pool (dominated by Dorian LPG), Atlantic Pool

(dominated by Aurora LPG), smaller independent shipowners and traders such as Astomos, Shell, Petredec and Statoil.

In addition, traders will seek to optimise their logistics though product swaps which may be considered as competition

to traditional freight enquiries.

As described in Section 7 "Industry and market overview", a significant number of newbuilding deliveries over the last

two years have contributed to increasing the global supply of VLGC vessels, and the current orderbook remains at

17% of the total VLGC fleet. Today, most of the large, listed VLGC owners (BW LPG, Aurora LPG and Dorian LPG, in

addition to Avance Gas) operate a higher number of vessels in the spot market than previously, due to newbuilding

deliveries and expiring time charter and CoA agreements. When supply of VLGC vessels exceeds demand of VLGC

vessels, there will be pressure on earnings for shipowners such as Avance Gas. Through primarily being exposed to the

spot market, Avance Gas is particularly exposed to competition.


42

9 CAPITALISATION AND INDEBTEDNESS

The information presented below should be read in conjunction with the other parts of this Prospectus, in particular

Section 10 "Selected financial and other information" and Section 11 "Operating and financial review", and the

Financial Statements and the Interim Financial Statements and related notes, incorporated by reference hereto, see

Section 19.3 "Incorporation by reference".

9.1 Introduction

This Section 9 provides information about the Group's unaudited capitalisation and net financial indebtedness on an

actual basis as of 30 September 2016, and in the "As adjusted 30 September 2016" columns, the Group's unaudited

capitalisation and net financial indebtedness as at 30 September 2016 on an adjusted basis to give effect to the

material post balance sheet events and effects of the Private Placement completed on 25 October 2016. Other than

the Private Placement, there has been no material change to the Group's capitalisation and net financial indebtedness

since 30 September 2016. For further details regarding the Private Placement, see Section 17 "The completed Private

Placement and the terms of the Subsequent Offering".

9.2 Capitalisation

In USD thousand

As of

30 September

2016

(unaudited)

Adjustment

for the Private

Placement

(unaudited)

As adjusted

30 September

2016

(unaudited)

Indebtedness

Total current debt:

Guaranteed and secured1 ....................................................................................................................... 43,9914 - 43,9914

Guaranteed but unsecured ..................................................................................................................... - - -

Secured but unguaranteed ..................................................................................................................... - - -

Unguaranteed and unsecured ................................................................................................................. 6,701 - 6,701

Total current debt .............................................................................................................................. 50,692 - 50,692

Total non-current debt:

Guaranteed and secured1 ....................................................................................................................... 530,2834 - 530,2834

Guaranteed but unsecured ..................................................................................................................... - - -

Secured but unguaranteed ..................................................................................................................... - - -

Unguaranteed and unsecured ................................................................................................................. - - -

Total non-current debt ....................................................................................................................... 530,283 - 530,283

Total indebtedness ............................................................................................................................ 580,975 - 580,975

Shareholders' equity

Share capital ........................................................................................................................................ 35,278 26,7505 62,028

Other contributed capital2 ...................................................................................................................... 445,156 28,5826 437,738

Accumulated other comprehensive loss3 .................................................................................................. (24,448) - (24,448)

Treasury shares .................................................................................................................................... (11,867) - (11,867)

Retained earnings (deficit) ..................................................................................................................... (47,549) - (47,549)

Total shareholders' equity ................................................................................................................. 396,570 55,332 451,902

Total capitalisation ............................................................................................................................ 977,545 55,332 1,032,877

1 Guaranteed by the Company and Avance Gas Ltd, and secured by the Group's VLGCs and excluding debt issuance costs of USD 4.9 million.

2 Other contributed capital consists of paid-in capital and contributed capital.

3 Accumulated other comprehensive loss consists of foreign currency reserve and fair value reserve.

4 Excludes debt issuance cost. See note 6 in the Interim Financial Statements as of, and for the three and nine month periods ended, 30 September

2016.

5 The share capital has been increased with USD 26,750 thousand by the issuance of 26,750,000 Private Placement Shares, each with a nominal value

of USD 1.00.

6 Other contributed capital has been increased with USD 28,582 thousand as a result of the Private Placement, calculated as the aggregate subscription

price for the Private Placement Shares of USD 55,332 thousand less the share capital increase of USD 26,750 thousand.


43

9.3 Net financial indebtedness

In USD thousand

As of

30 September

2016

(unaudited)

Adjustment

for the Private

Placement

(unaudited)

As adjusted 30

September

2016

(unaudited)

(A) Cash ................................................................................................................................................ 87,783 53,9821 143,115

(B) Cash equivalents ............................................................................................................................... - - -

(C) Trading securities .............................................................................................................................. - - -

(D) Liquidity (A)+(B)+(C) ................................................................................................................... 87,783 53,982 143,115

(E) Current financial receivables ............................................................................................................... 18,012 - 18,012

(F) Current bank debt ............................................................................................................................. - - -

(G) Current portion of non-current debt ..................................................................................................... 43,991 - 43,991

(H) Other current financial debt ................................................................................................................ 6,701 - 6,701

(I) Current financial debt (F)+(G)+(H) ............................................................................................... 50,692 - 50,692

(J) Net current financial indebtedness (I)-(E)-(D) .............................................................................. (55,103) (53,982) (110,435)

(K) Non-current bank loans ...................................................................................................................... 530,283 - 530,283

(L) Bonds issued ..................................................................................................................................... - - -

(M) Other non-current loans..................................................................................................................... - - -

(N) Non-current financial indebtedness (K)+(L)+(M) ......................................................................... 530,283 - 530,283

(O) Net financial indebtedness (J)+(N) ............................................................................................... 475,180 (53,982) 419,848

1 The cash has increased with USD 53,982 thousand as a result of the Private Placement, calculated as the aggregate subscription price for the Private

Placement Shares of USD 55,332 thousand less estimated costs and expenses related to the Private Placement of USD 1,350 thousand.

9.4 Working capital statement

The Company is of the opinion that the working capital available to the Group is sufficient for the Group's present

requirements, for the period covering at least 12 months from the date of this Prospectus.

9.5 Contingent and indirect indebtedness

As at 30 September 2016 and as at the date of the Prospectus, the Group did not have any contingent or indirect

indebtedness.


44

10 SELECTED FINANCIAL AND OTHER INFORMATION

10.1 Introduction and basis for preparation

Historically, the Group has reported its consolidated financial statements on the basis of a financial year which ended

on 30 November each year. For the financial year 2014, the Group changed its financial year end date to 31

December. As a result, the financial statements for the year 2014 covers a thirteen month period starting on 1

December 2013 and ending on 31 December 2014.

The following selected financial information has been derived from (i) the Group's unaudited consolidated interim

financial statements as of, and for the three and nine month periods ended, 30 September 2016 and 2015 (the

Interim Financial Statements) and (ii) the Group's audited consolidated financial statements (a) as of, and for the year

ended, 31 December 2015, (b) as of, and for and the thirteen month period ended 31 December 2014 and (c) as of,

and for the financial year ended 30 November 2013 (collectively, the Financial Statements). The Financial Statements

have been prepared in accordance with IFRS, while the Interim Financial Statements have been prepared in

accordance with IAS 34.

The selected financial information included herein should be read in connection with, and is qualified in its entirety by

reference to the Financial Information incorporated by reference hereto, see Section 19.3 "Incorporation by reference".

10.2 Summary of accounting policies and principles

For information regarding accounting policies and the use of estimates and judgments, see note 2 of the Financial

Statements as of, and for the year ended, 31 December 2015, incorporated by reference hereto, see Section 19.3

"Incorporation by reference".

10.3 Selected statement of income

The table below sets out selected data from the Company's unaudited consolidated interim income statement and

statement of comprehensive income for the three and nine month periods ended 30 September 2016 and 2015 and

from the Company's audited consolidated statements of income and consolidated statements of comprehensive income

for the year ended 31 December 2015, the thirteen month period ended 31 December 2014 and the financial year

ended 30 November 2013.


30 September

Nine months ended 30

September

Twelve

months

ended 31

December

Thirteen

months

ended 31

December

Twelve

months

ended 30

November

2016

(unaudited)

2015

(unaudited)

2016

(unaudited)

2015

(unaudited)

2015

(audited)

2014

(audited)

2013

(audited)

Operating revenue .............................................................................................. 25,720 109,943 116,119 226,751 310,873 180,406 115,000

Voyage expenses ................................................................................................... (12,780) (15,499) (35,511) (33,188) (46,218) (41,837) (41,226)

Operating expenses ............................................................................................... (9,480) (7,727) (29,886) (19,560) (29,139) (21,597) (22,809)

Administrative and general

expenses .............................................................................................................. (1,710) (1,409) (5,390) (5,725) (7,843) (7,842) (4,125)

Operating profit before

depreciation expense .......................................................................................... 1,750 85,308 45,332 168,278 227,673 109,130 46,840

Depreciation and amortisation

expense................................................................................................................ (10,510) (8,833) (31,567) (21,751) (31,483) (20,938) (23,667)

Impairment charge on goodwill ............................................................................... (1,886) - (1,886) - - - -

Impairment charge on vessels ................................................................................. (45,298) - (51,426) - - - -

Operating profit (loss) ........................................................................................ (55,944) 76,475 (39,547) 146,527 196,190 88,192 23,173

Non-operating income

(expenses):

Finance expense .................................................................................................... (4,787) (3,587) (14,548) (8,612) (12,932) (4,693) (12,623)

Finance income ..................................................................................................... 1 31 3 141 131 302 25

Loss on early extinguishment of

debt ..................................................................................................................... - - - - - (1,915) (1,205)

Other non-operating income ................................................................................... - - - - - - 1,881

Foreign currency exchange gain

(loss) ................................................................................................................... (9) (88) (48) (27) (220) 91 251

Profit (loss) before income tax ........................................................................... (60,739) 72,831 (54,140) 138,029 183,169 81,977 11,502

Income tax expense ............................................................................................... - - - (7) (8) (210) -


45


30 September

Nine months ended 30

September

Twelve

months

ended 31

December

Thirteen

months

ended 31

December

Twelve

months

ended 30

November

2016

(unaudited)

2015

(unaudited)

2016

(unaudited)

2015

(unaudited)

2015

(audited)

2014

(audited)

2013

(audited)

Net profit (loss) .................................................................................................. (60,739) 72,831 (54,140) 138,022 183,161 81,767 11,502

Earnings per share ................................................................................................. (1.77) 2.12 (1.57) 4.02 5.33 2.43 0.73

Earnings per share (diluted) ................................................................................... (1.77) 2.11 (1.57) 4.01 5.31 2.43 0.73

Other comprehensive income

(loss):

Fair value adjustment of interest

rate swaps ............................................................................................................ 1,020 (9,869) (16,950) (10,169) (7,573) - -

Exchange differences arising on

translation of foreign operations .............................................................................. (2) (27) 135 11 139 (96) (50)

Other comprehensive income (loss) ......................................................................... 1,018 (9,896) (16,815) (10,158) (7,434) (96) (50)

Total comprehensive income

(loss) .................................................................................................................. (59,721) 62,935 (70,955) 127,864 175,727 81,671 11,452

10.4 Selected statement of financial position

The table below sets out selected data from the Company's unaudited consolidated interim statement of financial

position as at 30 September 2016 and from the Company's audited consolidated statement of financial position as at

31 December 2015 and 2014 and as at 30 November 2013.

In USD thousand

As at

30

September

As at

31 December

As at 30

November

2016

(unaudited)

2015

(audited)

2014

(audited)

2013

(audited)

ASSETS

Current assets:

Cash and cash equivalents ...................................................................................... 87,783 70,033 162,279 199,883

Restricted cash ...................................................................................................... - - - 10,798

Receivables ........................................................................................................... 18,012 71,238 21,509 6,654

Related party receivables balances........................................................................... 4 27 445 450

Inventory ............................................................................................................. 4,412 4,895 3,546 4,605

Prepaid expenses ................................................................................................... 2,292 2,635 974 691

Other current assets .............................................................................................. 1,969 1,962 1,275 1,119

Asset held for sale ................................................................................................. 13,369 - - -

Total current assets ............................................................................................ 127,841 150,790 190,028 224,200

Property, plant and equipment ................................................................................ 870,156 965,742 365,669 378,711

Newbuilding deposit ............................................................................................... - - 139,200 -

Goodwill and intangible assets ................................................................................. 291 2,262 2,374 1,886

Total non-current assets ..................................................................................... 870,447 968,004 507,243 380,597

Total assets ........................................................................................................ 998,288 1,118,794 697,271 604,797

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt ............................................................................ 42,931 42,931 18,055 69,218

Revolving credit facility........................................................................................... - 50,000 - -

Accounts payable ................................................................................................... 1,942 1,003 327 1,952

Current portion of derivative financial instruments ..................................................... 1,360 - - -

Related party payable balances ............................................................................... 19 58 495 399

Accrued voyage expenses ....................................................................................... 4,135 6,723 453 2,095

Accrued expenses .................................................................................................. 605 886 3,356 3,787

Other current liabilities ........................................................................................... 1,117 1,243 691 1,237

Total current liabilities ........................................................................................ 52,109 102,844 23,377 78,688

Long-term debt ..................................................................................................... 376,446 508,432 165,391 133,744

Long-term revolving credit facilities ......................................................................... 150,000 - - -


46

In USD thousand

As at

30

September

As at

31 December

As at 30

November

2016

(unaudited)

2015

(audited)

2014

(audited)

2013

(audited)

Long-term derivative financial instruments ............................................................... 23,163 7,573 - -

Total non-current liabilities ................................................................................ 549,609 516,005 165,391 133,744


Share capital ......................................................................................................... 35,278 35,278 35,278 30,384

Paid-in capital ....................................................................................................... 350,359 350,359 350,359 260,408

Contributed capital................................................................................................. 94,797 94,531 94,673 94,373

Retained earnings (deficit) ...................................................................................... (47,549) 39,277 28,392 7,303

Treasury shares ..................................................................................................... (11,867) (11,867) - -

Accumulated other comprehensive loss .................................................................... (24,448) (7,633) (199) (103)

Total shareholders' equity .................................................................................. 396,570 499,945 508,503 392,365

Total liabilities and shareholders' equity ............................................................ 998,288 1,118,794 697,271 604,797

10.5 Selected statement of cash flow

The table below sets out selected data from the Company's unaudited consolidated interim statement of cash flows for

the nine month periods ended 30 September 2016 and 2015 and from the Company's audited consolidated statement

of cash flows for the year ended 31 December 2015, the thirteen month period ended 31 December 2014 and the

financial year ended 30 November 2013.


30 September

Twelve

months

ended 31

December

Thirteen

months

ended 31

December

Twelve

months

ended 30

November

2016

(unaudited)

2015

(unaudited)

2015

(audited)

2014

(audited)

2013

(audited)

Cash generated from operations ......................................................................... 97,688 124,038 180,217 102,002 48,750

Debt issuance costs ............................................................................................... - (1,932) (2,400) (8,268) (260)

Interest paid ......................................................................................................... (13,167) (5,914) (10,650) (7,028) (12,790)

Net cash generated by operating activities ......................................................... 84,521 116,192 167,167 86,706 35,700

Cash flows (used in) provided by investing activities:

Capital expenditures .............................................................................................. (1,036) (433,850) (491,520) (4,770) (6,124)

Sale of assets ........................................................................................................ - - - - 132,880

Deposit for newbuildings ......................................................................................... - - - (139,200) -

Net cash (used in) provided by investing activities ............................................ (1,036) (433,850) (491,520) (143,970) 126,756

Cash flows (used in) provided by financing activities:

Proceeds from issuance of long-term debt ................................................................ - 350,000 400,000 200,000 -

Proceeds from revolving credit facility ...................................................................... - - 50,000 - -

Dividends ............................................................................................................. (32,686) (99,753) (172,276) (60,678) -

Repayment of shareholder loans .............................................................................. - - - - (63,379)

Increase in shareholder loans .................................................................................. - - - - 64,879

Repayment of long-term debt .................................................................................. (33,036) (18,973) (33,110) (214,491) (109,833)

Repayment of revolving credit facility ....................................................................... (25,000) - - - -

Drawdown of revolving credit facility ........................................................................ 25,000 - - - -

Issuance of shares ................................................................................................. - - - 94,845 168,511

Purchase of own shares .......................................................................................... - (12,757) (12,757) - (52,941)

Exercise of share options ........................................................................................ - 221 476 - -

Net cash (used in) provided by financing activities ............................................ (65,722) 218,738 232,333 19,676 7,237

Effect of exchange rate changes on cash .................................................................. (13) (12) (226) (16) (42)

Net (decrease) increase in cash and cash equivalents ........................................ 17,750 (98,932) (92,246) (37,604) 169,651

Cash and cash equivalents at beginning of period .............................................. 70,033 162,279 162,279 199,883 30,232

Cash and cash equivalents at end of period ........................................................ 87,783 63,347 70,033 162,279 199,883


47

10.6 Selected statement of changes in equity

The table below sets out selected data from the Company's unaudited consolidated statement of changes in equity for

the nine month period ended 30 September 2016 and from the Company's audited consolidated statement of changes

in equity for the year ended 31 December 2015, the thirteen month period ended 31 December 2014 and the financial

year ended 30 November 2013.

In USD thousand

Share

capital

Paid-in

capital

Contributed

capital

Retained

earnings

(deficit)

Accumulated

other

comprehen-

sive income

(loss)

Treasury

shares

Total

Balance at 30 November

2012 ............................................ 15,000 98,780 2,677 (4,199) (53)

-

112,205

Comprehensive loss:

Net profit ....................................... - - - 11,502 - - 11,502

Total comprehensive

income (loss) .............................. - - - 11,502 (50)

-

11,452

Transactions with

shareholders:

Issuance of 11,883 shares ............... 11,883 156,628 - - - - 168,511

Conversion of shareholders'

loan .............................................. 8,501 - 91,645 - -

-

100,146

Compensation expense for

share options ................................. - - - 51 - -

-

51

Reclassification due to

exercise of put option...................... (5,000) 5,000 - - -

-

-

Total transactions with

shareholders ............................... 15,384 161,628 91,696 - -

-

268,708

Balance at 30 November

2013 ............................................ 30,384 260,408 94,373 7,303 (103)

-

392,365

Comprehensive loss:

Net profit ....................................... - - - 81,767 - - 81,767

Other comprehensive

loss:

Translation adjustments,

net ............................................... - - - - (96)

-

(96)

Total other comprehensive

loss............................................... - - - - (96)

-

(96)

Total comprehensive loss ............ - - - 81,767 (96) - 81,671

Transactions with

shareholders:

Issuance of shares .......................... 4,894 89,951 - - - - 94,845

Dividends ...................................... - - - (60,678) - - (60,678)


share option .................................. - - 300 - -

-

300


shareholders ............................... 4,894 89,951 300 (60,678) -

-

34,467

Balance at 31 December

2014 ............................................ 35,278 350,359 94,673 28,392 (199)

-

508,503

Comprehensive income

(loss):

Net profit ....................................... - - - 183,161 - - 183,161

Other comprehensive

loss:

Fair value adjustment of

interest swaps ................................ - - - - (7,573)

-

(7,573)


net ............................................... - - - - 139

-

139



48

In USD thousand

Share

capital

Paid-in

capital

Contributed

capital

Retained

earnings

(deficit)

Accumulated

other

comprehen-

sive income

(loss)

Treasury

shares

Total

loss............................................... - - - - (7,434) - (7,434)

Total comprehensive

income (loss) .............................. - - - 183,161 (7,434)

-

175,727

Transactions with

shareholders:

Dividends ...................................... - - - (172,276) - - (172,276)


share options ................................. - - 334 - -

-

334

Purchase of treasury shares ............. - - - - - (12,757) (12,757)

Exercise of put options .................... - - (476) - - 890 414


shareholders ............................... - - (142) (172,276) -

(11,867)

(184,285)

Balance at 31 December

2015 ............................................ 35,278 350,359 94,531 39,277 (7,633)

(11,867)

499,945

Comprehensive income

(loss):

Net loss ......................................... - - - (54,140) - - (54,140)

Other comprehensive

loss:

Fair value adjustment of

interest swaps ................................ - - - - (16,950)

- (16,950)


net ............................................... - - - - 135

- 135


loss............................................... - - - - (16,815)

- (16,815)

Total comprehensive

income for the period .................. - - - (54,140) (16,815)

-

(70,955)

Transactions with

shareholders:

Dividends ...................................... - - - (32,686) - - (32,686)


share options ................................. - - 266 - -

-

266


shareholders ............................... - - 266 (32,686) -

- (32,420)

Balance at 30 September

2016 ............................................ 35,278 350,359 94,797 (47,549) (24,448) (11,867) 396,570

10.7 Sales revenues by geographic area

The Group's freight revenue was mainly generated in the Middle East for the nine month period ended 30 September

2016 and the twelve month period ended 31 December 2015, the thirteen month period ended 31 December 2014 and

the twelve month period ended 30 November 2013, when based on the region in which the cargo is loaded. In 2015,

the number of cargoes loaded in the US Gulf increased and was approximately 10% of the Group's number of voyages

in 2015 and approximately 23% of the number of voyages in nine month period ended 30 September 2016. The

Company expects its primary markets to be the same going forward.

For time charter revenue, while the Group is aware that the chartered ships have loaded in geographic regions other

than the Middle East, such as the U.S. Gulf, the Group is unaware of the geographic location from which the ships

generated their revenue.

10.8 Auditor

Avance Gas' auditor is PricewaterhouseCoopers AS, Dronning Eufemias gate 8, N-0191 Oslo, Norway.

PricewaterhouseCoopers AS is a member of The Norwegian Institute of Public Accountants (Nw.: Den Norske

Revisorforening). PricewaterhouseCoopers AS has been Avance Gas' auditor since 2014. Prior to this,

PricewaterhouseCoopers LLP was Avance Gas' auditor. PricewaterhouseCoopers LLP, 1 Embankment Place, London,


49

WC2N 6RH, United Kingdom, is registered to carry out audit work by The Institute of Chartered Accountants in

England and Wales (ICAEW). Avance Gas resolved to change its auditor to PricewaterhouseCoopers AS due to the

listing of its shares on the Oslo Stock Exchange and the Management being situated in Oslo, Norway. The Financial

Statements for the financial year 2013 have been audited by PricewaterhouseCoopers LLP, as set forth in their report

thereon included therein. The Financial Statements for the financial years 2014 and 2015 have been audited by

PricewaterhouseCoopers AS, as set forth in their report thereon included therein. The auditor's reports on the Financial

Statements are incorporated by reference hereto together with the Financial Statements. Neither

PricewaterhouseCoopers LLP nor PricewaterhouseCoopers AS has audited, reviewed or produced any report on any

other information provided in this Prospectus.


50

11 OPERATING AND FINANCIAL REVIEW

This operating and financial review should be read together with Section 10 "Selected financial and other information"

and the Financial Statements and Interim Financial Statements and related notes incorporated by reference hereto,

see Section 19.3 "Incorporation by reference". The following discussion contains forward-looking statements. These

forward-looking statements are not historical facts, but are rather based on the Group's current expectations,

estimates, assumptions and projections about the Group's industry, business and future financial results. Actual results

could differ materially from the results contemplated by these forward-looking statements because of a number of

factors, including those discussed in Section 2 "Risk factors" of this Prospectus and Section 4.3 "Cautionary note

regarding forward-looking statements" as well as other sections of this Prospectus.

11.1 Overview

11.1.1 General overview

The Group is one of the leading providers of marine transportation of fully refrigerated LPG based on the number of

vessels owned (see figure 6 in Section 7.3.2 "Vessel supply"). As of the date of this Prospectus, the Group owns and

operates a fleet consisting of fourteen VLGCs.

11.1.2 Presentation of financial information

The Financial Statements as of, and for the year ended, 31 December 2015, as of, and for the thirteen month period

ended, 31 December 2014 and as of, and for the financial year ended, 30 November 2013 have been prepared in

accordance with IFRS. The Financial Statements for 2015 and 2014 have been audited by PricewaterhouseCoopers AS, while the Financial Statements for 2013 have been audited by PricewaterhouseCoopers LLP. The unaudited Interim

Financial Statements as of, and for the three and nine month periods ended, 30 September 2016 and 2015 have been

prepared in accordance with IAS 34. The Financial Statements and the Interim Financial Statements are incorporated

by reference hereto, see Section 19.3 "Incorporation by reference".

11.2 Recent developments and trends

Below is an overview of the developments and trends in the Group's business since 31 December 2015:

The VLGC freight market has remained volatile, and spot freight rates have in general been trending negatively, partly

driven by deliveries of newbuildings. The Group has responded to the market situation by cutting dividend payments,

first by 50% and then to zero, by pursuing cost-cutting initiatives, and by intensifying the efforts to retrieve

outstanding demurrage receivables.

In September 2016, Avance Gas reached an agreement to sell the 1980-built LNG carrier Gaea, with delivery and

payment in December 2016. The sale proceeds correspond to the book value and will generate approximately USD

13.3 million in net cash proceeds, further strengthening the liquidity of the Group. As of 30 September 2016, the

Company had a cash position of USD 88 million and is in compliance with all its financial covenants. However, the

current VLGC spot rates are below break-even levels for the Company estimated to be USD 17,896 per day for 2017

(taking into account the interest rate swap agreements commencing in Q2 2017), and based on expected newbuilding

deliveries to the global VLGC fleet, as further set out in Section 7 "Industry and market overview", the spot rates could

potentially remain below break-even levels for a prolonged period. This would lead to a deteriorating cash position and

potentially to a breach of the minimum liquidity covenant of the Company. In addition, a potential further decline in

asset values could potentially lead to a breach of the minimum value to outstanding loan covenants of the Company.

While the Company remains positive to the long-term fundamentals of the LPG freight market, the Company concluded

that it was required to address the financial position of the Company, in particular the bank debt amortisation

schedule, the cash position of the Company and the covenants in the bank debt, in order to remove uncertainty for all

stakeholders and remain compliant with its financial covenants even in a scenario where the freight market remains

challenging for the next two and a half years. As a result, on 19 October 2016, the Group agreed with its lending

banks to certain amendments to its bank loan facilities in order to prepare the Group for a scenario with a prolonged

market downturn and on 25 October the Private Placement was completed. See Section 11.8.2 "The Bank Debt

Amendments" for a description of the amendments to the bank loan facilities and Section 17.1 "The completed Private

Placement" for a description of the Private Placement.

11.3 Key drivers affecting the Group's results of operations and financial performance

The Group believes that the following factors have contributed significantly to the development of its business and

results of operations, and believes that each may continue to have a significant effect in the future.


51

11.3.1 Sailed-in results

The Group defines sailed-in results as the income from its time charters and spot voyages for owned and operated

ships. Sailed-in results are computed as gross freight income net of broker commissions and voyage expenses.

11.3.2 Voyage expenses

Voyage expenses are expenses related to a spot voyage, including bunker fuel, port fees, canal tolls and agency fees.

11.3.3 Operating days

The Group defines operating days as the total number of days in which an owned or operated ship is employed and

generating revenue, either through spot voyages or time charters. Operating days include waiting days and is defined

as calendar days less off hire days.

11.3.4 Off hire days

The Group defines off hire days as the total number of days in which an owned or operated ship is not employed due

to technical maintenance, repair or dry-docking.

11.3.5 Sailed-in results per operating day

The Group defines sailed-in results per operating day as the sailed-in results per VLGC per operating day. Sailed-in

results per operating day are a measure of how well the Group manages the fleet commercially.

11.3.6 Waiting days

The Group defines waiting days as the number of days the ships are unemployed for market reasons. Waiting days per

ship are calculated as total waiting days for owned and operated ships divided by the total owned and operated ships.

11.3.7 Operating revenue

Operating revenue primarily consists of revenue received from operating VLGCs on spot voyages. In addition, the

Group receives revenue from short to medium-term time charters. A spot voyage is typically a single round-trip

voyage that is priced on a current or spot market rate while under a time charter, ships are chartered to customers for

fixed periods of time at rates that are generally fixed.

The Group's revenue is driven primarily by the number of ships in the fleet, the number of days during which the ships

in the fleet operate and the freight rates that the Group's ships earn under spot voyages and time charters.

Freight rates are determined by market forces based on various factors, such as supply and demand for LPG and the

number of ships available. Under time charter arrangements, rates are fixed at the time of the agreement and so they

reflect the prevailing spot market rates and expectations of future time charter rates at the time in which the time

charters are entered. Below is an overview of the Group's average time charter equivalent rate per day (defined as

operating revenue less voyage expenses divided by the number of operating days) for the periods covered by the

historical financial information included in this Prospectus.

In USD

Nine months ended

30 September

Twelve

months

ended 31

December

Thirteen

months

ended 31

December

Twelve

months

ended 30

November

2016

(unaudited)

2015

(unaudited)

2015

(unaudited)

2014

(unaudited)

2013

(unaudited)

Average time charter equivalent rate per day ............................................................ 21,226 85,169 77,038 50,294 27,084

11.3.8 Operating expenses

Operating expenses primarily consist of costs directly associated with the operation and maintenance of the VLGCs.

These types of costs include time charter costs, bunker fuel costs, port charges, voyage insurance, crewing costs (for

example, ship personnel and benefits), depreciation expense, sublet costs, repairs and maintenance of VLGCs,

commission expenses, insurance premiums and other ship owning expenses (for example, agency fees, provisions and

ship supplies).

Bunker expenses comprised approximately 41% and 42% of total expenses (excluding depreciation and time charter

expenses) for the nine month periods ended 30 September 2016 and 2015 and are highly dependent on bunker fuel


52

prices. The following table sets forth the average bunker fuel prices for the periods indicated:

In USD

Nine months ended

30 September

Twelve

months

ended 31

December

Thirteen

months

ended 31

December

Twelve months

ended 30

November

2016 2015 2015 2014 2013

Average bunker fuel price per ton ............................................................................ 202 369 340 602 611

Port charges represent a material portion of total voyage expenses and varied in accordance with the number of ships

owned or operated by the Group. Port charges are generally incurred in the local currency of the port so exposes the

Group to exchange rate fluctuations.

The Group has contracted with external parties for shipowning services such as crewing, maintenance and repair,

provisions and other owning expenses. While crewing expenses do not vary per ship per day significantly, the Group is

exposed to exchange rate fluctuations and inflation adjustments. The Group's maintenance and repair costs tend to

increase or decrease with the age of the fleet. Actual costs for maintenance are expensed as incurred. In general,

most of the Group's shipowning costs are non-variable. After the Company's newbuilding deliveries during 2015,

operating expenses per ship per day has decreased, as the newbuildings have been more cost-efficient than the older

ships. Apart from that, operating expenses of the Company has been fairly stable and expected to remain stable,

adjusted for cost inflation.

Insurance costs are affected by general pricing trends in the insurance market, the size, age and composition of the

fleet and the Group's claims track record.

Depreciation is based on the cost of the ship less its estimated residual value. To comply with industry certification or

governmental requirements, the Group's ships are required to undergo planned dry-docking for major repairs and

maintenance, which cannot be carried out while the ships are operating. The Group capitalises costs associated with

dry-docking and amortises them on a straight-line basis over the duration of the dry-docking cycle.

11.3.9 Administrative and general expenses

Administrative and general expenses primarily consist of the salary and benefits of the Group's employees, along with

professional fees, office rent and other office expenses, travel and entertainment costs and information technology and

communication expenses. These costs are primarily in NOK and, as such, include exposure to exchange rate

fluctuations as well as to inflation.

11.3.10 Interest rate fluctuations

The interest rates on the Group's debt issuances are based on LIBOR plus a margin. Increases in LIBOR would result in

an increase in the interest payments affecting the results of operations of the Group. The Company has hedged USD

300,000 thousand of the floating interest rate exposure through interest rate swap agreements commencing in Q2

2017 and maturing in 2025.

11.3.11 Foreign currency fluctuations

The Group has certain expenses, such as port charges and administrative and general expenses, that are in currencies

other than USD. Weakening of NOK or other foreign currencies against USD could result in a reduction of net income.

11.3.12 Seasonality

The export volumes coming out of the Middle East LPG market, which has historically been the Group's primary

market, have traditionally been lower in the late fourth and the beginning of the first quarter than at other times of the

fiscal year. This is mainly because of lower production and somewhat higher local demand. This normally results in an

oversupply of shipping capacity and higher volatility which consequently produces lower freight rates during this

period.

11.3.13 Cyclicality

In the past, the market for shipping LPG has been highly cyclical and volatile. See also Section 2.1 "Risks related to

the industry in which the Group operates — The Group's business, results of operations and financial condition depend

on the level of activity in the LPG industry".


53

11.3.14 Certain financial information regarding the fleet

The following table sets forth, for the periods indicated, certain financial information in respect of the Group's fleet:

Nine months ended

30 September

Twelve

months

ended 31

December

Thirteen

months

ended 31

December

Twelve

months

ended 30

November

2016

(unaudited)

2015

(unaudited)

2015

(unaudited)

2014

(unaudited)

2013

(unaudited)

Average time charter equivalent rate per day (in USD) ............................................... 21,226 85,169 77,038 50,294 27,084

Ship owning expenses/calendar day (in USD) ............................................................ 7,791 7,958 7,844 9,090 8,476

Average number of owned VLGCs ............................................................................ 14.0 9.0 10.2 6.0 7.4

11.4 Results of operations for the Group

11.4.1 Three months ended 30 September 2016 compared to three months ended 30 September 2015

The table below is extracted from the Interim Financial Statements for the three and nine months ended 30

September 2016 and 2015.


30 September

2016

(unaudited)

2015

(unaudited)

Operating revenue ........................................................................................... 25,720 109,943

Voyage expenses ................................................................................................ (12,780) (15,499)

Operating expenses ............................................................................................ (9,480) (7,727)

Administrative and general expenses .................................................................... (1,710) (1,409)

Operating profit before depreciation expense .................................................. 1,750 85,308

Depreciation and amortisation expense ................................................................. (10,510) (8,833)

Impairment charge on goodwill ............................................................................ (1,886) -

Impairment charge on vessels .............................................................................. (45,298) -

Operating profit (loss) ..................................................................................... (55,944) 76,475

Non-operating income (expenses):

Finance expense ................................................................................................. (4,787) (3,587)

Finance income .................................................................................................. 1 31

Foreign currency exchange gain (loss) ................................................................... (9) (88)

Profit (loss) before income tax ........................................................................ (60,739) 72,831

Income tax expense ............................................................................................ - -

Net profit (loss) ............................................................................................... (60,739) 72,831

11.4.1.1 Operating revenue

Operating revenue for the three months ended 30 September 2016 was USD 25,720 thousand compared to USD

109,943 thousand for the three months ended 30 September 2015, a decrease of USD 84,223 thousand, or 76.6%.

The decrease was primarily attributable to lower freight rates offset by larger fleet. The sailed in rate in the three

months ended 30 September 2015 was USD 96,865/day compared to USD 10,131/day in the three months ended 30

September 2016.

11.4.1.2 Voyage expenses

Voyage expenses for the three months ended 30 September 2016 were USD 12,780 thousand compared to USD

15,499 thousand for the three months ended 30 September 2015, a decrease of USD 2,719 thousand, or 17.5%. The

decrease was primarily attributable to decreased commissions due to significantly lower rates. Commissions are

calculated based on freight rates, and in the third quarter of 2015, sailed in rate was USD 96,865/day compared to

USD 10,131/day in the third quarter of 2016.

11.4.1.3 Operating expenses

Operating expenses for the three months ended 30 September 2016 were USD 9,480 thousand compared to USD

7,727 thousand for the three months ended 30 September 2015, an increase of USD 1,753 thousand, or 22.7%. The

increase was primarily attributable to increased fleet of 14 ships in 2016 compared to approximately nine ships in the

three months ended 30 September 2015.


54

11.4.1.4 Administrative and general expenses

Administrative and general expenses for the three months ended 30 September 2016 were USD 1,710 thousand

compared to USD 1,409 thousand for the three months ended 30 September 2015, an increase of USD 301 thousand,

or 21.4%. The increase was primarily attributable to increased personnel costs as a result of bonus payment for 2014

paid in 2015.

11.4.1.5 Operating profit before depreciation expense

Operating profit before depreciation expense for the three months ended 30 September 2016 was USD 1,750

thousand compared to USD 85,308 thousand for the three months ended 30 September 2015, a decrease of USD

83,558 thousand, or 97.9%. The decrease was primarily attributable to lower freight rates offset by larger fleet.

11.4.1.6 Depreciation and amortisation expense

Depreciation and amortisation expense for the three months ended 30 September 2016 was USD 10,510 thousand

compared to USD 8,833 thousand for the three months ended 30 September 2015, an increase of USD 1,677

thousand, or 19.0%. The increase was primarily attributable to increased fleet after deliveries of three VLGCs in the

third quarter of 2015.

11.4.1.7 Impairment charge on goodwill

Impairment charge of goodwill for the three months ended 30 September 2016 was USD 1,886 thousand compared to

nil for the three months ended 30 September 2015. The increase was attributable to an impairment of the Group's

VLGC fleet, and an impairment of the goodwill in the third quarter of 2016.

11.4.1.8 Impairment charge on vessels

Impairment charge on vessels for the three months ended 30 September 2016 was USD 45,298 thousand compared

to nil for the three months ended 30 September 2015. The increase was attributable to an impairment of the Group's

VLGC fleet in the third quarter of 2016. For further information regarding the impairment, see Section 11.9

"Impairment".

11.4.1.9 Operating profit

Operating loss for the three months ended 30 September 2016 was USD 55,944 thousand compared to operating

profit of USD 76,475 thousand for the three months ended 30 September 2015, a decrease of USD 132,419 thousand.

The decrease was primarily attributable to lower freight rates, an impairment charge on vessels of USD 45,298

thousand and an impairment charge on goodwill of USD 1,866 thousand, partially offset by a larger fleet.

11.4.1.10 Finance expense

Finance expense for the three months ended 30 September 2016 was USD 4,787 thousand compared to USD 3,587

thousand for the three months ended 30 September 2015, an increase of USD 1,200 thousand, or 33.5%. The

increase was primarily attributable to increased debt due to increased fleet. Debt increased by USD 150 million in the

third quarter of 2015 in connection with deliveries of three VLGCs.

11.4.1.11 Finance income

Finance income for the three months ended 30 September 2016 was USD 1 thousand compared to USD 31 thousand

for the three months ended 30 September 2015, a decrease of USD 30 thousand. The decrease was primarily

attributable to lower cash position and hence lower interest income.

11.4.1.12 Foreign currency exchange loss

Foreign currency exchange loss for the three months ended 30 September 2016 were USD 9 thousand compared to

USD 88 thousand for the three months ended 30 September 2015, a decrease in the loss of USD 79 thousand.

11.4.1.13 Profit (loss) before income tax

For the reasons described above, loss before income tax for the three months ended 30 September 2016 was USD

60,739 thousand compared to profit before income tax of USD 72,831 thousand for the three months ended 30

September 2015, a decrease of USD 133,570 thousand.

11.4.1.14 Net profit (loss)

For the reasons described above, net loss for the three months ended 30 September 2016 was USD 60,739 thousand


55

compared to net profit of USD 72,831 thousand for the three months ended 30 September 2015, a decrease of USD

133,570 thousand.

11.4.2 Nine months ended 30 September 2016 compared to nine months ended 30 September 2015

The table below is extracted from the Interim Financial Statements for the nine months ended 30 September 2016 and

2015.


30 September

2016

(unaudited)

2015

(unaudited)


Voyage expenses ................................................................................................ (35,511) (33,188)





Impairment charge on goodwill ............................................................................ (1,886) -

Impairment charge on vessels .............................................................................. (51,426) -

Operating profit (loss) ..................................................................................... (39,547) 146,527


Finance expense ................................................................................................. (14,548) (8,612)

Finance income .................................................................................................. 3 141

Foreign currency exchange loss ............................................................................ (48) (27)

Profit (loss) before income tax ........................................................................ (54,140) 138,029

Income tax expense ............................................................................................ - (7)

Net profit (loss) ............................................................................................... (54,140) 138,022


Operating revenue for the nine months ended 30 September 2016 was USD 116,119 thousand compared to USD

226,751 thousand for the nine months ended 30 September 2015, a decrease of USD 110,632 thousand, or 48.8%.

The decrease was primarily attributable to lower freight rates partially offset by a larger fleet. The sailed in rate in the

nine months ended 30 September 2015 was USD 85,169/day compared to USD 21,226/day in the nine months period

ended 30 September 2016.


Voyage expenses for the nine months ended 30 September 2016 were USD 35,511 thousand compared to USD 33,188

thousand for the nine months ended 30 September 2015, an increase of USD 2,323 thousand, or 7.0%. The increase

was primarily attributable to increased fleet of 14 ships compared to an average of nine ships for the nine months

ended 30 September 2015 offset by lower commissions due to lower freight rates in 2016.


Operating expenses for the nine months ended 30 September 2016 were USD 29,886 thousand compared to USD

19,560 thousand for the nine months ended 30 September 2015, an increase of USD 10,326 thousand, or 52.8%. The

increase was primarily attributable to increased fleet of 14 ships compared to an average of nine ships for the nine

months ended 30 September 2015.


Administrative and general expenses for the nine months ended 30 September 2016 were USD 5,390 thousand

compared to USD 5,725 thousand for the nine months ended 30 September 2015, a decrease of USD 335 thousand, or

5.9%. The decrease was primarily attributable to a one-off expense of approximately USD 500 thousand related to

employee expenses in 2015. The one-off expense was related to profit sharing for the employees.


Operating profit before depreciation expense for the nine months ended 30 September 2016 was USD 45,332

thousand compared to USD 168,278 thousand for the nine months ended 30 September 2015, a decrease of USD

122,946 thousand, or 73.1%. The decrease was primarily attributable to lower freight rates offset by larger fleet.


56


Depreciation and amortisation expense for the nine months ended 30 September 2016 was USD 31,567 thousand

compared to USD 21,751 thousand for the nine months ended 30 September 2015, an increase of USD 9,816

thousand, or 45.1%. The increase was primarily attributable to increased fleet of 14 ships compared to an average of

nine ships for the nine months ended 30 September 2015.

11.4.2.7 Impairment charge on goodwill

Impairment charge on goodwill for the nine months ended 30 September 2016 was USD 1,886 thousand compared to

nil for the nine months ended 30 September 2015. The increase was attributable to an impairment of the Group's

VLGC fleet, and an impairment of the goodwill in the third quarter of 2016.

11.4.2.8 Impairment charge on vessels

Impairment charge on vessels for the nine months ended 30 September 2016 was USD 51,426 thousand compared to

nil for the nine months ended 30 September 2015. The increase was attributable to an impairment charge on the

vessel Gaea in the second quarter of 2016 and an impairment charge on the VLGC fleet in the third quarter of 2016.

For further information regarding the impairment, see Section 11.9 "Impairment".

11.4.2.9 Operating profit (loss)

Operating loss for the nine months ended 30 September 2016 was USD 39,547 thousand compared to an operating

profit of USD 146,527 thousand for the nine months ended 30 September 2015, a decrease of USD 186,074 thousand.

The decrease was primarily attributable to lower freight rates, an impairment charge on vessels of USD 51,426

thousand and an impairment charge on goodwill of USD 1,866 thousand, partially offset by larger fleet.


Finance expense for the nine months ended 30 September 2016 was USD 14,548 thousand compared to USD 8,612

thousand for the nine months ended 30 September 2015, an increase of USD 5,936 thousand, or 68.9%. The increase

was primarily attributable to increased debt due to increased fleet.


Finance income for the nine months ended 30 September 2016 was USD 3 thousand compared to USD 141 thousand

for the nine months ended 30 September 2015, a decrease of USD 138 thousand. The decrease was primarily


11.4.2.12 Foreign currency exchange loss

Foreign currency exchange loss for the nine months ended 30 September 2016 was USD 48 thousand compared to

USD 27 thousand for the nine months ended 30 September 2015, an increase of USD 21 thousand.

11.4.2.13 Profit (loss) before income tax

For the reasons described above, loss before income tax for the nine months ended 30 September 2016 was USD

54,140 thousand compared to profit before income tax of USD 138,029 thousand for the nine months ended 30

September 2015, a decrease of USD 192,169 thousand.

11.4.2.14 Income tax expense

Income tax expense for the nine months ended 30 September 2016 was nil compared to USD 7 thousand for the nine

months period ended 30 September 2015, a decrease of USD 7 thousand.

11.4.2.15 Net profit (loss)

For the reasons described above, net loss for the nine months ended 30 September 2016 was USD 54,140 thousand

compared to net profit of USD 138,022 thousand for the nine months ended 30 September 2015, a decrease of USD

192,162 thousand.

11.4.3 Year ended 31 December 2015 compared to thirteen months ended 31 December 2014

The table below is extracted from the Financial Statements for the year ended 31 December 2015 and the thirteen

month period ended 31 December 2014.


57

In USD thousand

Twelve months

ended

31 December

Thirteen months

ended 31

December1

2015

(audited)

2014

(audited)


Voyage expenses ................................................................................................ (46,218) (41,837)





Operating profit ............................................................................................... 196,190 88,192


Finance expense ................................................................................................. (12,932) (4,693)

Finance income .................................................................................................. 131 302

Loss on early extinguishment of debt .................................................................... - (1,915)

Foreign currency exchange gain (loss) ................................................................... (220) 91

Profit before income tax .................................................................................. 183,169 81,977

Income tax expense ............................................................................................ (8) (210)

Net profit ......................................................................................................... 183,161 81,767

1 The Financial Statements for 2014 covers a thirteen month period starting on 1 December 2013 and ending on 31 December 2014. Thus, the

Financial Statements for the year ended 31 December 2015 and the thirteen month period ended 31 December 2014 are not directly comparable.


Operating revenue for the year ended 31 December 2015 was USD 310,873 thousand compared to USD 180,406

thousand for the thirteen month period ended 31 December 2014, an increase of USD 130,467 thousand, or 72.3%.

The increase was primarily due to delivery of 8 VLGCs in 2015 combined with higher sailed in rates per day.


Voyage expenses for the year ended 31 December 2015 were USD 46,218 thousand compared to USD 41,837

thousand for the thirteen month period ended 31 December 2014, an increase of USD 4,381 thousand, or 10.5%. The

increase was primarily due to larger fleet offset by lower bunker prices.


Operating expenses for the year ended 31 December 2015 were USD 29,139 thousand compared to USD 21,597

thousand for the thirteen month period 31 December 2014, an increase of USD 7,542 thousand, or 34.9%. The

increase was primarily due to larger fleet after delivery of 8 VLGCs during 2015.


Administrative and general expenses for the year ended 31 December 2015 were USD 7,843 thousand, remaining

stable as compared to USD 7,842 thousand for the thirteen month period ended 31 December 2014, an increase of

USD 1 thousand.


Operating profit before depreciation expense for the year ended 31 December 2015 was USD 227,673 thousand

compared to USD 109,130 thousand for the thirteen month period ended 31 December 2014, an increase of USD

118,543 thousand, or 108.6%. The increase was primarily due to larger fleet and higher freight rates.


Depreciation and amortisation expense for the year ended 31 December 2015 was USD 31,483 thousand compared to

USD 20,938 thousand for the thirteen month period ended 31 December 2014, an increase of USD 10,545 thousand,

or 50.4%. The increase was primarily due to larger fleet after delivery of 8 VLGCs during 2015.


Operating profit for the year ended 31 December 2015 was USD 196,190 thousand compared to USD 88,192 thousand

for the thirteen month period ended 31 December 2014, an increase of USD 107,998 thousand, or 122.5%. The


58

increase was primarily due to larger fleet and higher freight rates.


Finance expense for the year ended 31 December 2015 was USD 12,932 thousand compared to USD 4,693 thousand

for the thirteen month period ended 31 December 2014, an increase of USD 8,239 thousand, or 175.6%. The increase

was primarily due to increased debt due to increased fleet.


Finance income for the year ended 31 December 2015 was USD 131 thousand compared to USD 302 thousand for the

thirteen month period ended 31 December 2014, a decrease of USD 171 thousand. The decrease was primarily


11.4.3.10 Loss on early extinguishment of debt

Loss on early extinguishment of debt for the year ended 31 December 2015 was nil compared to USD 1,915 thousand

for the thirteen month period ended 31 December 2014, a decrease of USD 1,915 thousand. The decrease was due to

loss on early extinguishment of debt in 2014 resulting from the refinancing of the long-term debt in that year.

11.4.3.11 Foreign currency exchange gain (loss)

Foreign currency exchange loss for the year ended 31 December 2015 was USD 220 thousand compared to USD 91

thousand gain for the thirteen month period ended 31 December 2014, a decrease of USD 311 thousand.

11.4.3.12 Profit before income tax

For the reasons described above, profit before income tax for the year ended 31 December 2015 was USD 183,169

thousand compared to USD 81,977 thousand for the thirteen month period ended 31 December 2014, an increase of

USD 101,192 thousand, or 123.4%.


Income tax expense for the year ended 31 December 2015 was USD 8 thousand compared to USD 210 thousand for

the thirteen month period ended 31 December 2014, a decrease of USD 202 thousand.

11.4.3.14 Net profit

For the reasons described above, net profit for the year ended 31 December 2015 was USD 183,161 thousand

compared to USD 81,767 thousand for the thirteen month period ended 31 December 2014, an increase of USD

101,394 thousand, or 124.0%.

11.4.4 Thirteen months ended 31 December 2014 compared to financial year ended 30 November 2013

The table below is extracted from the Financial Statements for the thirteen month period ended 31 December 2014

and the twelve month period ended 30 November 2013.

In USD thousand

Thirteen months

ended

31 December1

Twelve months

ended

30 November

2014

(audited)

2013

(audited)


Voyage expenses ................................................................................................ (41,837) (41,226)





Operating profit ............................................................................................... 88,192 23,173


Finance expense ................................................................................................. (4,693) (12,623)

Finance income .................................................................................................. 302 25

Loss on early extinguishment of debt .................................................................... (1,915) (1,205)

Other non-operating income ................................................................................ - 1,881

Foreign currency exchange gain ........................................................................... 91 251


59

In USD thousand

Thirteen months

ended

31 December1

Twelve months

ended

30 November

2014

(audited)

2013

(audited)

Profit before income tax .................................................................................. 81,977 11,502

Income tax expense ............................................................................................ (210) -

Net profit ......................................................................................................... 81,767 11,502

1 The Financial Statements for 2014 covers a thirteen month period starting on 1 December 2013 and ending on 31 December 2014. Thus, the Financial

Statements for the thirteen month period ended 31 December 2014 and for the financial year ended 30 November 2013 are not directly comparable.


Operating revenue for the thirteen month period ended 31 December 2014 was USD 180,406 thousand compared to

USD 115,000 thousand for the financial year ended 30 November 2013, an increase of USD 65,406 thousand, or

56.9%. The increase was primarily attributable to higher rates and the fact that 2014 had a fiscal year of 13 months.


Voyage expenses for the thirteen month period ended 31 December 2014 were USD 41,837 thousand, remaining

stable as compared to USD 41,226 thousand for the financial year ended 30 November 2013, an increase of USD 611

thousand, or 1.5%.


Operating expenses for the thirteen month period ended 31 December 2014 were USD 21,597 thousand, remaining

stable as compared to USD 22,809 thousand for the financial year ended 30 November 2013, a decrease of USD 1,212

thousand, or 5.3%.


Administrative and general expenses for the thirteen month period ended 31 December 2014 were USD 7,842

thousand compared to USD 4,125 thousand for the financial year ended 30 November 2013, an increase of USD 3,717

thousand, or 90.1%. The increase was primarily due to the fact that 2014 had a fiscal year of 13 months, professional

fees for the listing on the Oslo Stock Exchange and an increase in the number of employees.


Operating profit before depreciation expense for the thirteen month period ended 31 December 2014 was USD

109,130 thousand compared to USD 46,840 thousand for the financial year ended 30 November 2013, an increase of

USD 62,290 thousand, or 133.0%. The increase was primarily due to higher freight rates and the fact that 2014 had a

fiscal year of 13 months.


Depreciation and amortisation expense for the thirteen month period ended 31 December 2014 was USD 20,938

thousand compared to USD 23,667 thousand for the financial year ended 30 November 2013, a decrease of USD

2,729 thousand, or 11.5%. The decrease was primarily due to the fact that the fleet consisted of an average of 6 ships

in 2014, while the average was 7.4 ships in 2013.


Operating profit for the thirteen month period ended 31 December 2014 was USD 88,192 thousand compared to USD

23,173 thousand for the financial year ended 30 November 2013, an increase of USD 65,019 thousand, or 280.6%.

The increase was primarily due to higher freight rates and the fact that 2014 had a fiscal year of 13 months.


Finance expense for the thirteen month period ended 31 December 2014 was USD 4,693 thousand compared to USD

12,623 thousand for the financial year ended 30 November 2013, a decrease of USD 7,930 thousand, or 62.8%. The

decrease was primarily due to refinancing of the Group's debt on more attractive terms, combined with capitalised

interest on the newbuilding deposit that reduced the finance expense.


60


Finance income for the thirteen month period ended 31 December 2014 was USD 302 thousand, compared to USD 25

thousand for the financial year ended 30 November 2013, an increase of USD 277 thousand. The increase was

primarily attributable to higher cash position during the year as part of the listing of the Shares on the Oslo Stock

Exchange and the refinancing of the Group's debt, partially offset by lower interest rate.

11.4.4.10 Loss on early extinguishment of debt

Loss on early extinguishment of debt for the thirteen month period ended 31 December 2014 was USD 1,915 thousand

compared to USD 1,205 thousand for the financial year ended 30 November 2013, an increase of USD 710 thousand,

or 58.9%. The increase was primarily due to refinancing of the credit facilities in 2014.

11.4.4.11 Other non-operating income

Other non-operating income for the thirteen month period ended 31 December 2014 was nil compared to USD 1,881

thousand for the financial year ended 30 November 2013, a decrease of USD 1,881 thousand. The decrease was due

to exercise of a put option related to Transpetrol's withdrawal in 2013.

11.4.4.12 Foreign currency exchange gain

Foreign currency exchange gain for the thirteen month period ended 31 December 2014 was USD 91 thousand

compared to USD 251 thousand for the financial year ended 30 November 2013, a decrease of USD 160 thousand.

11.4.4.13 Profit before income tax

For the reasons described above, profit before income tax for the thirteen month period ended 31 December 2014 was

USD 81,977 thousand compared to USD 11,502 thousand for the financial year ended 30 November 2013, an increase

in the profit of USD 70,475 thousand, or 612.7%.


Income tax expense for the thirteen month period ended 31 December 2014 was USD 210 thousand compared to nil

for the financial year ended 30 November 2013, an increase of USD 210 thousand.

11.4.4.15 Net profit

For the reasons described above, net profit for the thirteen month period ended 31 December 2014 was USD 81,767

thousand compared to USD 11,502 for the financial year ended 30 November 2013, an increase of USD 70,265

thousand or 610.9%.

11.5 Financial condition

The table below sets out selected data from the Company's unaudited consolidated interim statement of financial

position as at 30 September 2016 and from the Company's audited consolidated statement of financial position as at

31 December 2015 and 2014 and as at 30 November 2013.

In USD thousand

As at

30

September

As at

31 December

As at 30

November

2016

(unaudited)

2015

(audited)

2014

(audited)

2013

(audited)

ASSETS

Current assets:

Cash and cash equivalents ...................................................................................... 87,783 70,033 162,279 199,883

Restricted cash ...................................................................................................... - - - 10,798

Receivables ........................................................................................................... 18,012 71,238 21,509 6,654

Related party receivables balances........................................................................... 4 27 445 450

Inventory ............................................................................................................. 4,412 4,895 3,546 4,605

Prepaid expenses ................................................................................................... 2,292 2,635 974 691

Other current assets .............................................................................................. 1,969 1,962 1,275 1,119

Asset held for sale ................................................................................................. 13,369 - - -

Total current assets ............................................................................................ 127,841 150,790 190,028 224,200

Property, plant and equipment ................................................................................ 870,156 965,742 365,669 378,711

Newbuilding deposit ............................................................................................... - - 139,200 -


61

In USD thousand

As at

30

September

As at

31 December

As at 30

November

2016

(unaudited)

2015

(audited)

2014

(audited)

2013

(audited)

Goodwill and intangible assets ................................................................................. 291 2,262 2,374 1,886

Total non-current assets ..................................................................................... 870,447 968,004 507,243 380,597

Total assets ........................................................................................................ 998,288 1,118,794 697,271 604,797

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt ............................................................................ 42,931 42,931 18,055 69,218

Revolving credit facility........................................................................................... - 50,000 - -

Accounts payable ................................................................................................... 1,942 1,003 327 1,952

Current portion of derivative financial instruments ..................................................... 1,360 - - -

Related party payable balances ............................................................................... 19 58 495 399

Accrued voyage expenses ....................................................................................... 4,135 6,723 453 2,095

Accrued expenses .................................................................................................. 605 886 3,356 3,787

Other current liabilities ........................................................................................... 1,117 1,243 691 1,237

Total current liabilities ........................................................................................ 52,109 102,844 23,377 78,688

Long-term debt ..................................................................................................... 376,446 508,432 165,391 133,744

Long-term revolving credit facilities ......................................................................... 150,000 - - -

Derivative financial instruments ............................................................................... 23,163 7,573 - -

Total non-current liabilities ................................................................................ 549,609 516,005 165,391 133,744


Share capital ......................................................................................................... 35,278 35,278 35,278 30,384

Paid-in capital ....................................................................................................... 350,359 350,359 350,359 260,408

Contributed capital................................................................................................. 94,797 94,531 94,673 94,373

Retained earnings (deficit) ...................................................................................... (47,549) 39,277 28,392 7,303

Treasury shares ..................................................................................................... (11,867) (11,867) - -

Accumulated other comprehensive loss .................................................................... (24,448) (7,633) (199) (103)

Total shareholders' equity .................................................................................. 396,570 499,945 508,503 392,365

Total liabilities and shareholders' equity ............................................................ 998,288 1,118,794 697,271 604,797

11.5.1 Financial position as at 30 September 2016 compared to 31 December 2015

Avance Gas' total assets amounted to USD 998,288 thousand as at 30 September 2016, compared to USD 1,118,794

thousand as at 31 December 2015. The decrease in total assets for the period was mainly due to depreciation of the

fleet, the impairment of the VLGC fleet, the LNG carrier Gaea and goodwill and dividend payments. For a description of

the impairment, see Section 11.9 "Impairment". Total shareholders' equity amounted to USD 396,570 thousand as at

30 September 2016, corresponding to an equity ratio of 40% compared to 45% as at 31 December 2015.

Total receivables decreased to USD 18,012 thousand in the third quarter of 2016, from USD 71,238 thousand as of 31

December 2015, reflecting lower freight rates and the receipt of demurrage receivables. Outstanding demurrage

receivables were USD 5,902 thousand as at 30 September 2016, compared to USD 35,252 thousand as at 31

December 2015. Out of the total receivables of USD 18,012 thousand as at 30 September 2016, USD 5,983 thousand

were past due and can be broken down as follows:

Up to 30 days past due: USD 226 thousand

31 to 60 days past due: USD 256 thousand

61 to 90 days past due: USD 916 thousand

Greater than 91 days past due: USD 4,585 thousand

Receivables that were not past due as at 30 September 2016 amounted to USD 12,029 thousand. Receivables greater

than 60 days overdue mainly reflect demurrage receivables.


62

Total liabilities were USD 601,718 thousand as at 30 September 2016 compared to USD 618,849 thousand as at 31

December 2015, mainly reflecting the increase in derivative financial instruments of USD 16,950 thousand offset by

debt repayments of USD 33,036. The USD 13,369 in asset held for sale as at 30 September 2016 relate to the sale of

the LNG carrier Gaea, with expected delivery and payment in December 2016.

11.5.2 Financial position as at 31 December 2015 compared to 31 December 2014

Avance Gas' total assets amounted to USD 1,118,794 thousand as at 31 December 2015, compared to USD 697,271

thousand as at 31 December 2014. The increase in total assets for the period was mainly due to delivery of

newbuildings, resulting in an increased VLGC fleet, and a strong market resulting in increased receivables. Total

shareholders' equity amounted to USD 499,945 thousand as at 31 December 2015, corresponding to an equity ratio of

45% compared to 73% as at 31 December 2014.

Total receivables increased to USD 71,238 thousand in the year ended 31 December 2015, from USD 21,509 thousand

as at 31 December 2014, reflecting the increase in the fleet by eight ships combined with a strong market and higher

freight rates. Outstanding demurrage receivables were USD 35,252 thousand as at 31 December 2015, compared to

USD 12,104 thousand as at 31 December 2014.

Total liabilities were USD 618,849 thousand as at 31 December 2015 compared to USD 188,768 thousand as at 31

December 2014, reflecting drawdown of USD 400,000 thousand in new debt relating to delivery of eight VLGCs,

increased derivative financial instruments and increased accrued voyage expenses as a result of increased fleet, offset

by regular debt repayments during the year.

11.5.3 Financial position as at 31 December 2014 compared to 30 November 2013

Avance Gas' total assets amounted to USD 697,271 thousand as at 31 December 2014, compared to USD 604,797

thousand as at 30 November 2013. The increase in total assets for the period was mainly due to the newbuilding

deposits. Total shareholders' equity amounted to USD 508,503 thousand as at 31 December 2014, corresponding to

an equity ratio of 73% compared to 65% as at 30 November 2013.

Total receivables increased to USD 21,509 thousand in the year ended 31 December 2014, from USD 6,654 thousand

as at 31 November 2013, reflecting the stronger market and higher freight rates.

Total liabilities were USD 188,768 thousand as at 31 December 2014 compared to USD 212,432 thousand as at 30

November 2013, reflecting reduced debt in 2014 due to refinancing in 2014.

11.5.4 Measures of financial condition

The Group primarily measures its financial condition by its liquidity and by being in compliance with its financial

covenants. Other metrics related to the financial condition can be seen in the table below.

Three months ended

30 September

Twelve

months

ended 31

December

Thirteen

months

ended 31

December

Twelve

months

ended 30

November

2016

(unaudited)

2015

(unaudited)

2015

(unaudited)

2014

(unaudited)

2013

(unaudited)

Interest coverage ratio ................................................................. 0.4 23.8 17.6 23.3 3.7

Equity ratio ................................................................................. 40% 50% 45% 73% 65%

The interest coverage ratio, defined as operating profit before depreciation expense and impairment divided by the

interest expense for the relevant period, has decreased in 2016, primarily due to reduced spot freight rates, that have

reduced the operating profit before depreciation expense and impairment.

The equity ratio, defined as total shareholders' equity divided by total assets for the relevant period, has decreased in

2016 primarily due to net losses and the impairment described in Section 11.9 "Impairment".

11.6 Liquidity and capital resources

11.6.1 Sources and use of cash

The Group's principal sources of liquidity are cash flows from operations and financing activities. Financing for the

Group has historically been provided through issuance of long-term debt and common shares and through shareholder


63

loans. In 2013, the Group also received cash from the sale of two ships.

As of 30 September 2016, the Group had USD 87,783 thousand in cash. The Group primarily uses cash for voyage

expenses, for the repayment of borrowings and payment of dividends to its shareholders. The Group primarily holds its

cash in USD.

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in

order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital

structure to reduce the cost of capital. The Group's activities expose it to a variety of financial risks such as market

risk (including currency risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group's

overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise

potential adverse effects on the Group's financial performance.

Risk management is carried out by the Company under policies approved by the Board of Directors. The management

identifies, evaluates and hedges financial risks in close co-operation with the Board of Directors. The Company has

hedged USD 300,000 thousand of the floating interest rate exposure through interest rate swap agreements

commencing in Q2 2017 and maturing in 2025. The Board of Directors provides written principles for overall risk

management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit

risk, and investment of excess liquidity.

Other than the covenants set forth in Section 11.8.1 "Credit facilities", there are no restrictions on the use of capital

resources that have materially affected, or could materially affect, directly or indirectly, the Group's operations.

11.6.2 Cash received from subsidiaries

The Company does not believe that there are significant obstacles or barriers to transfer funds to it from its

subsidiaries that may affect its ability to meet or fulfil its financial or other obligations.

11.6.3 Cash flows

The table below summarises the Group's historical cash flows, and is extracted from the Financial Information, for

each of the financial periods presented.


30 September

Twelve

months

ended 31

December

Thirteen

months

ended 31

December

Twelve

months

ended 30

November

2016

(unaudited)

2015

(unaudited)

2015

(audited)

2014

(audited)

2013

(audited)

Net cash from operating activities .................................................. 84,521 116,192 167,167 86,706 35,700

Net cash from (used in) investing activities ..................................... (1,036) (433,850) (491,520) (143,970) 126,756

Net cash from (used in) financing activities ..................................... (65,722) 218,738 232,333 19,676 7,237

Cash and cash equivalents at beginning of period ............................ 70,033 162,279 162,279 199,883 30,232

Cash and cash equivalents at end of period ..................................... 87,783 63,347 70,033 162,279 199,883

11.6.3.1 Cash flows from operating activities

Nine months ended 30 September 2016 compared to nine months ended 30 September 2015

Net cash inflow from operating activities for the nine months ended 30 September 2016 was USD 84,521 thousand

compared to USD 116,192 thousand for the nine months ended 30 September 2015, a decrease of USD 31,671

thousand, or 27.3%. The decrease was primarily attributable to the larger fleet offset by lower freight rates.

Year ended 31 December 2015 compared to thirteen months ended 31 December 2014

Net cash inflow from operating activities for the year ended 31 December 2015 was USD 167,167 thousand compared

to USD 86,706 thousand for the thirteen month period ended 31 December 2014, an increase of USD 80,461

thousand, or 92.8%. The increase was primarily attributable to larger fleet in 2015 and higher average freight rates.

Thirteen months ended 31 December 2014 compared to financial year ended 30 November 2013

Net cash inflow from operating activities for the thirteen month period ended 31 December 2014 was USD 86,706

thousand compared to USD 35,700 thousand for the financial year ended 30 November 2013, an increase of USD

51,006 thousand, or 142.9%. The increase was primarily attributable to the fact that 2014 had a fiscal year of 13


64

months, higher freight rates and lower bunker prices.

11.6.3.2 Cash flows (used in) from investing activities


Net cash outflow from investing activities for the nine months ended 30 September 2016 was USD 1,036 thousand

compared to USD 433,850 thousand for the nine months ended 30 September 2015, a decrease of USD 432,814

thousand. The decrease was primarily attributable to deliveries of seven VLGCs in the first nine months of 2015

compared to no ships being delivered in the first nine months of 2016.


Net cash outflow from investing activities for the year ended 31 December 2015 was USD 491,520 thousand compared


thousand, or 241.4%. The increase was primarily attributable to deliveries of eight VLGCs in 2015 for USD 491,646

thousand compared to newbuilding deposits paid in 2014 of USD 139,300 thousand.


Net cash outflow from investing activities for the thirteen month period ended 31 December 2014 was USD 143,970

thousand compared to net cash inflow of USD 126,756 thousand for the financial year ended 30 November 2013, a

decrease of USD 270,726 thousand. The decrease was primarily attributable to payment of newbuilding deposits in

2014 of USD 139,300 thousand and cash received from the sale of assets in 2013 of USD 132,880 thousand.

11.6.3.3 Cash flows (used in) from financing activities


Net cash outflow from financing activities for the nine months ended 30 September 2016 was USD 65,722 thousand

compared to a net cash inflow of USD 218,738 thousand for the nine months ended 30 September 2015, a decrease of

USD 284,460 thousand. The decrease was primarily attributable to drawdown of debt of USD 350 million in the first

nine months of 2015 in relation to the delivery of the VLGCs which was partially offset by higher dividends paid in

2015.


Net cash inflow from financing activities for the year ended 31 December 2015 was USD 232,333 thousand compared


thousand, or 1,080.8%. The increase was primarily attributable to drawdown of debt, net of repayments, of USD

416,890 thousand in 2015 compared to debt repayments, net of refinancing of debt of USD 14,491 thousand in 2014.

Partially offsetting this were higher dividends in 2015.


Net cash inflow from financing activities for the thirteen month period ended 31 December 2014 was USD 19,676

thousand compared to USD 7,237 thousand for the financial year ended 30 November 2013, an increase of USD

12,439 thousand, or 171.9%. The slight increase was primarily attributable to the issuance of shares in 2014, net of

dividends, exceeding the debt and equity transactions in 2013.

11.7 Investments

11.7.1 Principal historical investments

The table below shows the Group's principal historical capital expenditures and investments for the nine months ended

30 September 2016, the twelve month period ended 31 December 2015, the thirteen month period ended 31

December 2014 and the twelve month period ended 30 November 2013.

Nine months

ended

30 September

Twelve months

ended 31

December

Thirteen months

ended 31

December

Twelve months

ended 30

November

In USD thousand 2016

(unaudited)

2015

(unaudited)

2014

(unaudited)

2013

(unaudited)

Newbuildings ................................................................................................... - 491,2951 139,2001 -

Ship improvements .......................................................................................... 1,0362 3513 7,8014 -

Furniture and fixtures ....................................................................................... - 412 - -

Dry-docking assets .......................................................................................... - 64 6 6,099


65

Nine months

ended

30 September

Twelve months

ended 31

December

Thirteen months

ended 31

December

Twelve months

ended 30

November

Total ................................................................................................................ 1,036 492,122 147,007 6,099

1 Cash payments were made for newbuilding deposit for the eight VLGCs Mistral, Monsoon, Breeze, Passat, Sirocco, Levant,

Chinook and Pampero of USD 139,200 thousands in 2014, which represents USD 17,400 thousands per ship. The newbuilding

cost upon delivery was USD 61,412 per VLGC giving a total average cost for each newbuilding of USD 78,812 thousands,

including capitalised interest.

2 Cash payments were made for ship improvements on all of the Group's VLGCs in 2016.

3 Cash payments were made on ship improvements on the VLGCs Avance, Venus Glory, Thetis Glory, Iris Glory, Promise and

Providence.

4 Cash payments were made for ship improvements on the VLGCs Avance, Iris Glory, Thetis Glory, Venus Glory, Providence and

Promise.

There has been no principal capital expenditures or investments since the date of the Interim Financial Statements as

of, and for the three and nine month periods, ended 30 September 2016.

11.7.2 Principal investments in progress and planned principal investments

The table below sets forth information on the Group's capital expenditure committed for the period from 30 September

2016 to 31 December 2016 and the capital expenditure commitments for the other periods indicated:

In USD thousand

2016 2017 2018 2019 2020

Total

Dry-docking for maintenance and

upgrades .............................................................................................................. - - 7,500 1,500 8,000 17,000

Total ................................................................................................................... - - 7,500 1,500 8,000 17,500

Management believes that available cash, cash from operations and the net proceeds from the Private Placement will

be adequate to finance the committed capital expenditure described above, after taking into account the Amendment

Agreements. The assumption is based on Management's estimated operational performance, charter rates and

utilisation of the Group's vessels going forward.

Other than as described above, the Group has no significant committed future investments as of the date of this

Prospectus.

11.8 Borrowings and other contractual obligations

11.8.1 Credit facilities

The following table sets forth the Group's committed credit facilities as per 30 September 2016.

In USD million

Facility

Total

facility

Utilised

facility

Unutilised

facility

Interest

rate

Maturity

date

USD 450 million credit facility ......................... 450.0 450.0 - LIBOR + 2.50%1 March 2020

USD 200 million credit facility .......................... 200.0 200.0 - LIBOR + 2.00%1 May 2021

Total ................................................................ 650.0 650.0 -

1 Pursuant to the Amendment Agreements, the interest margin on both facilities will be increased by 25 bps (0.25 percentage points) until the Company

is back on its original maturity schedule and for as long as any covenant waiver is outstanding. See Section 11.8.2 "The Bank Debt Amendments".

At the date of this Prospectus there are no unutilised revolving credit facilities.

The following section summarises the material terms of the Group's credit facilities as of 30 September 2016.

USD 450 million credit facility

The maturity profile and estimated interest costs for the credit facility for each financial period from 30 September

2016 until maturity are as follows:

In USD million Q4 2016 2017 2018 2019 2020

Repayment ........................................................................................................... 7.9 31.5 31.5 31.5 285.1


66

In USD million Q4 2016 2017 2018 2019 2020

Estimated interest ................................................................................................. 3.2 14.0 14.4 15.6 3.6

Note Based on the current LIBOR forward curve, on a floating rate basis. Approximately 50% has fixed interest rate of approximately 2.74%

commencing in second quarter 2017.

For a description of the effects of the Bank Debt Amendments, see Section 11.8.2 "The Bank Debt Amendments".

The facility is repaid in quarterly instalments. Avance Gas repays approximately USD 7.9 million of the facility each

quarter in addition to the interest accrued for the period.

The credit facility is secured by ten VLGCs. The credit facility contains certain ship covenants. The key ship covenants

are as follows:

Minimum value to outstanding loan under the facility of 130% at all times; and

A change of control provision which will be triggered if a party other than Frontline 2012, Hemen Holding

Ltd, Stolt-Nielsen Gas or Sungas, gains control, directly or indirectly, of 1/3 or more of the voting and/or

Shares of Avance Gas.

Further, Avance Gas is required to comply with a number of financial covenants. The financial covenants are as

follows:

Minimum free liquidity: Cash and cash equivalents shall at all times be at least the higher of (i) USD 35

million and (ii) 5.0% of the consolidated gross interest bearing debt of the Avance Gas Group;

Working capital: Working capital shall at all times be positive;

Equity: The book equity shall at all times be equal to or higher than USD 250 million; and

Equity ratio: The ratio of book equity to book value of total assets shall at all times be minimum 30%.

The credit facility includes cross default provisions.

As of 30 September 2016, the Group was in compliance with all covenants in the facility. The covenants and the

repayment profile under the USD 450 million credit facility has been amended as a result of the Bank Debt

Amendments, see Section 11.8.2 "The Bank Debt Amendments".

The USD 450 million credit facility is secured by the following VLGCs:

Name Type Year built Shipyard

Capacity

(cbm) Flag

Ownership

(%)

Classification

society

Avance VLGC 2003 KHI 82,557 Marshall Island 100% ABS

Iris Glory VLGC 2008 DSME 83,783 Marshall Island 100% DNV GL

Thetis Glory VLGC 2008 DSME 83,783 Marshall Island 100% DNV GL

Venus Glory VLGC 2008 DSME 83,765 Marshall Island 100% DNV GL

Providence VLGC 2008 DSME 84,597 Marshall Island 100% DNV GL

Promise VLGC 2009 DSME 84,597 Marshall Island 100% DNV GL

Mistral VLGC 2015 Jiangnan 83,000 Marshall Island 100% Lloyds

Monsoon VLGC 2015 Jiangnan 83,000 Marshall Island 100% Lloyds

Breeze VLGC 2015 Jiangnan 83,000 Marshall Island 100% Lloyds

Passat VLGC 2015 Jiangnan 83,000 Marshall Island 100% Lloyds

USD 200 million credit facility

The maturity profile and estimated interest costs for the credit facility for each financial period from 30 September

2016 until maturity are as follows:

In USD million Q4 2016 2017 2018 2019 2020 2021

Repayment ........................................................................................................... 3.1 12.5 12.5 12.5 12.5 133.6

Estimated interest ................................................................................................. 1.3 6.6 7.5 7.9 7.2 3.3



For a description of the effects of the Bank Debt Amendments, see Section 11.8.2 "The Bank Debt Amendments ".


67

The facility is repaid in quarterly instalments. Avance Gas repays approximately USD 3.1 million of the facility each

quarter in addition to the interest accrued for the period.

The credit facility is secured by four VLGCs. The credit facility contains certain ship covenants. The key ship covenants

are as follows:

• Minimum value to outstanding loan under the facility of 130% at all times; and

• A change of control which will be triggered if a party other than Frontline 2012, Hemen Holding Ltd, Stolt-

Nielsen Gas or Sungas, gains control, directly or indirectly, of 1/3 or more of the voting and/or Shares of

Avance Gas.

Further, Avance Gas is required to comply with a number of financial covenants. The financial covenants are as

follows:

• Minimum free liquidity: Cash and cash equivalents shall at all times be at least the higher of (i) USD 35

million and (ii) 5.0% of the consolidated gross interest bearing debt of the Avance Gas Group;

• Working capital: Working capital shall at all times be positive;

• Equity: The book equity shall at all times be equal to or higher than USD 250 million; and

• Equity ratio: The ratio of book equity to book value of total assets shall at all times be minimum 30%.

The credit facility includes cross default provisions.

As of 30 September 2016, the Group is in compliance with all covenants in the facility. The covenants and the

repayment profile under the USD 200 million credit facility has been amended as a result of the Bank Debt

Amendments, see Section 11.8.2 "The Bank Debt Amendments".

The USD 200 million credit facility is secured by the following VLGCs:

Name Type Year built Shipyard

Capacity

(cbm) Flag

Ownership

(%)

Classification

society

Sirocco VLGC 2015 Jiangnan 83,000 Marshall Island 100% Lloyds

Levant VLGC 2015 Jiangnan 83,000 Marshall Island 100% Lloyds

Chinook VLGC 2015 Jiangnan 83,000 Marshall Island 100% Lloyds

Pampero VLGC 2015 Jiangnan 83,000 Marshall Island 100% Lloyds

11.8.2 The Bank Debt Amendments

The Board of Directors and Management have during the past months been working on an overall plan to secure the

Group satisfactory liquidity going forward. On 19 October 2016, the Company reached an agreement with its lending

banks on such a plan which comprises the main elements described in Sections 11.8.2.1 "Amendments to bank debt"

(the "Bank Debt Amendments").

11.8.2.1 Amendments to bank debt

The Company's lending banks have agreed to a 50% deferral of amortisation on the credit facilities for a 2.5 year

period from 1 January 2017 (the "Deferral Period"), with aggregate deferred instalments of USD 55 million. The

reduction has been implemented through amendment agreements to the current loan agreements (the "Amendment

Agreements"), which also include the following amendments to the ship covenants and financial covenants of the

credit facilities:

Minimum value to outstanding loan: The minimum value to outstanding loan under the facilities shall from

the quarter ending 31 December 2016 until, but not including, the quarter ending 30 June 2019 be reduced

from 130% to 110%. There will thereafter be a gradual step-up towards 31 March 2020 when the original

covenant level of 130% will be reinstated;

Equity ratio: The ratio of book equity to book value of total assets shall throughout the Deferral Period be

reduced from 30% to 25%; and


68

Equity: The minimum book equity shall throughout the Deferral Period be reduced from USD 250 million to

USD 200 million.

From the third quarter of 2019 and until maturity of the credit facilities, there will be a cash sweep mechanism

whereby the Company will pay down on the deferred repayment should the cash position of the Company improve

above a cash floor of USD 50 million. Until the Company is back on its original maturity schedule (i.e. until the

Company has repaid the USD 55 million through the cash sweep mechanism), there will be restrictions on the

Company's ability to pay dividends, raise new debt financing and to make new investments without the consent of the

secured lender.

Until the Company is back on its original maturity schedule and for as long as any covenant waiver is outstanding, the

interest margin on both facilities will be increased by 25 bps (0.25 percentage points). The Company has the right to,

at any given time, prepay any deferred amounts and cancel the requested waivers and amendments.

The Amendment Agreements were conditional upon new cash equity to the Company of at least USD 55 million, which

was secured through the Private Placement.

The Amendment Agreements, together with the Private Placement and potential proceeds from the Subsequent

Offering, will serve to increase the cash position of the Company and is estimated to reduce the cash break-even time

charter equivalent rate to USD 17,896 per day for 2017 (taking into account the interest rate swap agreements

commencing in Q2 2017). Current spot rates are however below USD 17,896 per day, hence the near-term cash flow

is expected to remain negative. An increase in the spot rates is required in order for the Company to obtain a positive

cash flow. Based on the current cost level of the Group (taking into account the Amendment Agreements and the

interest rate swap agreements commencing in Q2 2017) and the capital expenditure committed for the period

indicated, the Group is prepared to withstand a conservative average day rate of USD 9,500 until the end of first

quarter in 2019.

Taking into consideration the Amendment Agreements taking effect on 1 January 2017, the maturity profile and

estimated interest costs for the USD 450 million credit facility for each financial period from 30 September 2016 until

maturity will be as follows, assuming that the cash position of the Company will not be above USD 50 million until final

maturity:

In USD million Q4 2016 2017 2018 2019 2020

Repayment ........................................................................................................... 7.9 15.8 15.8 23.7 324.45 Estimated interest ................................................................................................. 3.2 15.4 17.1 17.1 4.0

Note Assuming the facility is fully utilised and based on the current LIBOR forward curve, on a floating rate basis. Approximately 50% has fixed interest

rate of approximately 2.74% commencing in second quarter 2017.

Taking into consideration the Amendment Agreements taking effect on 1 January 2017, the maturity profile and

estimated interest costs for the USD 200 million credit facility for each financial period from 30 September 2016 until

maturity will be as follows, assuming that the cash position of the Company will not be above USD 50 million until final

maturity:

In USD million Q4 2016 2017 2018 2019 2020 2021

Repayment ........................................................................................................... 3.1 6.3 6.3 9.4 12.5 149.2

Estimated interest ................................................................................................. 1.3 7.2 8.6 8.6 7.8 3.5



11.8.2.2 The Private Placement

The Company completed the Private Placement on 25 October 2016, securing approximately USD 55.3 million in gross

proceeds to the Company. For a further description of the Private Placement, see Section 17.1 "The completed Private

Placement".

11.8.3 Off-balance sheet arrangements

The Company does not have any off-balance sheet arrangements as at 30 September 2016.


69

11.9 Impairment

Impairment indicators were identified for the VLGC fleet and impairment testing has been performed on the Group's

VLGC fleet for the three month period ended 30 September 2016. Based on the assessment, an impairment charge of

USD 45.3 million was recognised in the three month period ended 30 September 2016, which represented a write

down of the Group's VLGC vessels to their recoverable amount. The recoverable amount was based on the higher of

fair value less cost of disposal and value-in-use calculation with each vessel as a separate cash generating unit. The

fair value less cost of sales is based on independent third party valuation reports. In addition, the Company recognised

an impairment charge of USD 1.9 million regarding goodwill in the three month period ended 30 September 2016.

Impairment indicators were further identified and tested for the LNG carrier Gaea due to changes in the market

conditions for commercial LPG projects. The impairment testing indicated that the carrying amount exceeded the

recoverable amount of the LNG carrier. Hence, the Company has recorded a vessel impairment charge of USD 6.1

million in the second quarter of 2016, which reflected the estimated fair value of the LNG carrier, less the cost of

disposal. In September 2016, the Group announced that an agreement had been reached for the sale of the vessel,

with delivery and payment in December 2016. The sale proceeds correspond to the book value of the vessel and will

generate approximately USD 13.3 million in net cash proceeds.

11.10 Financial risk management

The Group's objective when managing capital is to safeguard the Group's ability to continue as a going concern in

order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital

structure to reduce the cost of capital. The Group's activities create exposure to a variety of financial risks such as

market risk (including currency risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The

Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise

potential adverse effects on the Group's financial performance.

For further information, see note 8 in the Financial Statements as of, and for the year ended, 31 December 2015,

incorporated by reference hereto, see Section 19.3 "Incorporation by reference".

11.11 Significant change

Other than the Private Placement and the entering into of the Amendment Agreements, there have been no significant

changes in the financial or trading position of the Group since the date of the Interim Financial Statements as of, and

for the three and nine month periods ended, 30 September 2016, which have been incorporated by reference into the

Prospectus, see Section 19.3 "Incorporation by reference".


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12 BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE

12.1 Board of Directors

12.1.1 Overview of the Board of Directors

The Board of Directors is responsible for the overall management of the Company and may exercise all of the powers

of the Company not reserved to the Company's shareholders by its Bye-laws or Bermuda law. The Bye-laws provide

that the Company's Board of Directors shall consist of not less than three Directors and not more than nine Directors

as the Board of Directors may determine or such other minimum and maximum numbers as the shareholders of the

Company may from time to time determine. The Directors are elected by the shareholders at the annual general

meeting or any special general meeting called for that purpose, unless there is a casual vacancy, and the shareholders

of the Company may authorise the Board of Directors to fill any vacancy in their number left unfilled at a general

meeting of the shareholders. If there is a vacancy of the Board of Directors occurring as a result of the death,

disability, disqualification or resignation of any Director or as a result of an increase in the size of the Board of

Directors, the shareholders of the Company or the Board of Directors has the power to appoint a Director to fill the

vacancy.

As of the date of this Prospectus, the Company has a Board of Directors composed of six Directors (the "Directors").

The names and positions of the Directors are set out in the table below. The Directors have been elected for a term

which will expire at the annual general meeting in 2017.

Pursuant to the Norwegian Code of Practice for Corporate Governance, last amended 30 October 2014 (the

"Corporate Governance Code") (i) the majority of the shareholder-elected members of the Board of Directors should

be independent of the Company's executive management and material business contacts, (ii) at least two of the

shareholder-elected members of the Board of Directors should be independent of the Company's main shareholders,

and (iii) no members of the Company's executive management should serve on the Board of Directors. The Board of

Directors is in compliance with these recommendations as of the date of this Prospectus.

The Company's registered office address at Thistle House, 4 Burnaby Street, Hamilton HM 11, Bermuda, serves as the

business address for the members of the Board of Directors in relation to their directorships of the Company.

As at the date of this Prospectus, none of the members of the Board of Directors hold any options or other rights to

acquire Shares.

12.1.2 The Board of Directors

The names and positions, current term and shareholding of the Directors are set out in the table below.

Name Position Served since Term expires Shares

Niels G. Stolt-Nielsen ........................................................... Chairman and Director 2010 AGM 2017 50,000

Jan Chr. Engelhardtsen ......................................................... Director 2014 AGM 2017 -

François Sunier.................................................................... Director 2010 AGM 2017 -

Kate Blankenship ................................................................. Director 2013 AGM 2017 -

Erling Lind .......................................................................... Director 2013 AGM 2017 -

Jan Kastrup-Nielsen ............................................................. Director 2014 AGM 2017 2,800

12.1.3 Brief biographies of the Directors

Set out below are brief biographies of the Directors, including their relevant management expertise and experience, an

indication of any significant principal activities performed by them outside the Company and names of companies and

partnerships of which a Director is or has been a member of the administrative, management or supervisory bodies or

partner the previous five years.

Niels G. Stolt-Nielsen, Chairman

Niels G. Stolt-Nielsen has served as a Director of Avance Gas since 18 March 2010. He has served as a Director of

Stolt-Nielsen Limited since 1996 and as Chief Executive Officer since 2000. He served as Interim Chief Executive

Officer of Stolt Offshore S.A. from September 2002 until March 2003. He was the President of Stolt Sea Farm from

1996 until 2000. In 1994 he opened and organised Stolt-Nielsen Limited's representative office in Shanghai. He joined

the company in 1990 in Greenwich, Connecticut, working for Stolt Tankers. Mr Niels G. Stolt-Nielsen graduated from

Hofstra University in 1990 with a BS degree in Business and Finance. Mr Stolt-Nielsen also serves as a director of

Golar LNG Limited. Mr Stolt-Nielsen is a Norwegian citizen, and resides in the United Kingdom.


71

Current directorships and senior management positions ................. Stolt-Nielsen Investments N.V. (Chairman of the Board), Stolt-Nielsen

M.S. Ltd. (Chairman of the Board), Stolt-Nielsen Gas Ltd. (Director),

Marlowe Insurance Ltd. (Director), Stolt Bitumen Services B.V. (Director),

Stolthaven Terminals B.V. (Director), Stolt-Nielsens Rederi AS (Director),

Stolt-Nielsen Ship Finance Ltd. (Director), Stolt-Nielsen Finance Ltd.

(Director), Stolt-Nielsen Group Resources Ltd. (Director), Stolt-Nielsen

Holdings B.V. (Director), Stolt-Nielsen Limited (Director), Stolt-Nielsen

M.S. Ltd. (Director), Stolt-Nielsen Norway AS (Director), Stolt Tankers

Holdings Ltd. (Director), Stolt Sea Farm Turbot Norway AS (Director),

Stolt Tankers B.V. (Director), Stolt-Nielsen Limited (Chief Executive

Officer), Stolt-Nielsen Group Resources Ltd. (Chief Executive Officer),

Stolt Tank Containers U.K. Limited (Managing Director) and Stolt Tankers

Holdings Ltd. (President).

Previous directorships and senior management positions

last five years ...........................................................................

Stolt Sea Farm Holding Ltd (Director) and Stolt Sea Farm S.A. (Director).

Jan Chr. Engelhardtsen, Director

Jan Chr. Engelhardtsen has served as a Director of Avance Gas since 5 February 2014. He has served as Chief

Financial Officer of Stolt-Nielsen Limited since 1991. He served as Interim Chief Financial Officer, Stolt Offshore S.A.

from September 2002 until March 2003. He served as President and General Manager of Stolt-Nielsen Singapore Pte.

Ltd. from 1988 through 1991. He has been associated with Stolt-Nielsen since 1974. Mr Engelhardtsen holds an MBA

from the Sloan School at the Massachusetts Institute of Technology, as well as undergraduate degrees in Business

Administration and Finance. Mr Engelhardtsen is a Norwegian citizen, and resides in the United Kingdom.

Current directorships and senior management positions ................. Stolt-Nielsen USA Inc. (Director), Stolt-Nielsen Investments N.V.

(Director), Stolt-Nielsen M.S. Ltd. (Director), Stolt-Nielsen Limited (Chief

Financial Officer), Stolt-Nielsen Ship Finance Ltd. (Chief Financial Officer)

and Stolt-Nielsen Finance Ltd. (Chief Financial Officer).


last five years ...........................................................................

None.

François Sunier, Director

François Sunier has served as a Director of Avance Gas since 1 December 2010. He has been the CEO and Managing

Directors of Suntrust Investment Co. S.A. since January 2002. Prior to Suntrust Investment Co. S.A., Mr Sunier

worked as an Executive Director at Goldman Sachs, London and at UBS Philips & Drew, London. François Sunier serves

at the board of Mirabaud SCA and Groupe Minoteries (listed on the Swiss Stock Exchange Market). François Sunier

graduated from the University of Geneva, with a bachelor in political sciences. Mr Sunier is a Swiss citizen, and resides

in Switzerland.

Current directorships and senior management positions ................. Groupe Minoteries S.A. (Director) and Mirabaud SCA (Member of the

Supervisory Board).


last five years ...........................................................................

None.

Kate Blankenship, Director

Kate Blankenship has served as a Director of Avance Gas since 2 October 2013. Mrs Blankenship has also served as a

director of Frontline Ltd since 2003 and Frontline 2012 since December 2011. Mrs Blankenship joined Frontline Ltd in

1994 and served as its Chief Accounting Officer and Secretary until October 2005. Mrs Blankenship has been a director

of Ship Finance International Limited since October 2003, Golden Ocean Group Limited since November 2004, Golar

LNG Limited from July 2003 to September 2015, Golar LNG Partners from September 2007 to September 2015,

Seadrill Limited since May 2005, Seadrill Partners LLC since June 2012, North Atlantic Drilling Ltd since February 2011,

Independent Tankers Corporation Limited since February 2008 and Archer Limited since its incorporation in 2007. Mrs

Blankenship is a member of the Institute of Chartered Accountants in England and Wales. Mrs Blankenship is a British

citizen, and resides in the United Kingdom.

Current directorships and senior management positions ................. Frontline Ltd (Director and member of the audit committee), Frontline

2012 Ltd (Director), Ship Finance International Limited (Director and

member of audit committee), Seadrill Limited (Director and member of

audit committee), Golden Ocean Group Limited (Director and member of

audit committee), Archer Limited (Director and member of audit

committee), North Atlantic Drilling (Director and member of audit

committee) and Seadrill Partners LLC (Director and member of audit


72

committee).


last five years ...........................................................................

Golar LNG Limited (Director and member of the audit committee), Golar

LNG Energy (Director) and Golar LNG Partners (Director and member of

audit committee).

Erling Lind, Director

Erling Lind has served as a Director of Avance Gas since 1 October 2013, and is a partner in the Oslo based law firm

Wiersholm. He graduated from the Faculty of Law at the University of Oslo in 1982 and has, since then, worked as a

lawyer at Wiersholm. He became a partner in 1987. Mr Lind specialises in Corporate Finance and Mergers &

Acquisitions, and has advised clients in the shipping and oil service sectors throughout his career. Mr Lind is a

Norwegian citizen, and resides in Oslo, Norway.

Current directorships and senior management positions ................. Advokatfirmaet Wiersholm AS (Partner), Sevan Drilling ASA (Chairman

of the Board), Eastern Bulk Holding AS (Chairman of the Board), Eastern

Bulk Carriers AS (Chairman of the Board), Tidships AS (Director),

Bergfald Miljørådgivere AS (Chairman of the Board), Spontel AS

(Chairman of the Board), Golar Management Norway AS (Chairman of

the Board) and Allegro AS (Chairman of the Board).


last five years ...........................................................................

Asia Offshore Drilling Ltd. (Chairman of the Board), Frontline

Management AS (Chairman of the Board), Golden Ocean Management

AS (Chairman of the Board), Seadrill Management AS (Chairman of the

Board), Ship Finance Management AS (Chairman of the Board), Frontline

Corporate Services Ltd. (Director), North Atlantic Management AS

(Chairman of the Board), Salt Invest AS (Chairman of the Board),

Basecamp Explorer AS (Chairman of the Board), Verdane Capital V A

Holding AS (Chairman of the Board), Verdane Capital V B Holding AS

(Chairman of the Board), Bryggegata AS (Chairman of the Board),

Inside Too AS (Chairman of the Board), Bred Invest AS (Chairman of the

Board), Archer Management AS (Chairman of the Board) and Scorpion

Offshore Ltd. (Chairman of the Board).

Jan Kastrup-Nielsen, Director

Jan Kastrup-Nielsen has served as a Director of Avance Gas since 14 April 2014. He was previously the President and

CEO of J. Lauritzen. He joined J. Lauritzen in 2000 and prior to becoming the CEO, Jan Kastrup-Nielsen held the

position as COO, and headed both Lauritzen Kosan and Lauritzen Tankers. Prior to joining J. Lauritzen, Mr Kastrup-

Nielsen worked for Trammogas Ltd from 1993 to 2000 in various positions, including as head of chartering and

operation from 1993, as general manager from 1995 and as managing director from 1998, with responsibilities for the

total activities including the global trading. As from 1998, he also served on the board of directors of Transammonia

Inc. Mr Kastrup-Nielsen started his shipping career with A.P. Moller working there from 1978 to 1986, primarily

involved with chartering of ULCC/VLCC and product carriers. He has also served on the board of directors of the

Danish Shipowners Association. Jan Kastrup-Nielsen has through the years attended a number of programs at Insead,

IMD and IESE. Mr Kastrup-Nielsen is a Danish citizen, and resides in Denmark.

Current directorships and senior management positions ................. None.


last five years ...........................................................................

Danish Shipowners Association (Board member), J. Lauritzen (COO) and

J. Lauritzen (President and CEO).

12.2 Management

12.2.1 Overview

The Company's senior management team (the "Management") consists of two individuals, the President and the

Chief Financial Officer. The names of the members of Management as at the date of this Prospectus, and their

respective positions, are presented in the table below:

Name Current position within the Avance Gas Group

Employed with

the Avance Gas

Group since Shares

Christian Andersen ......................................................... President 2010 -

Peder Carl Gram Simonsen ............................................. Chief Financial Officer 2014 1,300


73

The Company's office address at Grev Wedels plass 7, N-0101 Oslo, Norway, serves as the business address for the

members of Management in relation to their employment with the Company.

As at the date of this Prospectus, none of the members of the Management holds any options or other rights to acquire

Shares, except as set out in Section 12.3.3 "Share option plan for Management".

12.2.2 Brief biographies of the members of Management

Set out below are brief biographies of the members of Management, including their relevant management expertise

and experience, an indication of any significant principal activities performed by them outside the Company and names

of companies and partnerships of which a member of Management is or has been a member of the administrative,

management or supervisory bodies or partner the previous five years.

Christian Andersen, President

Christian Andersen founded Avance Gas in September 2007 together with Stolt-Nielsen Gas. He is an employee of

Stolt-Nielsen Gas and is seconded to Avance Gas. Mr. Andersen also serves as chairman of the board of Stolt-Nielsen

Gas. Mr Andersen holds a masters degree in business and marketing from the Oslo Business School. He has 25 years

of experience in the industry and has previously worked as Head of LNG at BW Gas and as founding partner of

Amanda LPG Trading. Mr Andersen is a Norwegian citizen, and resides in Norway.

Current directorships and senior management positions ................. Stolt-Nielsen Gas (Chairman of the Board), Aveiro as (Chairman of the

Board), Ropern Industrier (Chairman of the Board) and

Rederiaksjeselskapet Torvald Klaveness (Director).


last five years ...........................................................................

None.

Peder Carl Gram Simonsen, Chief Financial Officer

Peder Carl Gram Simonsen joined the Avance Gas Group in January 2014 as Chief Financial Officer. Mr Simonsen holds

a B.A. (Hons) in Business Administration from the University of Stirling and a Master of Business degree (Nw.:

Siviløkonom) (2000). He previously held the position of First Vice President at Nordea Bank Norge ASA, where he

worked as senior client executive for large shipping and offshore companies. Mr Simonsen is a Norwegian citizen, and

resides in Norway.

Current directorships and senior management positions ................. Happy Chair AS (Director).


last five years ...........................................................................

None.

12.3 Remuneration and benefits

12.3.1 Remuneration of the Board of Directors

The remuneration of the Board of Directors for 2015 totalled USD 320 thousand. The table below sets out the

remuneration paid to the members of the Board of Directors in 2015 (in USD thousand):

Name Remuneration in 2015

Niels G. Stolt-Nielsen ................................................................................................................... 70

François Sunier............................................................................................................................ 40

Kate Blankenship ......................................................................................................................... 60

Erling Lind .................................................................................................................................. 40

Jan Kastrup-Nielsen ..................................................................................................................... 40

Jan Chr. Engelhardtsen ................................................................................................................. 50

12.3.2 Remuneration of Management

The Board of Directors has established guidelines for the remuneration to the members of the Management. It is a

policy of the Company to offer the Management competitive remuneration based on current market standards,

company and individual performance. The remuneration consists of a basic salary element combined with a

performance based bonus. The Management participates in the Company's insurances and medical coverage, and is

entitled to certain fringe benefits, such as company car, telephone and newspaper. The Group's employees also

participate in the Group's general collective pension agreements.


74

Remuneration of Management is reviewed annually. The work is carried out by the Company's remuneration

committee, which generally considers the Management's performance and also gathers information from comparable

companies before making its recommendation to the Board of Directors for approval. Such recommendation aims to

ensure convergence of the financial interests of the executive personnel and the shareholders.

The remuneration paid to the members of the Management in 2015 was USD 1,232 thousand. The table below sets

out the remuneration of the Management in 2015 (in USD thousand).

Name Salary Bonus

Other

remuneration

Pensions

costs

Total

remuneration

Management ................................................................. 582 532 44 74 1,232

12.3.3 Share option plan for Management

On 15 October 2013, the Group established a share option plan for members of the Management and other key

employees (in total seven persons) covering 1.0 million Shares. 175,000 options were granted in 2013 and 118,200

options were granted in 2015. A total of 220,800 options are outstanding as of the date of this Prospectus. The share

option plan is administered by the Board of Directors and the exercise price is set at the market rate on the day that

the Board of Directors approved the awards. The options granted on 16 October 2013 were based on the share price of

the most recent equity transaction with Frontline 2012 as there were no Shares being traded on 15 October 2013. The

options granted in 2015 were set at the market rate on the day of the issue. Options granted under the share option

plan vest 25% on the first anniversary of the grant date (unless otherwise noted), with an additional 25% vesting on

each subsequent anniversary of continuing employment. Options may be exercisable within five years from the date of

vesting. Options are forfeited by employees upon termination of employment in most circumstances. The Group has no

legal or constructive obligation to repurchase or settle the options in cash. The Company will use any Shares held in

treasury for settlement when options are exercised under the share option plan.

The table below sets out the options granted to members of the Management:

Name Date of grant Number of options Subscription price1 Vesting date(s)

Christian Andersen .................................................... 16 October 2013 15,000 USD 11.78 16 October 2016

15,000 USD 11.78 16 October 2017

18 June 2015 6,000 NOK 118 18 June 2016

6,000 NOK 118 18 June 2017

6,000 NOK 118 18 June 2018

6,000 NOK 118 18 June 2019

54,000

Peder Carl Gram Simonsen ........................................ 16 October 2013 5,000 USD 11.78 2 January 2016

5,000 USD 11.78 2 January 2017

5,000 USD 11.78 2 January 2018

18 June 2015 4,000 NOK 118 18 June 2016

4,000 NOK 118 18 June 2017

4,000 NOK 118 18 June 2018

4,000 NOK 118 18 June 2019

31,000

1 Subscription is adjusted for any dividends following the grant date.

12.4 Benefits upon termination

No employee, including any member of Management, has entered into service contracts with the Company or any of

its subsidiaries which provide for any benefits upon termination. None of the members of the Board of Directors or

have entered into service contracts with Avance Gas or any of its subsidiaries and none will be entitled to any benefits

upon termination of office.

12.5 Pensions and retirement benefits

For the financial year ended 31 December 2015, the costs of pensions for members of Management were USD 74

thousand. The Company has no pension or retirement benefits for its Directors.

12.6 Loans and guarantees

No company in the Group has granted any loans, guarantees or other commitments to any of its Directors or to any


75

member of Management.

12.7 Employees

As at the date of this Prospectus, the Group has 14 employees.

The table below shows the development in the numbers of employees over the last three years.

As at the date of

the Prospectus

Twelve

months

ended 31

December

Thirteen

months

ended 31

December

Twelve

months

ended 30

November

2015 2014 2013

Total Group ......................................................................................................... 14 13 11 7

- Commercial operations in Norway .......................................................................... 14 13 11 7

12.8 Audit committee

The Company has, in line with the recommendations in the Corporate Governance Code, appointed an audit committee

as a preparatory and advisory committee, which consists of two members of the Board of Directors. The audit

committee comprises Mrs Kate Blankenship (chair) and Mr Jan Chr. Engelhardtsen. The members of the audit

committee shall serve while they remain members of the Board of Directors, or until the Board of Directors decides

otherwise or they wish to retire.

The primary purposes of the audit committee are to assist the Board of Directors in discharging its responsibilities in

respect of understanding, assessing and monitoring business risks and financial risks; monitoring annual and interim

financial reporting; overseeing internal control, risk management, internal audit and external audit activities;

overseeing legal and regulatory compliance; overseeing compliance with the Company's governance policies; and

assessing the performance of internal control and external auditor.

The audit committee reports and makes recommendations to the Board of Directors, but the Board of Directors retains

responsibility for implementing such recommendations.

12.9 Remuneration committee

The Board of Directors has, in line with the recommendations in the Corporate Governance Code, established a

remuneration committee amongst the members of the Board of Directors to ensure thorough and independent

preparation of matters relating to compensation og Avance Gas' executive personnel. The remuneration committee

comprises Mr Niels G. Stolt-Nielsen (chair) and Mrs Kate Blankenship. The members of the remuneration committee

shall serve while they remain members of the Board of Directors, or until the Board of Directors decides otherwise or

they wish to retire.

The primary purpose of the remuneration committee is to prepare the basis for decisions of the Board of Directors in

respect of guidelines for the remuneration of the executive personnel of the Group; the President's and the Chief

Financial Officer's fixed and performance based remuneration; the review of the performance of the executive

personnel versus the adopted objectives and recruitment policies, career planning and management development

plans; and the review of other matters relating to material employment issues in respect of the executive personnel,

including the benefits strategy of Avance Gas.

12.10 Corporate governance

The Company has adopted and implemented a corporate governance regime which complies with the Corporate

Governance Code, with the following exceptions:

Deviation from section 2 "Business": In accordance with common practice for Bermuda incorporated companies, the

Company's objects as set out in the memorandum of association are wider and more extensive than recommended in

the Corporate Governance Code.

Deviation from section 3 "Equity and dividends": Pursuant to Bermuda law and common practice for Bermuda

incorporated companies, the Board of Directors has wide powers to issue any authorised but unissued shares on such

terms and conditions as it may decide, subject to any resolution of the Company's shareholders to the contrary.


76

Deviation from section 5 "Freely negotiable shares": The Shares are freely negotiable and the Company's constitutional

documents do not impose any transfer restrictions on the shares other than as set out below. The Bye-laws include a

right for the Board of Directors to decline to register the transfer of any Share in the register of members, or instruct

any registrar appointed by the Company to decline, to register the transfer of any interest in a Share held through the

VPS where such transfer is likely to result in 50% or more of the Shares or votes being held or owned directly or

indirectly by individuals or legal persons resident for tax purposes in Norway or being effectively connected to a

Norwegian business activity or the Company otherwise being deemed a "Controlled Foreign Company" as defined

pursuant to Norwegian tax legislation. The purpose of this provision is to avoid that Avance Gas is deemed a

"Controlled Foreign Company".

Deviation from section 6 "General meetings": As is common for companies incorporated under the laws of Bermuda,

the bye-laws of Avance Gas set forth that, unless otherwise agreed by a majority of those attending and entitled to

vote at a general meeting, the Chairman of the Board of Directors shall act as chairman of the meeting if he is

present. If the Chairman of the Board is absent, a chairman of the meeting shall be appointed or elected by those

present at the meeting and entitled to vote.

Deviation from section 7 "Nomination committee": The bye-laws provide that Avance Gas may have a nomination

committee, comprising such number of persons as the shareholders in a general meeting may determine from time to

time, and members of the nomination committee are appointed by resolution of the shareholders. At Avance Gas' first

annual general meeting following the listing on the Oslo Stock Exchange, the annual general meeting resolved to not

establish a nomination committee.

12.11 Conflicts of interests etc.

During the last five years preceding the date of this Prospectus, none of the members of the Board of Directors and

the Management has, or had, as applicable:

any convictions in relation to indictable offences or convictions in relation to fraudulent offences;

received any official public incrimination and/or sanctions by any statutory or regulatory authorities

(including designated professional bodies) or was disqualified by a court from acting as a member of the

administrative, management or supervisory bodies of a company or from acting in the management or

conduct of the affairs of any company; or

been declared bankrupt or been associated with any bankruptcy, receivership or liquidation in his or her

capacity as a founder, director or senior manager of a company.

Niels G. Stolt-Nielsen is the Chief Executive Officer and a board member, while Jan Chr. Engelhardtsen is the Chief

Financial Officer, of Stolt-Nielsen Limited, the parent company of Stolt-Nielsen Gas. There are currently no other actual

or potential conflicts of interest between the Company and the private interests or other duties of any of the members

of the Management and the Board of Directors, including any family relationships between such persons.


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13 RELATED PARTY TRANSACTIONS

13.1 Introduction

Below is a summary of the Group's related party transactions for the periods covered by the historical financial

information and up to the date of this Prospectus. For further information on related party transactions of the Group,

see notes 7 and 8 of the Financial Statements and the Interim Financial Statements, respectively, incorporated by

reference hereto, see Section 19.3 "Incorporation by reference". All related party transactions have been concluded at

arm's length principles.

13.2 Transactions carried out with related parties in the year ended 31 December 2015, the thirteen

month period ended 31 December 2014 and the financial year ended 30 November 2013

Below is a description of significant transactions between related parties in the year ended 31 December 2015, the

thirteen month period ended 31 December 2014 and the financial year ended 30 November 2013.

13.2.1 Transpetrol repurchase of ships

On 3 July 2012, the Company acquired two VLGC from Transpetrol for a consideration of 5 million Shares (equal to

one-third of the Shares issued and outstanding after such issuance) plus a cash consideration. The share purchase and

issuance resulted in Transpetrol becoming an equal shareholder in the Company with Stolt-Nielsen Gas and Sungas.

Transpetrol repurchased the ships and the Company repurchased Transpetrol's 5.0 million Shares on 19 August 2013.

13.2.2 Transpetrol call and put options

On 3 July 2012, at the same time as Transpetrol purchased a 33 1/3% ownership in the Company and the Company

purchased the two ships from Transpetrol, the Company entered into a put and a call option with Transpetrol. Under

the call option, Transpetrol could repurchase the two ships and at the same time trigger a put option requiring the

Company to repurchase the Shares owned by Transpetrol. On 3 July 2012, the Company recognised a liability and a

reduction in paid-in surplus for the redemption value of the put option.

On 3 July 2013, Transpetrol exercised the above call and put options and withdrew from the Company, effective as of

19 August 2013. This resulted in Transpetrol paying the Company an amount of USD 136.6 million for the two ships

plus related inventory and financing costs. The Company repurchased the Shares owned by Transpetrol for USD 52.9

million and repaid Transpetrol's shareholder loans and interest of USD 33.6 million. A net amount of USD 51.7 million

was paid by Transpetrol at closing and a liability has been recorded for the net amount owed. At the same time, the

Company repaid USD 85.3 million in full repayment on a term loan which had been secured by the two ships and Stolt-

Nielsen Gas and Sungas provided an additional USD 15.0 million each of shareholder loans. As a result of the exercise

of the put option, a gain of USD 1.9 million was recorded in non-operating income for the difference between the

original liability recorded and the amount for which the Company repurchased the Shares.

13.2.3 Share subscription by Frontline 2012

On 22 August 2013, the Company announced that an agreement had been entered into with Frontline 2012 whereby

Frontline 2012 would become a shareholder of the Company along with Stolt-Nielsen Gas and Sungas. The transaction

was finalised on 2 October 2013 with Frontline 2012 subscribing for Shares equal to 37.5% of the Company for USD

70.7 million in a share issue in the Company.

On 17 October 2013, Frontline 2012 distributed 12.5% of its Shares in the Company to its shareholders as a dividend

in specie, retaining a share in the Company of 25%.

13.2.4 Acquisition of newbuildings from Frontline 2012

On 19 November 2013, the Company entered into a newbuilding acquisition agreement with Frontline 2012 regarding

the post-delivery acquisition of Frontline 2012's VLGC newbuilding program, comprising eight VLGCs to be built at the

Jiangnan shipyard. Delivery of the first ship took place in October 2014, with the subsequent seven ships coming at

two to three month intervals thereafter.

The agreed purchase price was USD 75.0 million per ship or USD 600.0 million delivered ex-yard. Avance Gas paid

USD 139.2 million of the purchase price on 31 January 2014, with the balance to be paid upon delivery of each ship.

Frontline 2012 retained responsibility for newbuilding supervision until delivery.

13.2.5 Shareholder's loans

On 29 May 2013, USD 1.5 million was loaned to the Company by the shareholders and an additional USD 30.0 million


78

of shareholder loans were provided by Stolt-Nielsen Gas and Sungas to partially repay Transpetrol for its shareholder

loan on 19 August 2013. The USD 30.0 million loan was repaid when Frontline 2012 provided the Company with a loan

of USD 33.4 million upon acquiring 37.5% of the Company on 2 October 2013.

On 16 October 2013, Stolt-Nielsen Gas, Sungas and Frontline 2012 agreed to convert each of their shareholder loans

outstanding to equity at USD 11.78 per Share. The Company issued approximately 2.8 million Shares to each of the

shareholders.

Interest paid to the shareholders was USD 1.7 million and USD 0.6 million for the financial years ended 30 November

2013 and 2012, respectively.

13.2.6 Service agreement

The Group entered into a service agreement with Stolt-Nielsen Gas for office support services and procurement for the

President in 2013. The Group continued the service agreement for procurement for the President of Avance Gas for the

year ended 31 December 2015 and the thirteen month period ended 31 December 2014. The service agreement for

office support services ended in 2015.

13.2.7 Insurance cover facilitated by a subsidiary of Stolt-Nielsen Limited

A subsidiary of Stolt-Nielsen Limited also provided insurance coverage to the Group for which the expenses was USD

1.3 million for the year ended 31 December 2015 and USD 0.6 million for the thirteen month period ended 31

December 2014 and USD 0.6 million for the financial year ended 30 November 2013.

13.3 Transactions carried out with related parties in the period following 31 December 2015

In the period following 31 December 2015 until the date of this Prospectus, the Group has continued to transact with

related parties as in prior periods.


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14 CORPORATE INFORMATION AND DESCRIPTION OF THE SHARE CAPITAL

The following is a summary of certain corporate information and material information relating to the Shares and share

capital of the Company and certain other shareholder matters, including summaries of certain provisions of the

Company's memorandum of association, Bye-laws and applicable Norwegian and Bermuda law in effect as at the date

of this Prospectus, including the Bermuda Companies Act. The summary does not purport to be complete and is

qualified in its entirety by the Company's memorandum of association, Bye-laws and applicable law.

14.1 Company corporate information

The Company's registered and commercial name is Avance Gas Holding Ltd. The Company was incorporated on 29

January 2010 by Stolt-Nielsen Gas as an exempted company limited by shares under the laws of Bermuda and in

accordance with the Bermuda Companies Act. The Company's registration number is 43939. The Company's registered

office is at Thistle House, 4 Burnaby Street, Hamilton HM 11, Bermuda, telephone: + 1 441 295 9671 and facsimile:

+1 441 292 5962. The Company's website is www.avancegas.com. Neither the content of www.avancegas.com nor of

the Group's other websites, is incorporated by reference into or otherwise forms part of this Prospectus.

14.2 Legal structure

The Company, the parent company of the Group, is a holding company and the operations of the Group are carried out

through the operating subsidiaries of the Company. The following table sets out information about the entities in which

the Group, as at the date of this Prospectus, holds (directly or indirectly) more than 10% of the outstanding capital

and votes.

Company

Country of

incorporation Field of activity Holding (%):

Avance Gas Ltd Bermuda Holding company 100

Avance Gas AS Norway Management 100

Avance Ltd Marshall Islands Shipowning company (Avance) 100

Avance Thetis Glory Ltd Marshall Islands Shipowning company (Thetis Glory) 100

Avance Venus Glory Ltd Marshall Islands Shipowning company (Venus Glory) 100

Avance Breeze Ltd Marshall Islands Shipowning company (Breeze) 100

Avance Chinook Ltd Marshall Islands Shipowning company (Chinook) 100

Avance Iris Glory Ltd Marshall Islands Shipowning company (Iris Glory) 100

Avance Levant Ltd Marshall Islands Shipowning company (Levant) 100

Avance Mistral Ltd Marshall Islands Shipowning company (Mistral) 100

Avance Monsoon Ltd Marshall Islands Shipowning company (Monsoon) 100

Avance Pampero Ltd Marshall Islands Shipowning company (Pampero) 100

Avance Passat Ltd Marshall Islands Shipowning company (Passat) 100

Avance Promise Ltd Marshall Islands Shipowning company (Promise) 100

Avance Providence Ltd Marshall Islands Shipowning company (Providence) 100

Avance Sirocco Ltd Marshall Islands Shipowning company (Sirocco) 100

Delta Shipping Ltd Marshall Islands Shipowning company (Gaea)1 100

1 In September 2016, Avance Gas reached an agreement to sell the 1980-built LNG carrier Gaea, with delivery and payment in December 2016.

As at the date of this Prospectus, and other than in respect of its holding in Avance Gas AS, the Group is of the opinion

that its holdings in all of the entities specified above are likely to have a significant effect on the assessment of its own

assets and liabilities, financial condition or profits and losses.


80

The following condensed chart sets out the Group's legal structure as at the date of this Prospectus:

14.3 Authorised and issued share capital

As at the date of this Prospectus, Avance Gas' authorised share capital is USD 200,000,000 consisting of 200,000,000

Shares with a nominal value of USD 1.00 each, of which 62,027,972 Shares have been issued and fully paid. The

Board of Directors may issue any authorised but unissued shares of the Company subject to any resolution of the

Company's shareholders to the contrary. As of the date of this Prospectus, no such resolution has been passed by the

shareholders. Assuming all Offer Shares are issued in the Subsequent Offering, the Board of Directors will following the

Subsequent Offering be authorised to issue 135,472,028 authorised but unissued shares of the Company.

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Avance Gas

Holding Ltd

Avance Gas

Ltd

Avance Sirocco

Ltd

Sirocco

Avance Gas AS

Avance Levant

Ltd

Levant

Avance Ltd

Avance

Avance Thetis

Glory Ltd

Thetis

Glory

Avance Venus

Glory Ltd

Venus Glory

Avance Breeze

Ltd

Breeze

Avance Chinook

Ltd

Chinook

Avance Iris Glory

Ltd

Iris Glory

Avance Promise

Ltd

Promise

Avance Passat

Ltd

Passat

Avance Pampero

Ltd

Pampero

Avance Monsoon

Ltd

Monsoon

Avance Mistral

Ltd

Mistral

Avance Providence

Ltd

Providence

Delta Shipping

Ltd

Gaea


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The Shares have been created under the Bermuda Companies Act and are registered in the VPS under ISIN

BMG067231032. All the Shares rank in parity with one another and carry one vote per share.

The Company has one class of shares. The Shares are equal in all respect and each Share carries one vote at the

general meetings of shareholders. Except as set out in Section 12.3.3 "Share option plan for Management", there are

no share options or other rights to subscribe or acquire Shares issued by the Company.

14.4 Share capital history

The table below shows the development in Avance Gas' authorised share capital for the period from its incorporation to

the date hereof:

Date Type of change

Change in

authorised share

capital (USD)

New authorised

share capital

(USD)

No. of authorised

shares

Nominal value

per share (USD)

29 January 2010 Authorised on

incorporation

- 10,010 1,000 class B shares

and 1 class A share

10.00

24 November 2010 Subdivision,

redesignation,

variation of rights &

increase in authorised

share capital

9,989,990 10,000,000 10,000,000 common

shares

1.00

23 September 2011 Increase in authorised

share capital

5,000,000 15,000,000 15,000,000 1.00

25 September 2013 Increase in authorised

share capital

185,000,000 200,000,000 200,000,000 1.00

The table below shows the development in Avance Gas' issued share capital for the period from incorporation to the

date hereof:

Date Type of change

Change in issued

share capital

(USD)

New issued

share capital

(USD)

No. of issued

shares

Nominal value

per share (USD)

29 January 2010 Incorporation1 - 10,010 1,000 class B shares

and 1 class A share

10.00

24 November 2010 Subdivision,

redesignation,

variation of rights

- 10,010 10,010 common

shares

1.00

24 November 2010 Share issuance2 4,989,990 5,000,000 5,000,000 1.00

1 December 2010 Share issuance3 5,000,000 10,000,000 10,000,000 1.00

26 June 2012 Share issuance4 5,000,000 15,000,000 15,000,000 1.00

15 August 2013 Share purchase5 5,000,000 10,000,000 10,000,000 1.00

2 October 2013 Share issuance6 6,000,000 16,000,000 16,000,000 1.00


20 November 2013 Share issuance8 5,882,786 30,383,710 30,383,710 1.00

14 April 2014 Share issuance9 4,894,262 35,277,972 35,277,972 1.00


1 The Shares were subscribed at a price of USD 10.00 each.




5 The Shares were repurchased at a price of USD 10.59 each.




9 The Shares were subscribed at a price of NOK 122 each (less a retail discount of NOK 1,500 to each of the 3,640 retail investors in the offering).

10 The Shares were subscribed at a price of NOK 17.00 each.

In the period from 29 January 2010 to the date of this Prospectus, USD 18.5 million of the issued share capital has

been paid with assets other than cash (corresponding to approximately 29.8% of the current issued share capital).

14.5 Listing on the Oslo Stock Exchange

The Shares are, and the Private Placement Shares and the Offer Shares will be, admitted to trading on the Oslo Stock

Exchange. The Company currently expects commencement of trading in the Private Placement Shares on the Oslo

Stock Exchange on or around 27 October 2016 and trading in the Offer Shares on the Oslo Stock Exchange on or


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around 18 November 2016. The Company has not applied for admission to trading of the Shares on any other stock

exchange or regulated market.

14.6 VPS registration of the Shares

14.6.1 Introduction

In order to facilitate registration of the beneficial interests in the Shares with the VPS, including the Offer Shares, the

Company has entered into the Registrar Agreement with the VPS Registrar DNB Bank ASA, who operates the

Company's VPS share register. Pursuant to the Registrar Agreement, the VPS Registrar is registered as holder of the

Shares in the register of members in Bermuda that the Company is required to maintain pursuant to Bermuda law.

The VPS Registrar registers the beneficial interests in the Shares, including the Offer Shares, in book-entry form with

the VPS. Therefore, it is not the Shares, including the Offer Shares, in registered form issued in accordance with the

Bermuda Companies Act, but the beneficial interests in such Shares in book-entry form that are registered with the

VPS.

At the date of this Prospectus, the Company has only one class of Shares. The Shares have ISIN BMG067231032.

The beneficial interests in the Shares are, and the Offer Shares will be, registered in book-entry form with VPS under

the category of a "share" and it is such interest in the Shares that will be registered and traded on the Oslo Stock

Exchange. Each such share registered with the VPS will represent beneficial ownership of one Share. The beneficial

interests registered with the VPS are freely transferable, with delivery and settlement through the VPS system.

14.6.2 The Registrar Agreement

Beneficial shareholders must look solely to the VPS Registrar for the payment of dividends, for the exercise of voting

rights attaching to the Shares and for all other rights arising in respect of the Shares. In order to exercise any rights

as shareholder under Bermuda law or the Bye-laws, a VPS shareholder must transfer his shareholding from the VPS to

the register of members held in Bermuda. Such transfer will disable trading on the Oslo Stock Exchange, until the

Shares are transferred back to the VPS. Shareholders who wish to transfer their Shares from the VPS to their name in

the register of members must contact the VPS Registrar.

The Company will pay dividends directly to the VPS Registrar, which in turn has undertaken to distribute the dividends

to the beneficial shareholders in accordance with the Registrar Agreement. Beneficial shareholders who maintain a

Norwegian address in the VPS Register or have supplied VPS with details of their NOK account shall receive their

dividend payment in NOK to such account. Dividends will however be resolved and paid by the Company in USD as the

accounting currency of Avance Gas. Beneficial shareholders whose address registered with the VPS is outside Norway

and who have not supplied the VPS with details of any NOK account, will receive dividends by cheque in their local

currency. If it is not practical in the VPS Registrar's sole opinion to issue a cheque in a local currency, a cheque will be

issued in USD. The exchange rate(s) that will be applied will be DNB Bank ASA's exchange rate on the date of

issuance.

Other than in accordance with proxies from beneficial holders of Shares registered in the VPS, the VPS Registrar has

undertaken not to attend or vote at the Company's general meeting of shareholders. The VPS Registrar is only liable

for direct financial loss (limited to NOK 500 million for any individual error) which is due to negligence on the part of

the VPS Registrar.

Each of the Company's and the VPS Registrar may terminate the Registrar Agreement at any time with a minimum of

three months' prior written notice, or immediately upon written notice of a material breach by the other party of the

Registrar Agreement. In the event that the Registrar Agreement is terminated, the Company will use its reasonable

best efforts to enter into a replacement agreement for purposes of permitting the uninterrupted trading of the Shares

on the Oslo Stock Exchange.

14.7 Ownership structure

As of 20 October 2016, the Company had 4,122 shareholders. The Company's 20 largest shareholders as of the same

date (i.e. prior to the issuance of the Private Placement Shares) are shown in the table below.


1 Stolt-Nielsen Gas Limited ............................................................... 2,478,799 7.03%

2 Sungas Holdings Ltd ....................................................................... 2,478,799 7.03%

3 Hemen Holding Limited ................................................................... 1,687,251 4.78%

4 Nordnet Bank AB ............................................................................ 1,401,876 3.97%

5 Folketrygdfondet ............................................................................ 1,082,854 3.07%


83


6 Danske Bank A/S ............................................................................ 1,011,522 2.87%

7 Pioneer Multi-Asset Income Fnd........................................................ 931,575 2.64%

8 Avance Gas Holding Ltd ................................................................... 871,639 2.47%

9 State Street Bank & Trust Company .................................................. 606,366 1.72%

10 Avanza Bank AB ............................................................................. 602,527 1.71%

11 The Bank of New York Mellon SA/NV ................................................. 571,284 1.62%

12 Barclays Capital Inc ........................................................................ 557,928 1.58%

13 Skandinaviska Enskilda Banken AB ................................................... 517,422 1.47%

14 Morgan Stanley & Co. International .................................................. 507,240 1.44%

15 UBS Switzerland AG ........................................................................ 505,370 1.43%

16 Goldman, Sachs & Co. ..................................................................... 455,055 1.29%

17 State Street Bank & Trust Company .................................................. 421,369 1.19%

18 Jefferies LLC .................................................................................. 412,500 1.17%

19 Jolly Roger AS ................................................................................ 390,000 1.11%

20 Swedbank Generator ...................................................................... 350,000 0.99%

Top 20 shareholders .................................................................... 17,841,376 50.57%

Others ......................................................................................... 17,436,596 49.43%

Total ............................................................................................ 35,277,972 100.0%

Each of the Shares carries one vote. There are no differences in voting rights between the Shares.

Shareholders owning 5% or more of the Shares have an interest in the Company's share capital which is notifiable

pursuant to the Norwegian Securities Trading Act. See Section 15.7 "Disclosure obligations" for a description of the

disclosure obligations under the Norwegian Securities Trading Act. As of the date of this Prospectus (i.e. after the

issuance of the Private Placement Shares) and as far as the Company is aware, no shareholder, other than Stolt-

Nielsen Gas (8.8%), Sungas (8.8%) and Hemen Holding Limited (8.7%), holds more than 5% of more of the issued

Shares.

The Company is not aware of any persons or entities who, either directly or indirectly, exercise control over the

Company. Further, the Company is not aware of any arrangements the operation of which may at a subsequent date

result in a change of control of the Company. The Shares have not been subject to any public takeover bids.

14.8 Share repurchase and treasury shares

Pursuant to the Bye-laws, the Company may purchase its own shares for cancellation or acquire them as treasury

shares on such terms and in such manner as may be authorised by the Board of Directors, subject to the Bermuda

Companies Act. The Board of Directors may exercise all the powers of the Company to purchase its own Shares.

As of the date of this Prospectus, the Company owns 871,639 Shares in the Company, each with a par value of USD

1.00, with an aggregate book value of USD 11,867 thousand as of 30 September 2016. Pursuant to the Bye-laws, the

rights attached to such shares are suspended and shall not be exercised by the Company while it holds such shares in

treasury.

14.9 Other financial instruments

Except as set out in Section 12.3.3 "Share option plan for Management" above, neither the Company nor any of its

subsidiaries has issued any options, warrants, convertible loans or other instruments that would entitle a holder of any

such instrument to subscribe for any shares in the Company or its subsidiaries.

14.10 Shareholder rights

The Company has one class of Shares in issue, and all Shares in that class have equal rights to all such other shares in

that class as set out in the Bye-laws.

14.11 The memorandum of association, Bye-laws and Bermuda law

The Bye-laws are set out in Appendix A to this Prospectus. Below is a summary of provisions of the Bye-laws and

certain aspects of applicable Bermuda law. The Bye-laws of the Company do not place more stringent conditions for

the change of rights of holders than those required by the Bermuda Companies Act, see Section 14.11.4 "Variation of

share rights" and Section 14.11.5 "Voting rights".


84

14.11.1 Objects of the Company

The objects for which the Company was formed, as set out in paragraph 6 of its memorandum of association, are wide

and unrestricted. The Company can therefore, subject to the Board of Directors' opinion, undertake lawful activities

without restriction on its capacity and it has all the powers of a natural person.

14.11.2 Board of Directors

The Bye-laws provide that the Company shall be managed by the Board of Directors subject to the Bermuda

Companies Act and the Bye-laws. Generally, the Board of Directors may exercise the powers of the Company, except

to the extent the Bermuda Companies Act or the Bye-laws reserve such power to the shareholders.

The Board of Directors shall consist of not less than three Directors and not more than nine Directors as the Board of

Directors may determine or such other minimum and maximum numbers as the shareholders of the Company may

from time to time determine.

Directors are elected by the shareholders, except in the case of a casual vacancy, at the annual general meeting or at

any special general meeting called for that purpose, for such term of office as the shareholders determine, or, in the

absence of such determination, until the next annual general meeting or until their successors are elected or appointed

or their office is otherwise vacated. If there is a vacancy of the Board of Directors occurring as a result of the death,

disability, disqualification or resignation of any Director or as a result of an increase in the size of the Board of

Directors, the shareholders of the Company or the Board of Directors has the power to appoint a Director to fill the

vacancy.

A Director may resign by providing notice in writing to the Company of such resignation. A Director may be removed

at any general meeting convened and held in accordance with the Bye-laws, provided that the notice of any such

meeting convened for the purpose of removing a Director contains a statement of the intention to remove the Director

and must be served on the Director not less than 14 days before the meeting. The Director shall be entitled to attend

the meeting and be heard on the motion for such Director's removal. The office of a Director of the Company shall be

vacated if he or she (i) is removed from office pursuant to the Bye-laws or is prohibited from being a Director by law;

(ii) is or becomes bankrupt, or makes any arrangement or composition with his creditors generally; (iii) is or becomes

of unsound mind or dies, or (iv) resigns his office by notice to the Company.

A Director may hold any office or act for the Company in any capacity (except as auditor). Provided a Director

discloses a direct or indirect interest in any contract or arrangement with the Company as required by Bermuda law,

such Director is entitled to vote in respect of any such contract or arrangement in which he or she is interested unless

he or she is disqualified from voting by the chairman of the relevant Board meeting. Notwithstanding the previous

sentence and save as provided in the Bye-laws, a Director may not vote, be counted in the quorum or act as chairman

at a meeting in respect of (i) his appointment to hold any office or place of profit with the Company or any body

corporate or other entity in which the Company owns an equity interest or (ii) the approval of the terms of any such

appointment or of any contract or arrangement in which he is materially interested (otherwise than by virtue of his

interest in shares, debentures or other securities of the Company), provided that, a Director is entitled to vote (and be

counted in the quorum and act as chairman) in respect of any resolution concerning any of the following matters,

namely: (a) the giving of any security, guarantee or indemnity to him in respect of money lent or obligations incurred

by him for the benefit of the Company; or (b) any proposal concerning any other body corporate in which he is

interested directly or indirectly, whether as an officer, shareholder, creditor or otherwise, provided that he is not the

holder of or beneficially interested (other than as a bare custodian or trustee in respect of shares in which he has no

beneficial interest) in more than 1% of any class of the issued share capital of such body corporate (or of any third

body corporate through which his interest is derived) or of the voting rights attached to all of the issued shares of the

relevant body corporate (any such interest being deemed for the purpose of the Bye-laws to be a material interest in

all circumstances); and (c) in the case of an alternate Director, an interest of a Director for whom he is acting as

alternate shall be treated as an interest of such alternate Director in addition to any interest which the alternate

Director may otherwise have. If any question arises at a meeting as to the materiality of a Director's interest or as to

the entitlement of any Director to vote, and such question is not resolved by such Director voluntarily agreeing to

abstain from voting and not be counted in the quorum of such meeting, such question shall be referred to the

chairman of the meeting (except in the event the Director is also the chairman of the meeting, in which case the

question shall be referred to the other Directors present at the meeting) and his (or their, as the case may be) ruling

in relation to such Director shall be final and conclusive, except in a case where the nature or extent of the interest of

the Director concerned has not been fully disclosed.


85

14.11.3 Share rights

The holders of Shares have no pre-emptive, redemption, conversion or sinking fund rights. The holders of Shares are

entitled to one vote per Share on all matters submitted to a vote of the holders of Shares. Unless a different majority

is required by law or by the Bye-laws, resolutions to be approved by the holders of Shares require approval by the

affirmative votes of a majority of votes cast at a meeting at which a quorum is present.

In the event of the liquidation, dissolution or winding up of the Company, the holders of Shares are entitled to share

equally and rateably in its assets, if any, remaining after the payment of all of the Company's debts and liabilities.

14.11.4 Variation of share rights

Subject to the Bermuda Companies Act, all or any of the rights attached to any class of Shares issued may (whether

or not the Company is being wound up) be varied with the consent in writing of the holders of not less than 75% of

the issued Shares of that class or with the sanction of a resolution passed by a majority of the votes cast at a separate

general meeting of the holders of such Shares voting in person or by proxy. To any such separate general meeting, all

the provisions of the Bye-laws as to general meetings of the Company shall apply, but so that the necessary quorum is

two or more persons holding or representing by proxy at least one third of the issued Shares of the relevant class, that

every holder of Shares of the relevant class shall be entitled on a poll to one vote for every such Share held by him

and that any holder of Shares of the relevant class present in person or by proxy and holding at least 10% of the total

voting rights of the Shares of the relevant class in person or by proxy, may demand a poll; provided, however, that if

Avance Gas or a class of shareholders shall have only one shareholder, one shareholder present in person or by proxy

shall constitute the necessary quorum. The Bye-laws specify that the creation or issue of Shares ranking equally with

existing Shares will not, unless expressly provided by the terms of issue of existing Shares, vary the rights attached to

existing Shares.

14.11.5 Voting rights

At any general meeting, every holder of Shares present in person and every person holding a valid proxy shall have

one vote on a show of hands. On a poll, every such holder of Shares present in person or by proxy shall have one vote

for every Share held.

Except where a greater majority is required by the Bermuda Companies Act or the Bye-laws, any question proposed

for the consideration of the shareholders at a general meeting shall be decided by the affirmative votes of a majority

of the votes cast in accordance with the provisions of the Bye-laws and in case of an equality of votes, the resolution

shall fail.

14.11.6 Amendment of the memorandum of association and the Bye-laws

The Bye-laws provide that the memorandum of association of the Company may not be altered or amended, unless it

shall have been approved by a resolution by the Board of Directors and by a resolution passed with the affirmative

vote of a majority of the votes cast at a general meeting of shareholders. The Bye-laws further provide that no bye-

law shall be rescinded, altered or amended, and no new bye-law shall be made, unless it shall have been approved by

a resolution of the Board of Directors and by a resolution of the shareholders with the affirmative vote of a majority of

the votes cast at a general meeting of shareholders.

Under the Bermuda Companies Act, the holders of an aggregate of not less than 20% in nominal value of the

Company's issued share capital or any class thereof have the right to apply to the Supreme Court of Bermuda for an

annulment of any amendment of the memorandum of association adopted by shareholders at any general meeting,

other than an amendment which alters or reduces a company's share capital as provided in the Bermuda Companies

Act. Where such an application is made, the amendment becomes effective only to the extent that it is confirmed by

the Supreme Court of Bermuda. An application for an annulment of an amendment of the memorandum of association

must be made within 21 days after the date on which the resolution altering the Company's memorandum of

association is passed and may be made on behalf of persons entitled to make the application or by one or more of

their number as they may appoint in writing for the purpose. No application may be made by shareholders voting in

favour of the amendment.

14.11.7 General meeting of shareholders

The annual general meeting of the Company shall be held once in every year at such time and place as the Chairman

(if any) or the Board of Directors shall appoint. The Chairman (if any) or the Board of Directors may whenever they

think fit convene special general meetings of the Company. The Board of Directors shall on the requisition of

shareholders holding at the date of the deposit of the requisition not less than one-tenth of the paid-up voting share


86

capital of the Company, forthwith proceed to convene a special general meeting of the Company.

At least 21 days' notice of an annual general meeting shall be given to each shareholder entitled to attend and vote

thereat, stating the date, place and time at which the meeting is to be held, that the election of directors will take

place thereat and, as far as practicable, the other business to be conducted at the meeting. At least 21 days' notice of

a special general meeting shall be given to each shareholder entitled to attend and vote thereat, stating the date,

place and time and the general nature of the business to be considered at the meeting. The Board may fix any date as

the record date for determining the shareholders entitled to receive notice of and to vote at any general meeting,

provided that the Board of Directors may specify in the notice of any meeting sent to the shareholders a time and a

date for determining shareholders entitled to vote at that general meeting which is not more than five days before the

date fixed for the meeting. A general meeting of Avance Gas shall notwithstanding that it is called on shorter notice

than that specified in the Bye-laws, be deemed to have been properly called if it is agreed by (i) in the case of an

annual general meeting by all of the shareholders entitled to attend and vote at such meeting; or (ii) in the case of a

special general meeting by a majority in number of the shareholders having the right to attend and vote at the

meeting being a majority together holding not less than 95% in nominal value of the shares entitled to attend and

vote at such meeting.

The accidental omission to give notice of a general meeting to, or the non-receipt of a notice of a general meeting by,

any person entitled to receive notice shall not invalidate the proceedings at that meeting. Notwithstanding any other

provision of the Bye-laws, no shareholder shall be entitled to attend any general meeting unless notice in writing of

the intention to attend and vote in person or by proxy signed by or on behalf of the shareholder (together with a

power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof) addressed to

the secretary of the Company is deposited (by post, courier, facsimile transmission or other electronic means) at the

registered office of the Company at least 48 hours before the time appointed for holding the general meeting or the

adjournment thereof.

Shareholders may participate in any general meeting by means of such telephonic, electronic or other communication

facilities or means as permits all persons participating in the meeting to communicate with each other simultaneously

and instantaneously, and participation in such meeting shall constitute presence in person at such meeting. Except as

otherwise provided in the Bye-laws, the quorum at any general meeting of the Company shall be constituted by two or

more persons, present in person and representing in person or by proxy and entitled to vote (whatever the number of

shares held by them).

14.11.8 Dividend rights

Under Bermuda law, a company may not declare or pay dividends if there are reasonable grounds for believing that:

(i) the company is, or would after the payment be, unable to pay its liabilities as they become due; or (ii) that the

realisable value of its assets would thereby be less than its liabilities. Under the Bye-laws, each of the Shares is

entitled to such dividends as the Board of Directors may from time to time declare.

Dividend or other monies payable in respect of any shares which remain unclaimed for six years from the date when

such monies became due for payment shall be forfeited and revert to the Company. In addition, the Company shall be

entitled to cease sending dividend warrants and cheques by post or otherwise to a shareholder if such instruments

have been returned undelivered to, or left uncashed by, such shareholder on at least two consecutive occasions or,

following one such occasion, reasonable enquires have failed to establish the shareholder's new address. This

entitlement ceases if the shareholder claims a dividend or cashes a dividend cheque or a warrant. Neither the Bye-laws

nor Bermuda law restrict the ability of the Company to declare and pay dividends to persons who are non-resident of

Bermuda for exchange control purposes.

14.11.9 Transfer of shares

The Bye-laws provide that the Board of Directors may refuse to register the transfer of any interest in any Share in the

register of members and may direct any registrar to decline to register the transfer where such transfer would result in

50% or more of the shares or votes in the Company being held or owned directly or indirectly by individuals or legal

persons resident for tax purposes in Norway or connected to a Norwegian business activity or the Company otherwise

being deemed a "Controlled Foreign Company" as such term is defined under the Norwegian tax rules.

Subject to the above, but notwithstanding anything to the contrary in the Bye-laws, shares that are listed or admitted

to trading on an appointed stock exchange may be transferred in accordance with the rules and regulations of such

exchange. Where applicable, all transfers of uncertificated shares shall be made in accordance with and be subject to

the facilities and requirements of the transfer of title to shares in that class by means of the VPS or any other relevant


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system concerned and, subject thereto, in accordance with any arrangements made by the Board of Directors in

accordance with the Bye-laws. The Board of Directors shall refuse any transfer unless the registration of such transfer

satisfies all applicable consents, authorisations and permissions of any governmental body or agency in Bermuda. The

Board of Directors may also refuse to recognise an instrument of transfer of a share unless it is accompanied by the

relevant share certificate (if one has been issued) and such other evidence of the transferor's right to make the

transfer as the Board of Directors shall reasonably require. Subject to these restrictions, a holder of Shares may

transfer the title to all or any of his Shares by completing an instrument of transfer in the usual common form or in

any other form as the Board of Directors may approve. The instrument of transfer must be signed by the transferor

and transferee, although in the case of a fully paid share the Board of Directors may accept the instrument signed only

by the transferor. Shares may be transferred without a written instrument if transferred by an appointed agent or

otherwise in accordance with the Bermuda Companies Act.

In accordance with Bermuda law, share certificates are only issued in the names of companies, partnerships or

individuals. In the case of a shareholder acting in a special capacity (for example as a trustee), certificates may, at the

request of the shareholder, record the capacity in which the shareholder is acting. Notwithstanding such recording of

any special capacity, the Company is not bound to investigate or see to the execution of any such trust. The Company

will take no notice of any trust applicable to any of the Shares, whether or not the Company has been notified of such

trust.

See Section 2.8 "Risks related to the Company's incorporation in Bermuda" for a summary of the provisions in the

Bye-laws that contain provisions that could make it more difficult for a third party to acquire the Company without the

consent of the Board of Directors.

14.11.10 Amalgamations and mergers

The amalgamation or merger of a Bermuda company with another company or corporation (other than certain

affiliated companies) requires the amalgamation or merger agreement to be approved by the company's board of

directors and by its shareholders. Unless the bye-laws provide otherwise, the approval of 75% of the shareholders

voting at such meeting is required to approve the amalgamation or merger agreement, and the quorum for such

meeting must be two persons holding or representing more than one-third of the issued shares of the company. On

the date hereof the Company's Bye-laws does not deviate from these requirements.

14.11.11 Appraisal rights and other shareholder suits

Under the Bermuda Companies Act, in the event of an amalgamation or merger of a Bermuda company with another

company or corporation, a shareholder of the Bermuda company who is not satisfied that fair value has been offered

for such shareholder's shares may, within one month of notice of the general meeting, apply to the Bermuda Supreme

Court to appraise the fair value of those shares.

Class actions and derivative actions are generally not available to shareholders under Bermuda law. The Bermuda

courts, however, would ordinarily be expected to permit a shareholder to commence an action in the name of a

company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate power

of the company or is illegal or would result in the violation of the company's memorandum of association or bye-laws.

Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud against

the minority shareholders or, for instance, where an act requires the approval of a greater percentage of the

company's shareholders than that which actually approved it.

When the affairs of a company are being conducted in a manner which is oppressive or prejudicial to the interests of

some part of the shareholders, one or more shareholders may apply to the Supreme Court of Bermuda, which may

make such order as it sees fit, including an order regulating the conduct of the company's affairs in the future or

ordering the purchase of the shares of any shareholders by other shareholders or by the company.

14.11.12 Capitalisation of profits and reserves

Pursuant to the Bye-laws, the Board of Directors may (i) capitalise any part of the amount of the Company's share

premium or other reserve accounts or any amount credited to the Company's profit and loss account or otherwise

available for distribution by applying such sum in paying up unissued shares to be allotted as fully paid bonus shares

pro-rata (except in connection with the conversion of shares of one class to shares of another class) to the

shareholders; or (ii) capitalise any sum standing to the credit of a reserve account or sums otherwise available for

dividend or distribution by paying up in full, partly paid or nil paid shares of those shareholders who would have been

entitled to such sums if they were distributed by way of dividend or distribution.


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14.11.13 Access to books and records and dissemination of information

Members of the general public have the right to inspect the public documents of a Bermuda company available at the

office of the Registrar of Companies in Bermuda. These documents include the Company's memorandum of

association, including its objects and powers, and certain alterations to its memorandum of association. The

shareholders have the additional right to inspect the Bye-laws of the Company, minutes of general meetings and the

Company's audited financial statements, which must be laid before at the annual general meeting. The register of

members of a Bermuda company is also open to inspection by shareholders and by members of the general public

without charge. The register of members is required to be open for inspection for not less than two hours in any

business day (subject to the ability of a company to close the register of shareholders for not more than thirty days in

a year). A company is required to maintain its share register in Bermuda but may, subject to the provisions of the

Bermuda Companies Act, establish a branch register outside Bermuda. A company is required to keep at its registered

office a register of directors and officers that is open for inspection for not less than two hours in any business day by

members of the public without charge. Bermuda law does not, however, provide a general right for shareholders to

inspect or obtain copies of any other corporate records. Where a company, the shares of which are listed on an

Appointed Stock Exchange, sends its summarised financial statements to its shareholders pursuant to Section 87A of

the Bermuda Companies Act, a copy of the full financial statements (as well as the summarised financial statements)

must be available for inspection by the public at the company's registered office. A company is required to maintain a

register of directors at the office of the Registrar of Companies in Bermuda. The deadline for filing such register is 31

December 2016, which register shall be available for public inspection subject to such conditions as the Registrar may

impose.

14.11.14 Winding-up

A company may be wound up by the Bermuda court on application presented by the company itself, its creditors

(including contingent or prospective creditors) or its contributories. The Bermuda court has authority to order winding

up in a number of specified circumstances including where it is, in the opinion of the Bermuda court, just and equitable

to do so.

A company may be wound up voluntarily when the members so resolve in general meeting, or, in the case of a limited

duration company, when the period fixed for the duration of the company by its memorandum of association expires,

or the event occurs on the occurrence of which the memorandum provides that the company is to be dissolved. In the

case of a voluntary winding up, the company shall, from the commencement of the winding up, cease to carry on its

business, except so far as may be required for the beneficial winding up thereof.

Where, on a voluntary winding up, a majority of directors make a statutory declaration of solvency, the winding up will

be deemed a "members' voluntary winding up". In any case where such declaration has not been made, the winding

up will be deemed a "creditors' voluntary winding up".

In the case of a members' voluntary winding up of a company, the company in general meeting must appoint one or

more liquidators within the period prescribed by the Bermuda Companies Act for the purpose of winding up the affairs

of the company and distributing its assets. If the liquidator is at any time of the opinion that the company will not be

able to pay its debts in full in the period stated in the directors' declaration of solvency, he is obliged to summon a

meeting of creditors and lay before the meeting a statement of the assets and liabilities of the company.

As soon as the affairs of the company are fully wound up via a members' voluntary winding up, the liquidator must

make up an account of the winding up, showing how the winding up has been conducted and the property of the

company has been disposed of, and thereupon call a general meeting of the company for the purposes of laying before

it the account, and giving any explanation thereof. This final general meeting shall be called by advertisement in an

appointed newspaper, published at least one month before the meeting. Within one week after the meeting the

liquidator shall notify the Registrar of Companies in Bermuda that the company has been dissolved and the Registrar

of Companies in Bermuda shall record that fact in accordance with the Bermuda Companies Act.

In the case of a creditors' voluntary winding up of a company, the company must call a meeting of the creditors of the

company to be summoned for the day, or the next day following the day, on which the meeting of the members at

which the resolution for voluntary winding up is to be proposed is held. Notice of such meeting of creditors must be

sent at the same time as notice is sent to members. In addition, the company must cause a notice to appear in an

appointed newspaper on at least two occasions.

The creditors and the members at their respective meetings may nominate a person to be liquidator for the purposes

of winding up the affairs of the company and distributing the assets of the company, provided that if the creditors and


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the members nominate different persons, the person nominated by the creditors shall be the liquidator. If no person is

nominated by the creditors, the person (if any) nominated by the members shall be liquidator. The creditors at the

creditors' meeting may also appoint a committee of inspection consisting of not more than five persons.

If a creditors' voluntary winding up continues for more than one year, the liquidator is required to summon a general

meeting of the company and a meeting of the creditors at the end of each year and must lay before such meetings an

account of his acts and dealings and of the conduct of the winding up during the preceding year.

As soon as the affairs of the company are fully wound up via a creditors' voluntary winding up, the liquidator must

make up an account of the winding up, showing how the winding up has been conducted and the property of the

company has been disposed of, and thereupon call a general meeting of the company and a meeting of the creditors

for the purposes of laying the account before the meetings, and giving any explanation thereof. Each such meeting

shall be called by advertisement in an appointed newspaper, published at least one month before the meeting. Within

one week after the date of the meetings, or if the meetings are not held on the same date, after the date of the later

meeting, the liquidator is required to send to the Registrar of Companies in Bermuda a copy of the account and make

a return to him in accordance with the Bermuda Companies Act. The company will be deemed to be dissolved on the

expiration of three months from the registration by the Registrar of Companies in Bermuda of the account and the

return. However, a Bermuda court may, on the application of the liquidator or of some other person who appears to

the court to be interested, make an order deferring the date at which the dissolution of the company is to take effect

for such time as the court thinks fit.

14.11.15 Indemnification of Directors and officers

The directors, secretary and other officers shall be indemnified and secured harmless out of the assets of the Company

from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their heirs,

executors or administrators, shall or may incur or sustain by or by reason of any act done, concurred in or omitted in

or about the execution of their duty, or supposed duty, provided that this indemnity shall not extend to any matter in

respect of any fraud or dishonesty which may attach to any of the said persons. Section 98A of the Bermuda

Companies Act permits the Company to purchase and maintain insurance for the benefit of any officer or director in

respect of any loss or liability attaching to him in respect of any negligence, default, breach of duty or breach of trust,

whether or not we may otherwise indemnify such officer or director.

Under the Bye-laws, each shareholder agrees to waive any claim or right of action such shareholder might have,

whether individually or in the right of the Company, against any director or officer on account of any action taken by

such director or officer, or the failure of such director or officer to take any action in the performance of his duties with

or for the Company or any subsidiary thereof. Such waivers do not extend to any liability arising from any matter in

respect of any fraud or dishonesty in relation to the Company which may attach to such director or officer.

The Company may advance moneys to a director or officer for the costs, charges and expenses incurred by the

director or officer in defending any civil or criminal proceedings against him, on condition that the director or officer

shall repay the advance if any allegation of fraud or dishonesty is proved against him.

14.12 Shareholders' agreement

To the knowledge of the Company, there are no shareholders' agreements related to the Shares.


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15 SECURITIES TRADING IN NORWAY

Set out below is a summary of certain aspects of securities trading in Norway. The summary is based on the rules and

regulations in force in Norway as at the date of this Prospectus, which may be subject to changes occurring after such

date. The summary does not purport to be a comprehensive description of securities trading in Norway. Shareholders

who wish to clarify the aspects of securities trading in Norway should consult with and rely upon their own advisors.

15.1 Introduction

The Oslo Stock Exchange was established in 1819 and is the principal market in which shares, bonds and other

financial instruments are traded in Norway. As of 31 December 2015, the total capitalisation of companies listed on the

Oslo Stock Exchange amounted to approximately NOK 1,839 billion. Shareholdings of non-Norwegian investors as a

percentage of total market capitalization as at 31 December 2015 amounted to approximately 36.8%.

The Oslo Stock Exchange has entered into a strategic cooperation with the London Stock Exchange group with regards

to, inter alia, trading systems for equities, fixed income and derivatives.

15.2 Trading and settlement

Trading of equities on the Oslo Stock Exchange is carried out in the electronic trading system Millennium Exchange.

This trading system is in use by all markets operated by the London Stock Exchange, including the Borsa Italiana, as

well as by the Johannesburg Stock Exchange.

Official trading on the Oslo Stock Exchange takes place between 09:00 hours (CET) and 16:20 hours (CET) each

trading day, with pre-trade period between 08:15 hours (CET) and 09:00 hours (CET), closing auction from 16:20

hours (CET) to 16:25 hours (CET) and a post-trade period from 16:25 hours (CET) to 17:30 hours (CET). Reporting of

after exchange trades can be done until 17:30 hours (CET).

The settlement period for trading on the Oslo Stock Exchange is two trading days (T+2). This means that securities

will be settled on the investor's account in the VPS two days after the transaction, and that the seller will receive

payment after two days.

Oslo Clearing ASA, a wholly-owned subsidiary of SIX x-clear AG, a company in the SIX group, has a license from the

Norwegian FSA to act as a central clearing service, and has from 18 June 2010 offered clearing and counterparty

services for equity trading on the Oslo Stock Exchange.

Investment services in Norway may only be provided by Norwegian investment firms holding a license under the

Norwegian Securities Trading Act, branches of investment firms from an EEA member state or investment firms from

outside the EEA that have been licensed to operate in Norway. Investment firms in an EEA member state may also

provide cross-border investment services into Norway.

It is possible for investment firms to undertake market-making activities in shares listed in Norway if they have a

license to this effect under the Norwegian Securities Trading Act, or in the case of investment firms in an EEA member

state, a license to carry out market-making activities in their home jurisdiction. Such market-making activities will be

governed by the regulations of the Norwegian Securities Trading Act relating to brokers' trading for their own account.

However, such market-making activities do not as such require notification to the Norwegian FSA or the Oslo Stock

Exchange except for the general obligation of investment firms that are members of the Oslo Stock Exchange to report

all trades in stock exchange listed securities.

15.3 Information, control and surveillance

Under Norwegian law, the Oslo Stock Exchange is required to perform a number of surveillance and control functions.

The Surveillance and Corporate Control unit of the Oslo Stock Exchange monitors all market activity on a continuous

basis. Market surveillance systems are largely automated, promptly warning department personnel of abnormal

market developments.

The Norwegian FSA controls the issuance of securities in both the equity and bond markets in Norway and evaluates

whether the issuance documentation contains the required information and whether it would otherwise be unlawful to

carry out the issuance.

Under Norwegian law, a company that is listed on a Norwegian regulated market, or has applied for listing on such

market, must promptly release any inside information directly concerning the company. Inside information means


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precise information about financial instruments, the issuer thereof or other matters which are likely to have a

significant effect on the price of the relevant financial instruments or related financial instruments, and which are not

publicly available or commonly known in the market. A company may, however, delay the release of such information

in order not to prejudice its legitimate interests, provided that it is able to ensure the confidentiality of the information

and that the delayed release would not be likely to mislead the public. The Oslo Stock Exchange may levy fines on

companies violating these requirements.

15.4 The VPS and transfer of Shares

The share register of the Company is maintained at the registered office of the Company in Bermuda pursuant to the

provisions of the Bermuda Companies Act. The Company's register of beneficial interests in the Shares is operated

through the VPS. The VPS is the Norwegian paperless centralised securities register. It is a computerised book-keeping

system in which the ownership of, and all transactions relating to, shares traded on the Oslo Stock Exchange must be

recorded. The VPS and the Oslo Stock Exchange are both wholly-owned by Oslo Børs VPS Holding ASA.

All transactions relating to securities registered with the VPS are made through computerised book entries. No physical

share certificates are, or may be, issued. The VPS confirms each entry by sending a transcript to the registered owner

irrespective of any beneficial ownership. To give effect to such entries, the individual shareholder must establish a

share account with a Norwegian account agent. Norwegian banks, Norges Bank (being the Central Bank of Norway),

authorised securities brokers in Norway and Norwegian branches of credit institutions established within the EEA are

allowed to act as account agents.

The entry of a transaction in the VPS is prima facie evidence under Norwegian law in determining the legal rights of

parties as against the issuing company or any third party claiming an interest in the given security. A transferee or

assignee of shares may not exercise the rights of a shareholder with respect to such shares unless such transferee or

assignee has registered such shareholding or has reported and shown evidence of such share acquisition, and the

acquisition is not prevented by law, the relevant company's bye-laws or otherwise.

The VPS is liable for any loss suffered as a result of faulty registration or an amendment to, or deletion of, rights in

respect of registered securities unless the error is caused by matters outside the VPS' control which the VPS could not

reasonably be expected to avoid or overcome the consequences of. Damages payable by the VPS may, however, be

reduced in the event of contributory negligence by the aggrieved party.

The VPS must provide information to the Norwegian FSA on an ongoing basis, as well as any information that the

Norwegian FSA requests. Further, Norwegian tax authorities may require certain information from the VPS regarding

any individual's holdings of securities, including information about dividends and interest payments.

15.5 Shareholder register

The principal share register of the Company is maintained at the registered office of the Company in Bermuda

pursuant to the provisions of the Bermuda Companies Act. The beneficial interests in the Shares are registered in the

name of the beneficial owner of the Shares in the VPS. Shareholders may register their shares in the VPS in the name

of a nominee (bank or other nominee) approved by the Norwegian FSA. An approved and registered nominee has a

duty to provide information on demand about beneficial shareholders to the Company and to the Norwegian

authorities. In case of registration by nominees, the registration in the VPS must show that the registered owner is a

nominee. A registered nominee has the right to receive dividends and other distributions, but cannot vote in general

meetings on behalf of the beneficial owners.

15.6 Foreign investment in shares listed in Norway

Foreign investors may trade shares listed on the Oslo Stock Exchange through any broker that is a member of the Oslo

Stock Exchange, whether Norwegian or foreign.

15.7 Disclosure obligations

If a person's, entity's or consolidated group's proportion of the total issued shares and/or rights to shares in a

company listed on a regulated market in Norway (with Norway as its home state, which will be the case for the

Company) reaches, exceeds or falls below the respective thresholds of 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3 or

90% of the share capital or the voting rights of that company, the person, entity or group in question has an obligation

under the Norwegian Securities Trading Act to notify the Oslo Stock Exchange and the issuer immediately. The same

applies if the disclosure thresholds are passed due to other circumstances, such as a change in the company's share

capital.


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15.8 Insider trading

According to Norwegian law, subscription for, purchase, sale or exchange of financial instruments that are listed, or

subject to the application for listing, on a Norwegian regulated market, or incitement to such dispositions, must not be

undertaken by anyone who has inside information, as defined in Section 3-2 of the Norwegian Securities Trading Act.

The same applies to the entry into, purchase, sale or exchange of options or futures/forward contracts or equivalent

rights whose value is connected to such financial instruments or incitement to such dispositions.

15.9 Mandatory offer requirement

The Norwegian Securities Trading Act requires any person, entity or consolidated group that becomes the owner of

shares representing more than one-third of the voting rights of a company listed on a Norwegian regulated market

(with the exception of certain foreign companies not including the Company) to, within four weeks, make an

unconditional general offer for the purchase of the remaining shares in that company. A mandatory offer obligation

may also be triggered where a party acquires the right to become the owner of shares that, together with the party's

own shareholding, represent more than one-third of the voting rights in the company and the Oslo Stock Exchange

decides that this is regarded as an effective acquisition of the shares in question.

The mandatory offer obligation ceases to apply if the person, entity or consolidated group sells the portion of the

shares that exceeds the relevant threshold within four weeks of the date on which the mandatory offer obligation was

triggered.

When a mandatory offer obligation is triggered, the person subject to the obligation is required to immediately notify

the Oslo Stock Exchange and the company in question accordingly. The notification is required to state whether an

offer will be made to acquire the remaining shares in the company or whether a sale will take place. As a rule, a

notification to the effect that an offer will be made cannot be retracted. The offer and the offer document required are

subject to approval by the Oslo Stock Exchange before the offer is submitted to the shareholders or made public.

The offer price per share must be at least as high as the highest price paid or agreed by the offeror for the shares in

the six-month period prior to the date the threshold was exceeded. If the acquirer acquires or agrees to acquire

additional shares at a higher price prior to the expiration of the mandatory offer period, the acquirer is obliged to

restate its offer at such higher price. A mandatory offer must be in cash or contain a cash alternative at least

equivalent to any other consideration offered.

In case of failure to make a mandatory offer or to sell the portion of the shares that exceeds the relevant threshold

within four weeks, the Oslo Stock Exchange may force the acquirer to sell the shares exceeding the threshold by public

auction. Moreover, a shareholder who fails to make an offer may not, as long as the mandatory offer obligation

remains in force, exercise rights in the company, such as voting in a general meeting, without the consent of a

majority of the remaining shareholders. The shareholder may, however, exercise his/her/its rights to dividends and

pre-emption rights in the event of a share capital increase. If the shareholder neglects his/her/its duty to make a

mandatory offer, the Oslo Stock Exchange may impose a cumulative daily fine that runs until the circumstance has

been rectified.

Any person, entity or consolidated group that owns shares representing more than one-third of the votes in a company

listed on a Norwegian regulated market (with the exception of certain foreign companies not including the Company) is

obliged to make an offer to purchase the remaining shares of the company (repeated offer obligation) if the person,

entity or consolidated group through acquisition becomes the owner of shares representing 40%, or more of the votes

in the company. The same applies correspondingly if the person, entity or consolidated group through acquisition

becomes the owner of shares representing 50% or more of the votes in the company. The mandatory offer obligation

ceases to apply if the person, entity or consolidated group sells the portion of the shares which exceeds the relevant

threshold within four weeks of the date on which the mandatory offer obligation was triggered.

Any person, entity or consolidated group that has passed any of the above mentioned thresholds in such a way as not

to trigger the mandatory bid obligation, and has therefore not previously made an offer for the remaining shares in the

company in accordance with the mandatory offer rules is, as a main rule, obliged to make a mandatory offer in the

event of a subsequent acquisition of shares in the company.

15.10 Compulsory acquisition

Under Bermuda law, an acquiring party is generally able to compulsorily acquire the common shares of minority

holders in the following ways:


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By a procedure under the Bermuda Companies Act known as a "scheme of arrangement". A scheme of

arrangement can be effected by obtaining the agreement of the company and of holders of common shares,

representing in the aggregate a majority in number and at least 75% in value of the common shareholders

present and voting at a court ordered meeting held to consider the scheme of arrangement. The Bermuda

Supreme Court must then sanction the scheme of arrangement. If a scheme of arrangement receives all

necessary agreements and sanctions, then upon the filing of the court order with the Bermuda Registrar of

Companies, all holders of common shares could be compelled to sell their shares under the terms of the

scheme of arrangement.

If the acquiring party is a company, by acquiring pursuant to a tender offer 90% of the shares or class of

shares that are not already owned by, or held by a nominee for or on behalf of that acquiring party, or any

of its subsidiaries (the offeror). If within four months after the making of an offer for all the shares or class

of shares not owned by, or by a nominee for, the offeror, or any of its subsidiaries, the offeror obtains the

approval of the holders of 90% or more of all the shares to which the offer relates, the offeror may, at any

time within two months beginning with the date on which the approval was obtained, require by notice any

non-tendering shareholder to transfer its shares to the offeror on the same terms as the original offer. In

those circumstances, non-tendering shareholders will be compelled to sell their shares unless the Bermuda

Supreme Court (on application made within a one-month period from the date of the offeror's notice of its

intention to acquire such shares) orders otherwise.

Where the acquiring party or parties hold not less than 95% of the shares or a class of shares of the

company, the acquiring party or parties may, pursuant to a notice given to the remaining shareholders or

class of shareholders, acquire the shares of such remaining shareholders or class of shareholders. When

such notice is given, the acquiring party is entitled and bound to acquire the shares of the remaining

shareholders on the terms set out in the notice, unless a remaining shareholder, within one month of

receiving such notice, applies to the Bermuda Supreme Court for an appraisal of the value of their shares.

This provision only applies where the acquiring party offers the same terms to all holders of shares whose

shares are being acquired.

15.11 Foreign exchange controls

There are currently no foreign exchange control restrictions in Norway that would potentially restrict the payment of

dividends to a shareholder outside Norway, and there are currently no restrictions that would affect the right of

shareholders of a company that has its shares registered with the VPS who are not residents in Norway to dispose of

their shares and receive the proceeds from a disposal outside Norway. There is no maximum transferable amount

either to or from Norway, although transferring banks are required to submit reports on foreign currency exchange

transactions into and out of Norway into a central data register maintained by the Norwegian customs and excise

authorities. The Norwegian police, tax authorities, customs and excise authorities, the National Insurance

Administration and the Norwegian FSA have electronic access to the data in this register.

The Bermuda Monetary Authority has given its consent for the issue and free transferability of shares of the Company

to and between residents and non-residents of Bermuda for exchange control purposes provided that shares of the

Company are listed on an Appointed Stock Exchange, which includes the Oslo Stock Exchange. Approvals or

permissions given by the Bermuda Monetary Authority do not constitute a guarantee by the Bermuda Monetary

Authority as to the Company's performance or its creditworthiness. Accordingly, in giving such consent or permissions,

the Bermuda Monetary Authority shall not be liable for the financial soundness, performance or default of the

Company's business or for the correctness of any opinions or statements expressed in this Prospectus.

The Company has been designated by the Bermuda Monetary Authority as a non-resident for Bermuda exchange

control purposes. This designation allows the Company to engage in transactions in currencies other than the Bermuda

dollar, and there are no restrictions on the Company's ability to transfer funds (other than funds denominated in

Bermuda dollars) in and out of Bermuda or to pay dividends to non-residents who are holders of Shares.


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16 TAXATION

Set out below is a summary of certain Bermuda and Norwegian tax matters related to an investment in the Company.

The summary regarding Bermuda and Norwegian taxation are based on the laws in force in Bermuda and Norway as of

the date of this Prospectus, which may be subject to any changes in law occurring after such date. Such changes could

possibly be made on a retrospective basis. Please note that the Norwegian Ministry of Finance has recently proposed

certain amendments to Norwegian tax legislation. The proposed amendments which may be relevant to a decision to

invest in the Company are further described in Section 16.2 "Norwegian taxation" below. If the proposals are adopted

by the Norwegian Parliament, the amendments will be effective as at 1 January 2016.

The following summary does not purport to be a comprehensive description of all the tax considerations that may be

relevant to a decision to purchase, own or dispose of the shares in the Company. Shareholders who wish to clarify

their own tax situation should consult with and rely upon their own tax advisors. Shareholders resident in jurisdictions

other than Norway and shareholders who cease to be resident in Norway for tax purposes (due to domestic tax law or

tax treaty) should specifically consult with and rely upon their own tax advisors with respect to the tax position in their

country of residence and the tax consequences related to ceasing to be resident in Norway for tax purposes.

Please note that for the purpose of the summary below, a reference to a Norwegian or non-Norwegian shareholder

refers to the tax residency rather than the nationality of the shareholder.

16.1 Bermuda taxation

16.1.1 General

At present, there is no Bermuda income or profits tax, withholding tax, capital gains tax, capital transfer tax, estate

duty or inheritance tax payable by the Company or by its shareholders in respect of the Shares. The Company has

obtained an assurance from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act

1966 that, in the event that any legislation is enacted in Bermuda imposing any tax computed on profits or income, or

computed on any capital asset, gain or appreciation or any tax in the nature of estate duty or inheritance tax, such tax

shall not, until 31 March 2035, be applicable to the Company or to any of the Company's operations or to its shares,

debentures or other obligations except insofar as such tax applies to persons ordinarily resident in Bermuda or is

payable by the Company in respect of real property owned or leased by the Company in Bermuda.

16.2 Norwegian taxation

16.2.1 Taxation of dividends

Norwegian Personal Shareholders

Dividends distributed to shareholders who are individuals resident in Norway for tax purposes ("Norwegian Personal

Shareholders") are taxable in Norway for such shareholders currently at an effective tax rate of 28.75% to the extent

the dividend exceeds a tax-free allowance; i.e. dividends received, less the tax free allowance, shall be multiplied by

1.15 which are then included as ordinary income taxable at a flat rate of 25%, increasing the effective tax rate on

dividends received by Norwegian Personal Shareholders to 28.75%.

The allowance is calculated on a share-by-share basis. The allowance for each share is equal to the cost price of the

share multiplied by a risk free interest rate based on the effective rate after tax of interest on treasury bills (Nw.:

statskasseveksler) with three months' maturity. The allowance is calculated for each calendar year, and is allocated

solely to Norwegian Personal Shareholders holding shares at the expiration of the relevant calendar year. The

allowance is calculated and announced by the Directorate for Taxes in January the year after the relevant income year.

Norwegian Personal Shareholders who transfer shares will thus not be entitled to deduct any calculated allowance

related to the year of transfer. Any part of the calculated allowance one year exceeding the dividend distributed on the

share ("excess allowance") may be carried forward and set off against future dividends received on, or gains upon

realisation of, the same share. Any excess allowance will also be included in the basis for calculating the allowance on

the same share in the following years.

On 6 October 2016, the Norwegian Government proposed to reduce the tax rate on ordinary income from 25% to 24%

as of 1 January 2017. In order to compensate for some of this reduction, it is also proposed that the taxation of

dividends received by Norwegian Personal Shareholders is increased as of 1 January 2017. According to the proposal,

the received dividend shall be multiplied by 1.24, which will then be taxed at the rate of 24%, increasing the effective

tax rate on dividends from 28.75% to 29.76%.


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Norwegian Corporate Shareholders

Dividends distributed by the Company to shareholders who are limited liability companies (and certain similar entities)

resident in Norway for tax purposes ("Norwegian Corporate Shareholders"), are taxable as ordinary income in

Norway for such shareholders at a flat rate of currently 25%, which has been proposed to be reduced to 24% starting

as of 1 January 2017.

Non-Norwegian Shareholders

As a general rule, dividends received by Non-Norwegian tax resident shareholders from shares in Non-Norwegian

companies are not subject to Norwegian taxation unless the Non-Norwegian shareholder holds the shares in

connection with the conduct of a trade or business in Norway.

16.2.2 Taxation of capital gains on realisation of shares

Norwegian Personal Shareholders

Sale, redemption or other disposal of shares is considered a realisation for Norwegian tax purposes. A capital gain or

loss generated by a Norwegian Personal Shareholder through a disposal of shares is taxable or tax deductible in

Norway. The effective tax rate on gain or loss related to shares realised by Norwegian Personal Shareholders is

currently 28.75%; i.e. capital gains (less the tax free allowance) and losses shall be multiplied by 1.15 which are then

included in or deducted from the Norwegian Personal Shareholder's ordinary income in the year of disposal. Ordinary

income is taxable at a flat rate of 25%, increasing the effective tax rate on gains/losses realised by Norwegian

Personal Shareholders to 28.75%. Please note that the Norwegian Government has proposed to increase the effective

tax rate on capital gains realised by Norwegian Personal Shareholder from 28.75% to 29.76%, cf. Section 16.2.1

“Taxation of Dividends – Norwegian Personal Shareholders” above. If the proposal is adopted by the Norwegian

Parliament, the amendments will be effective as of 1 January 2017.

The gain is subject to tax and the loss is tax deductible irrespective of the duration of the ownership and the number

of shares disposed of.

The taxable gain/deductible loss is calculated per share as the difference between the consideration for the share and

the Norwegian Personal Shareholder's cost price of the share, including costs incurred in relation to the acquisition or

realisation of the share. From this capital gain, Norwegian Personal Shareholders are entitled to deduct a calculated

allowance provided that such allowance has not already been used to reduce taxable dividend income. Please refer to

"Taxation of dividends — Norwegian Personal Shareholders" above for a description of the calculation of the allowance.

The allowance may only be deducted in order to reduce a taxable gain, and cannot increase or produce a deductible

loss, i.e. any unused allowance exceeding the capital gain upon the realisation of a share will be annulled.

If the Norwegian Personal Shareholder owns shares acquired at different points in time, the shares that were acquired

first will be regarded as the first to be disposed of, on a first-in first-out basis.

Norwegian Corporate Shareholders

A capital gain or loss derived by a Norwegian Corporate Shareholder from a disposal of shares in the Company is

taxable or tax deductible in Norway. The taxable gain/deductible loss per share is calculated as the difference between

the consideration for the share and the Norwegian Corporate Shareholder's cost price of the share, including costs

incurred in relation to the acquisition or disposal of the share. Such capital gain or loss is included in or deducted from

the basis for computation of ordinary income in the year of disposal. Ordinary income is taxable at a rate of currently

25% (which has been proposed to be reduced to 24% starting as of 1 January 2017). The gain is subject to tax and

the loss is tax deductible irrespective of the duration of the ownership and the number of shares disposed of.

If the Norwegian Corporate Shareholder owns shares acquired at different points in time, the shares that were

acquired first will be regarded as the first to be disposed of, on a first-in first-out basis.

Non-Norwegian Shareholders

As a general rule, capital gains generated by Non-Norwegian tax resident Shareholders are not taxable in Norway

unless the Non-Norwegian Shareholder holds the shares in connection with the conduct of a trade or business in

Norway.


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16.2.3 Taxation of subscription rights

A subscription for shares pursuant to a subscription right is not subject to taxation in Norway. Costs related to the

subscription for the shares will be added to the cost price of the shares for Norwegian Shareholders (both personal and

corporate shareholders) and Non-Norwegian Shareholders holding the subscription right in connection with the conduct

of a trade or business in Norway.

16.2.4 Net wealth tax

The value of shares is included in the basis for the computation of net wealth tax imposed on Norwegian Personal

Shareholders. Currently, the marginal net wealth tax rate is 0.85% of the value assessed. The value for assessment

purposes for listed shares is equal to the listed value as of 1 January in the year of assessment (i.e. the year following

the relevant fiscal year). Please note that the Norwegian Government has proposed that only 90% of the listed value

of the shares is included in the basis for the computation of net wealth tax imposed on Norwegian Personal

Shareholders. It is further proposed that the value for assessment purposes for debt allocated to the investment shall

be reduced correspondingly. If the proposals are adopted by the Norwegian Parliament, the amendments will be

effective as of 1 January 2017.

Norwegian Corporate Shareholders are not subject to net wealth tax.

Shareholders not resident in Norway for tax purposes are not subject to Norwegian net wealth tax. Non-Norwegian

Personal Shareholders can, however, be taxable if the shareholding is effectively connected to the conduct of trade or

business in Norway.

16.2.5 VAT and transfer taxes

No VAT, stamp or similar duties are currently imposed in Norway on the transfer or issuance of shares.

16.2.6 Inheritance tax

A transfer of shares through inheritance or as a gift does not give rise to inheritance or gift tax in Norway.


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17 THE COMPLETED PRIVATE PLACEMENT AND THE TERMS OF THE SUBSEQUENT OFFERING

17.1 The completed Private Placement

17.1.1 Overview

On 20 October 2016, the Board of Directors resolved to complete the Private Placement by issuance of 26,750,000

Private Placement Shares, at a subscription price of NOK 17.00 per Private Placement Share, resulting in gross

proceeds of approximately NOK 454.8 million (approximately USD 55.3 million as exchanged to USD by the Company),

directed towards investors in Norway and other jurisdictions subject to applicable exemptions from registration, filing,

prospectus and other requirements under applicable securities laws, (i) outside the United States in reliance on

Regulation S under the U.S. Securities Act and (ii) in the United States to QIBs, as defined in Rule 144A under the U.S.

Securities Act or to major U.S. institutional investors under SEC Rule 15a-6 to the U.S. Exchange Act.

The Company and the Managers discussed the potential Private Placement with larger shareholders prior to

announcing the contemplated transaction on 20 October 2016 in order to determine whether to launch the transaction

and also to determine the terms of the transaction, taking into account the equity condition in the Amendment

Agreements as further described in Section 11.8.2 "The Bank Debt Amendments". In consultation with the Managers,

the Board of Directors assessed various alternatives to secure the equity required to fulfil the condition in the

Amendment Agreements, and resolved, based on an overall assessment, to carry out the Private Placement and the

Subsequent Offering. The subscription price of NOK 17.00 per Private Placement Share was set through an accelerated

bookbuilding process. The minimum subscription and allocation amount in the Private Placement was set to the NOK

equivalent of EUR 100,000.

The Private Placement Shares issued in the Private Placement were placed by the Managers to selected investors in

the application period from 16:30 hours (CET) on 20 October 2016 to 18:00 hours (CET) on 20 October 2016, and the

Company and the Managers entered into application agreements with the investors pursuant to which the investors

undertook to subscribe for the Private Placement Shares.

The successful bookbuilding of the Private Placement was announced through a stock exchange announcement on 21

October 2016.

17.1.2 Participation of major existing shareholders and members of the Company's Management, supervisory and

administrative bodies

The following major existing shareholders and members of the Company's Management, supervisory or administrative

bodies subscribed for, and were allocated, Private Placement Shares in the Private Placement:

Stolt-Nielsen Gas Limited (3,000,000 Private Placement Shares);

Sungas Holdings Ltd (3,000,000 Private Placement Shares); and

Hemen Holding Limited (3,000,000 Private Placement Shares).

17.1.3 Delivery and listing of the Private Placement Shares

Beneficial interests in the Private Placement Shares were delivered in book-entry form with the VPS on 25 October

2016 to investors having subscribed for the shares, while the Private Placement Shares are registered in the name of

DNB Bank ASA in the register of members of the Company in Bermuda, see Section 14.6 "VPS Registration of the

Shares".

The Private Placement Shares have, from the date they were issued and until the date of this Prospectus, been

registered with ISIN BMG067231115, which is different from the ISIN number of the existing Shares, thus ensuring

that the Private Placement Shares cannot be traded on the Oslo Stock Exchange. The Private Placement Shares will

assume the ISIN number of the Company's existing Shares, being ISIN BMG067231032, and will be listed and

admitted to trading on the Oslo Stock Exchange following publication of this Prospectus.

17.1.4 The rights conferred by the Private Placement Shares

The Private Placement Shares are issued in accordance with Bermuda law and the Bermuda Companies Act. The

Private Placement Shares will in all respects rank pari passu with all other Shares in issue, and will be eligible for any

dividend that the Company may declare on the Shares. For a description of rights attached to the Shares, see Section

14 "Corporate information and description of the share capital".


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17.1.5 Dilution

The Private Placement resulted in an immediate dilution of the existing Shares of approximately 43.1%.

17.1.6 Net proceeds and expenses related to the Private Placement

The estimated fees and expenses relate to the Private Placement amounts to approximately USD 1.35 million based on

a USD/NOK exchange rate of 8.2, of which approximately USD 1.14 million are fees to the Managers (assuming that

the discretionary fee described below is paid in full) and approximately USD 0.21 million are other fees, costs and

expenses. No expenses or taxes was charged by the Company or the Managers to the subscribers in the Private

Placement.

The fees to the Managers in connection with the Private Placement comprise (i) a discretionary fee in the amount of up

to approximately USD 0.69 million to be determined by the Company in its sole discretion based on its assessment of

the Private Placement, to be allocated between the Managers by the Company in its sole discretion, but unless

otherwise decided by the Company, each Joint Bookrunner will be entitled to 20% of the discretionary fee and each

Joint Manager will be entitled to 6.667% of the discretionary fee and (ii) a fee of USD 0.45 million to Danske Bank for

corporate finance advisory services.

Total net proceeds from the Private Placement are estimated to approximately USD 54.0 million. For a description of

the use of such proceeds, see Section 6 "Reasons for the Private Placement and the Subsequent Offering".

17.1.7 Interest of natural and legal persons involved in the Private Placement

The Managers or their affiliates have provided from time to time, and may provide in the future, investment and

commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may

have received and may continue to receive customary fees and commissions. The Managers, their employees and any

affiliate may currently own Shares in the Company. Furthermore, the Managers will receive fees in connection with the

Private Placement and, as such, have an interest in the Private Placement. See Section 17.1.6 "Expenses related to the

Private Placement" for information on fees to the Managers in connection with the Private Placement.

17.2 The Subsequent Offering

17.2.1 Overview

The Subsequent Offering consists of an offer by the Company to issue up to 2,500,000 Offer Shares at a Subscription

Price of NOK 17.00 per Offer Share, thereby raising gross proceeds of up to NOK 42.5 million (approximately USD 5.2

million based on a USD/NOK exchange rate of 8.2).

Eligible Shareholders will be granted non-transferable Subscription Rights that, subject to certain limitations based on

applicable laws and regulations, provide preferential rights to subscribe for, and be allocated, Offer Shares at the

Subscription Price in the Subsequent Offering. Over-subscription will be permitted; however, there can be no

assurance that Offer Shares will be allocated for such subscriptions. Subscription without Subscription Rights is not

permitted.

The Offer Shares allocated in the Subsequent Offering are expected to be traded on the Oslo Stock Exchange from and

including 18 November 2016.

The Subscription Rights and the Offer Shares have not been, and will not be, registered under the U.S. Securities Act

or with any securities regulatory authority of any state or other jurisdiction in the United States, and are being offered

and sold: (A) (i) in the United States only to QIBs as defined in Rule 144A pursuant to transactions exempt from, or

not subject to, the registration requirements of the U.S. Securities Act; and (ii) outside the United States in "offshore

transactions" as defined in, and in compliance with, Regulation S and (B) on exemptions provided by the Prospectus

Directive in a Relevant Member State in each case, in compliance with any applicable laws and regulations.

This Prospectus does not constitute an offer of, or an invitation to purchase or subscribe, the Offer Shares in any

jurisdiction in which such offer or sale would be unlawful. For further details, see "Important information" and Section

18 "Selling and transfer restrictions".

17.2.2 Use of proceeds

The net proceeds from the Subsequent Offering are expected to be USD 5.0 million assuming all Offer Shares are

issued and a USD/NOK exchange rate of 8.2. The net proceeds, if any, will be used for general corporate purposes and

to further increase the Company’s financial buffer as the Company prepares for a prolonged market downturn. The


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Company has, as discussed in Section 11.8.2.1 "Amendments to bank debt", agreed to restrictions on investments and

dividends as part of the Amendment Agreements and it is therefore expected that the net proceeds, if any, will be

retained in cash by the Company.

17.2.3 Resolution to issue the Offer Shares

Following the end of the Subscription Period, the Board of Directors will on or about 11 November 2016 approve the

completion of the Subsequent Offering, including the allocation and issuance of the Offer Shares. The Offer Shares are

expected to be issued on or about 17 November 2016.

17.2.4 Timetable

The timetable set out below provides certain indicative key dates for the Subsequent Offering:

Last day of trading in the Shares including Subscription Rights 20 October 2016

First day of trading in the Shares excluding Subscription Rights 21 October 2016

Record Date 24 October 2016

Subscription Period commences 27 October 2016

Subscription Period ends 10 November 2016 at 16:30 hours (CET)

Allocation of the Offer Shares Expected on or about 11 November 2016

Distribution of allocation letters Expected on or about 11 November 2016

Payment Date Expected on or about 16 November 2016

Delivery of the Offer Shares Expected on or about 17 November 2016

Listing and commencement of trading in the Offer Shares on the Oslo Stock Exchange Expected on or about 18 November 2016

17.2.5 Subscription Price

The Subscription Price in the Subsequent Offering is NOK 17.00 per Offer Share, which is the same subscription price

as in the Private Placement.

17.2.6 Subscription Period

The Subscription Period will commence at 09:00 hours (CET) on 27 October 2016 and end at 16:30 hours (CET) on 10

November 2016. The Subscription Period may not be shortened or extended, unless required by law.

17.2.7 Record Date for Eligible Shareholders

Eligible Shareholders who are registered in the Company's shareholder register in the VPS as of the Record Date (24

October 2016) will receive Subscription Rights.

Provided that the delivery of traded Shares was made with ordinary T+2 settlement in the VPS, Shares that were

acquired until and including 20 October 2016 will give the right to receive Subscription Rights, whereas Shares that

were acquired from and including 21 October 2016 will not give the right to receive Subscription Rights.

17.2.8 Subscription Rights

Eligible Shareholders will be granted Subscription Rights giving, subject to certain limitations based on applicable laws

and regulations, a preferential right to subscribe for, and be allocated, Offer Shares in the Subsequent Offering. Each

Eligible Shareholder will be granted 0.2385 Subscription Rights for every existing Share registered as held by such

Eligible Shareholder on the Record Date. The number of Subscription Rights granted to each Eligible Shareholder will

be rounded down to the nearest whole Subscription Right. Each Subscription Right will, subject to certain limitations

based on applicable laws and regulations, give the right to subscribe for, and be allocated, one Offer Share in the

Subsequent Offering. Subscription Rights will not be issued in respect of any existing Shares held in treasury by the

Company.

The Subscription Rights will be credited to and registered on each Eligible Shareholder's VPS account on or about 27

October 2016 under ISIN BMG067231297. The Subscription Rights will be distributed free of charge to Eligible

Shareholders.

The Subscription Rights may be used to subscribe for Offer Shares in the Subsequent Offering before the expiry of the

Subscription Period at 16:30 hours (CET) on 10 November 2016.

The Subscription Rights must be used to subscribe for Offer Shares before the end of the Subscription

Period (i.e. on 10 November 2016 at 16:30 hours (CET)). Subscription Rights that are not exercised before

10 November 2016 at 16:30 hours (CET) will have no value and will lapse without compensation to the


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holder. Holders of Subscription Rights should note that subscriptions for Offer Shares must be made in

accordance with the procedures set out in this Prospectus.

Subscription Rights of Eligible Shareholders resident in jurisdictions where the Prospectus may not be distributed

and/or with legislation that, according to the Company's assessment, prohibits or otherwise restricts subscription for

Offer Shares and Eligible Shareholders located in the United States who the Company does not reasonably believe to

be a QIB (the "Ineligible Shareholders") will initially be credited to such Ineligible Shareholders' VPS accounts. Such

credit specifically does not constitute an offer to Ineligible Shareholders. The Company will instruct the Managers to,

as far as possible, withdraw the Subscription Rights from such Ineligible Shareholders' VPS accounts with no

compensation to the holder.

17.2.9 Subscription procedures

Subscriptions for Offer Shares must be made by submitting a correctly completed subscription form (the

"Subscription Form") to one of the subscription offices (the "Subscription Offices") listed below during the

Subscription Period, or may, for subscribers who are residents of Norway with a Norwegian personal identification

number, be made online as further described below.

Correctly completed Subscription Forms must be received by the Subscription Offices at the following addresses or e-

mail addresses by, or in the case of online subscriptions be registered by, no later than 16:30 hours (CET) on 10

November 2016:

Danske Bank DNB Markets, Registrars Department Nordea Markets, Issuer Services

Bryggetorget 4 Dronning Eufemias gate 30 Essendropsgate 7

P.O. Box 1170 Sentrum P.O. Box 1600 Sentrum P.O. Box 1166 Sentrum

N-0107 Oslo N-0021 Oslo N-0107 Oslo

Norway Norway Norway

Tel: +47 85 40 55 00 Tel: +47 23 26 81 01 Tel: +47 24 01 34 62

E-mail: [email protected] E-mail: [email protected] E-mail: [email protected]

www.danskebank.no/avance www.dnb.no/emisjoner www.nordea.no/avance

SEB Swedbank Norge, Oppgjør Aksjer

Filipstad Brygge Filipstad Brygge 1

P.O. Box 1843 Vika P.O. Box 1441 Vika

N-0123 Oslo N-0115 Oslo

Norway Norway

Tel: +47 22 82 70 Tel: +47 04010

E-mail: [email protected] E-mail: [email protected]

www.seb.no www.swedbank.no

Subscribers who are Norwegian residents with a Norwegian personal identification number (Nw.:

personnummer) are encouraged to subscribe for Offer Shares through the VPS online subscription system

(or by following the link on www.danskebank.no/avance, www.dnb.no/emisjoner, www.nordea.no,

www.seb.no and www.swedbank.no which will redirect the subscriber to the VPS online subscription

system). The VPS online subscription system is only available for individual persons and is not available for legal

entities; legal entities must thus submit a Subscription Form in order to subscribe for Offer Shares.

None of the Company or the Managers may be held responsible for postal delays, unavailable fax lines, internet lines

or servers or other logistical or technical problems that may result in subscriptions not being received in time or at all

by the Subscription Offices. Subscription Forms received after the end of the Subscription Period and/or incomplete or

incorrect Subscription Forms and any subscription that may be unlawful may be disregarded at the sole discretion of

the Company and/or the Managers without notice to the subscriber.

Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or modified by the subscriber after

having been received by the Subscription Offices or, in the case of subscriptions through the VPS online subscription

system, upon registration of the subscription. The subscriber is responsible for the correctness of the information filled

into the Subscription Form or, in the case of subscriptions through the VPS online subscription system, the online

subscription registration. By signing and submitting a Subscription Form, or by registration of a subscription in the VPS

online subscription system, the subscribers confirm and warrant that they have read this Prospectus and are eligible to

subscribe for Offer Shares under the terms set forth herein.


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There is no minimum subscription amount for which subscriptions in the Subsequent Offering must be made. Over-

subscription (i.e. subscription for more Offer Shares than the number of Subscription Rights held by the subscriber

entitles the subscriber to be allocated) will be permitted. However, in each case, there can be no assurance that Offer

Shares will be allocated for such subscriptions. Subscription without Subscription Rights is not permitted.

Multiple subscriptions (i.e. subscriptions on more than one Subscription Form) are allowed. Note, however, that two

separate Subscription Forms submitted by the same subscriber with the same number of Offer Shares subscribed for

on both Subscription Forms will only be counted once unless otherwise explicitly stated in one of the Subscription

Forms. In the case of multiple subscriptions through the VPS online subscription system or subscriptions made both on

a Subscription Form and through the VPS online subscription system, all subscriptions will be counted.

All subscriptions in the Subsequent Offering will be treated in the same manner regardless of which of the above

Subscription Offices the subscriptions are place with. Furthermore, all subscriptions will be treated in the same manner

regardless of whether they are made by delivery of a Subscription Form to the Subscription Offices or through the VPS

online subscription system.

17.2.10 Mandatory anti-money laundering procedures

The Subsequent Offering is subject to applicable anti-money laundering legislation, including the Norwegian Money

Laundering Act of 6 March 2009 no. 11 and the Norwegian Money Laundering Regulations of 13 March 2009 no. 302

(collectively, the "Anti-Money Laundering Legislation").

Subscribers who are not registered as existing customers of the Managers must verify their identity to the Managers in

accordance with the requirements of the Anti-Money Laundering Legislation, unless an exemption is available.

Subscribers who have designated an existing Norwegian bank account and an existing VPS account on the Subscription

Form, or when registering a subscription through the VPS online subscription system, are exempted, unless

verification of identity is requested by the Managers. Subscribers who have not completed the required verification of

identity prior to the expiry of the Subscription Period may not be allocated Offer Shares.

Furthermore, participation in the Subsequent Offering is conditional upon the subscriber holding a VPS account. The

VPS account number must be stated on the Subscription Form or when registering a subscription through the VPS

online subscription system. VPS accounts can be established with authorised VPS registrars, which can be Norwegian

banks, authorised investment firms in Norway and Norwegian branches of credit institutions established within the

EEA. However, investors may use nominee VPS accounts registered in the name of a nominee. The nominee must be

authorised by the Norwegian Ministry of Finance. Establishment of VPS accounts requires verification of identification

by the relevant VPS registrar in accordance with the Anti-Money Laundering Legislation.

17.2.11 Financial intermediaries

17.2.11.1 General

All persons or entities holding Shares or Subscription Rights through financial intermediaries (i.e. brokers, custodians

and nominees) should read this Section 17.2.11 "Financial intermediaries". All questions concerning the timeliness,

validity and form of instructions to a financial intermediary in relation to the exercise, sale or purchase of Subscription

Rights should be determined by the financial intermediary in accordance with its usual customer relations procedure or

as it otherwise notifies each beneficial shareholder. Neither the Company nor any of the Managers is liable for any

action or failure to act by a financial intermediary through which Shares are held.

17.2.11.2 Subscription Rights

If an Eligible Shareholder holds Shares registered through a financial intermediary on the Record Date, the financial

intermediary will customarily give the Eligible Shareholder details of the aggregate number of Subscription Rights to

which it will be entitled. The relevant financial intermediary will customarily supply each Eligible Shareholder with this

information in accordance with its usual customer relations procedures. Eligible Shareholders holding Shares through a

financial intermediary should contact the financial intermediary if they have received no information with respect to

the Subsequent Offering.

Eligible Shareholders who hold their Shares through a financial intermediary and who are Ineligible Shareholders will

not be entitled to exercise their Subscription Rights.

17.2.11.3 Subscription Period

The time by which notification of exercise instructions for subscription of Offer Shares must validly be given to a


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financial intermediary may be earlier than the expiry of the Subscription Period. Such deadlines will depend on the

financial intermediary. Eligible Shareholders who hold their Shares through a financial intermediary should contact

their financial intermediary if they are in any doubt with respect to deadlines.

17.2.11.4 Subscription

Any Eligible Shareholder who is not an Ineligible Shareholder and who holds its Subscription Rights through a financial

intermediary and wishes to exercise its Subscription Rights, should instruct its financial intermediary in accordance

with the instructions received from such financial intermediary. The financial intermediary will be responsible for

collecting exercise instructions from the Eligible Shareholders and for informing the Subscription Offices of their

exercise instructions.

See Section 18 "Selling and transfer restrictions" below for a description of certain restrictions and prohibitions

applicable to the exercise of Subscription Rights in certain jurisdictions.

17.2.11.5 Method of payment

Any Eligible Shareholder who holds its Subscription Rights through a financial intermediary should pay the Subscription

Price for the Offer Shares that are allocated to it in accordance with the instructions received from the financial

intermediary. The financial intermediary must pay the Subscription Price in accordance with the instructions in the

Prospectus. Payment by the financial intermediary for the Offer Shares must be made to one of the Managers no later

than the Payment Date. Accordingly, financial intermediaries may require payment to be provided to them prior to the

Payment Date.

17.2.12 Allocation of Offer Shares

Allocation of the Offer Shares will take place on or about 11 November 2016 in accordance with the following criteria:

(i) Allocation of Offer Shares to subscribers will be made in accordance with granted Subscription Rights which

have been validly exercised during the Subscription Period. Each Subscription Right will give the right to

subscribe for, and be allocated, one Offer Share in the Subsequent Offering.

(ii) If not all Subscription Rights are validly exercised during the Subscription Period, subscribers having

exercised their Subscription Rights and who have over-subscribed will be allocated additional Offer Shares

on a pro rata basis based on the number of Subscription Rights exercised by each such subscriber. To the

extent that pro rata allocation is not possible, the Company will determine the allocation by the drawing of

lots.

No fractional Offer Shares will be allocated. The Company reserves the right to round off, reject or reduce any

subscription for Offer Shares not covered by Subscription Rights. Allocation of fewer Offer Shares than subscribed for

by a subscriber will not impact on the subscriber's obligation to pay for the number of Offer Shares allocated.

The result of the Subsequent Offering is expected to be published on or about 11 November 2016 in the form of a

stock exchange announcement from the Company through the Oslo Stock Exchange's information system and at the

Company's website (www.avancegas.com). Notifications of allocated Offer Shares and the corresponding subscription

amount to be paid by each subscriber are expected to be distributed in a letter from the VPS on or about 11 November

2016. Subscribers having access to investor services through their VPS account manager will be able to check the

number of Offer Shares allocated to them from 12:00 hours (CET) on 11 November 2016. Subscribers who do not

have access to investor services through their VPS account manager may contact one of the Subscription Offices from

12:00 hours (CET) on 11 November 2016 to obtain information about the number of Offer Shares allocated to them.

17.2.13 Payment for the Offer Shares

The payment for Offer Shares allocated to a subscriber falls due on 16 November 2016 (the "Payment Date").

Payment must be made in accordance with the requirements set out in Sections 17.2.13.1 "Subscribers who have a

Norwegian bank account" or 17.2.13.2 "Subscribers who do not have a Norwegian bank account".

17.2.13.1 Subscribers who have a Norwegian bank account

Subscribers who have a Norwegian bank account must, and will by signing the Subscription Form, provide Danske

Bank (the "Settlement Agent"), or someone appointed by the Settlement Agent, with a one-time irrevocable

authorisation to debit a specified Norwegian bank account for the amount payable for the Offer Shares which are

allocated to the subscriber.


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The specified bank account is expected to be debited on or after the Payment Date. The Settlement Agent is only

authorised to debit such account once, but reserves the right to make up to three debit attempts, and the

authorisation will be valid for up to seven working days after the Payment Date.

The subscriber furthermore authorises the Settlement Agent to obtain confirmation from the subscriber's bank that the

subscriber has the right to dispose over the specified account and that there are sufficient funds in the account to

cover the payment.

If there are insufficient funds in a subscriber's bank account or if it for other reasons is impossible to debit such bank

account when a debit attempt is made pursuant to the authorisation from the subscriber, the subscriber's obligation to

pay for the Offer Shares will be deemed overdue.

Payment by direct debiting is a service that banks in Norway provide in cooperation. In the relationship between the

subscriber and the subscriber's bank, the standard terms and conditions for "Payment by Direct Debiting – Securities

Trading", which are set out on page 2 of the Subscription Form, will apply, provided, however, that subscribers who

subscribe for an amount exceeding NOK 5 million by signing the Subscription Form provide the Settlement Agent with

a one-time irrevocable authorisation to directly debit the specified bank account for the entire subscription amount.

17.2.13.2 Subscribers who do not have a Norwegian bank account

Subscribers who do not have a Norwegian bank account must ensure that payment with cleared funds for the Offer

Shares allocated to them is made on or before the Payment Date.

Prior to any such payment being made, the subscriber must contact the Settlement Agent (telephone number +47 85

40 55 00) for further details and instructions.

17.2.13.3 Overdue payments

Overdue payments will be charged with interest at the applicable rate from time to time under the Norwegian Act on

Interest on Overdue Payment of 17 December 1976 no. 100, currently 8.50% per annum as at the date of this

Prospectus. If a subscriber fails to comply with the terms of payment, the Offer Shares will, subject to the discretion of

the Company, not be delivered to such subscriber.

In order to enable timely issuance of the Offer Shares in the Subsequent Offering, the Company may enter into a

payment guarantee agreement with Danske Bank (the "Payment Guarantor") which may cover the entire, or a

portion of, the amount subscribed in the Subsequent Offering. Pursuant to such payment guarantee agreement, if

entered into, the Payment Guarantor will pay any subscription amounts not paid by subscribers when due, limited

upwards to the guaranteed amount. The non-paying subscribers will remain fully liable for the subscription amount

payable for the Offer Shares allocated to them, irrespective of such payment by the Payment Guarantor. The Offer

Shares allocated to such subscribers will be transferred to a VPS account operated by the Settlement Agent on behalf

of the Payment Guarantor and will be transferred to the non-paying subscriber when payment of the subscription

amount for the relevant Offer Shares is received. However, the Payment Guarantor reserves the right to sell or

assume ownership of the Offer Shares from and including the fourth day after the Payment Date without further notice

to the subscriber in question if payment has not been received within the third day after the Payment Date. If the

Offer Shares are sold on behalf of the subscriber, the subscriber will be liable for any loss, costs, charges and

expenses suffered or incurred by the Company and/or the Payment Guarantor as a result of or in connection with such

sales. The Company and/or the Payment Guarantor may enforce payment for any amount outstanding in accordance

with Norwegian law.

To the extent a payment guarantee agreement is not entered into or the Payment Guarantor decide not to assume

ownership to the unpaid Offer Shares, the Settlement Agent, on behalf of the Company, reserves the right, at the risk

and cost of the subscriber to, at any time from and including the fourth day after the Payment Date, cancel the

subscription and to reallocate or otherwise dispose of allocated Offer Shares for which payment is overdue, on such

terms and in such manner as the Settlement Agent may decide in accordance with Norwegian law. The subscriber will

remain liable for payment of the subscription amount, together with any interest, costs, charges and expenses accrued

and the Settlement Agent, on behalf of the Company, may enforce payment for any such amount outstanding in

accordance with Norwegian law.

17.2.14 Delivery of the Offer Shares

Subject to timely payment by the subscriber, delivery of the Offer Shares allocated in the Subsequent Offering is


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expected to take place on or about 17 November 2016.

17.2.15 Listing of the Offer Shares

The Shares are listed on the Oslo Stock Exchange under ISIN BMG067231032 and ticker code "AVANCE".

The Offer Shares will be listed on the Oslo Stock Exchange as soon as the Offer Shares have been registered in the

VPS. This is expected to take place on or about 18 November 2016.

The Offer Shares may not be transferred or traded before they are fully paid and the registration of the Offer Shares in

the VPS has taken place.

17.2.16 The rights conferred by the Offer Shares

The Offer Shares in the Subsequent Offering will be issued in accordance with Bermuda law and the Bermuda

Companies Act. The Offer Shares will in all respects rank pari passu with all other Shares in issue, and will be eligible

for any dividend that the Company may declare on the Shares after the delivery of the beneficial interests in the Offer

Shares through registration in the VPS (expected on or around 17 November 2016). See Section 14 "Corporate

information and description of the share capital" for a description of rights attached to the Shares.

17.2.17 VPS registration

The Subscription Rights will be registered in the VPS under ISIN BMG067231297. The beneficial interests in the Offer

Shares will be registered in book-entry form with the VPS, with the same ISIN as the existing Shares, i.e. ISIN

BMG067231032, while the Offer Shares will be registered in the name of DNB Bank ASA in the register of members of

the Company in Bermuda. The Company's register of shareholders with the VPS is administrated by DNB Bank ASA,

Registrars Department, N-0021 Oslo, Norway. See Section 14.6 "VPS registration of the Shares" for a description of

the VPS registration of the Shares.

17.2.18 Dilution

The Subsequent Offering will result in an immediate dilution of approximately 3.9% for Eligible Shareholders who do

not participate in the Subsequent Offering.

17.2.19 Net proceeds and expenses related to the Subsequent Offering

The Company will bear the fees and expenses related to the Subsequent Offering, which are estimated to amount to

approximately USD 0.25 million if all the Offer Shares are issued and based on a USD/NOK exchange rate of 8.2, of

which approximately USD 0.1 million are fees to the Managers and approximately USD 0.15 million are other fees,

costs and expenses. No expenses or taxes will be charged by the Company or the Managers to the subscribers in the

Subsequent Offering.

The fees to the Managers in connection with the Subsequent Offering comprise a fixed fee equal to 2.00% of the total

gross proceeds raised in the Subsequent Offering, of which each Joint Bookrunner will be entitled to 20% and each

Joint Manager will be entitled to 6.667%.

Total net proceeds from the Subsequent Offering are estimated to amount to approximately USD 5.0 million assuming

all the Offer Shares are issued and a USD/NOK exchange rate of 8.2. For a description of the use of such proceeds,

see Section 17.2.2 "Use of proceeds".

17.2.20 Interest of natural and legal persons involved in the Subsequent Offering

The Managers or their affiliates have provided from time to time, and may provide in the future, investment and

commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may

have received and may continue to receive customary fees and commissions. The Managers, their employees and any

affiliate may currently own Shares in the Company. Furthermore, in connection with the Subsequent Offering, the

Managers, their employees and any affiliate acting as an investor for its own account may receive Subscription Rights

(if they are Eligible Shareholders) and may exercise its right to take up such Subscription Rights and acquire Offer

Shares, and, in that capacity, may retain, purchase or sell Offer Shares and any other securities of the Company or

other investments for its own account and may offer or sell such securities (or other investments) otherwise than in

connection with the Subsequent Offering. The Managers do not intend to disclose the extent of any such investments

or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

Furthermore, the Managers will receive fees in connection with the Subsequent Offering and, as such, have an interest


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in the Subsequent Offering. See Section 17.2.19 "Net proceeds and expenses related to the Subsequent Offering" for

information on fees to the Managers in connection with the Subsequent Offering.

17.2.21 Participation of major shareholders and members of the Company's management, supervisory and

administrative bodies in the Subsequent Offering

Except for Niels G. Stolt-Nielsen (Chairman of the Board of Directors) and Peder Carl Gram Simonsen (Chief Financial

Officer of the Company), the Company is not aware of whether any major shareholders of the Company or members of

the Company's management, supervisory or administrative bodies intend to subscribe for Offer Shares in the

Subsequent Offering, or whether any person intends to subscribe for more than 5% of the Subsequent Offering.

17.2.22 Publication of information relating to the Subsequent Offering

In addition to press releases which will be posted on the Company's website, the Company will use the Oslo Stock

Exchange's information system to publish information relating to the Subsequent Offering.

17.2.23 Governing law and jurisdiction

The Subscription Forms and the terms and conditions of the Subsequent Offering shall be governed by, and construed

in accordance with Norwegian law. Any dispute arising out of, or in connection with, the Subscription Forms or the

Subsequent Offering shall be subject to the exclusive jurisdiction of the courts of Norway, with Oslo District Court as

legal venue.


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18 SELLING AND TRANSFER RESTRICTIONS

18.1 General

The grant of Subscription Rights and issue of the Offer Shares upon exercise of Subscription Rights to persons resident

in, or who are citizens of countries other than Norway, may be affected by the laws of the relevant jurisdiction.

Investors should consult their professional advisers as to whether they require any governmental or other consent or

need to observe any other formalities to enable them to exercise Subscription Rights or purchase Offer Shares.

The Company is not taking any action to permit a public offering of the Subscription Rights and Offer Shares in any

jurisdiction other than Norway. Receipt of this Prospectus will not constitute an offer in those jurisdictions in which it

would be illegal to make an offer and, in those circumstances, this Prospectus is for information only and should not be

copied or redistributed. Except as otherwise disclosed in this Prospectus, if an investor receives a copy of this

Prospectus in any territory other than Norway, the investor may not treat this Prospectus as constituting an invitation

or offer to it, nor should the investor in any event deal in the Subscription Rights and Offer Shares, unless, in the

relevant jurisdiction, such an invitation or offer could lawfully be made to that investor, or the Subscription Rights and

Offer Shares could lawfully be dealt in without contravention of any unfulfilled registration or other legal requirements.

Accordingly, if an investor receives a copy of this Prospectus, the investor should not distribute or send the same, or

transfer the Subscription Rights and Offer Shares to any person or in or into any jurisdiction where to do so would or

might contravene local securities laws or regulations. If the investor forwards this Prospectus into any such territories

(whether under a contractual or legal obligation or otherwise), the investor should direct the recipient's attention to

the contents of this Section.

Except as otherwise noted in this Prospectus and subject to certain exceptions: (i) the Subscription Rights and Offer

Shares being granted or offered, respectively, in the Subsequent Offering may not be offered, sold, resold, transferred

or delivered, directly or indirectly, in or into, member states of the EEA that have not implemented the Prospectus

Directive, the United States or any other jurisdiction in which it would not be permissible to offer the Subscription

Rights and/or the Offer Shares (the "Ineligible Jurisdictions"); (ii) this Prospectus may not be sent to any person in

any Ineligible Jurisdiction; and (iii) the crediting of Subscription Rights to an account of an Ineligible Shareholder or

other person in an Ineligible Jurisdiction or a citizen of an Ineligible Jurisdiction does not constitute an offer to such

persons of the Subscription Rights or the Offer Shares. Ineligible Shareholders or a person to whom the Subsequent

Offering cannot be lawfully made (collectively, "Ineligible Persons") may not exercise Subscription Rights.

If an investor takes up Subscription Rights, exercises Subscription Rights to obtain Offer Shares or trades or otherwise

deals in the Offer Shares, that investor will be deemed to have made or, in some cases, be required to make, the

following representations and warranties to the Company and any person acting on the Company's or its behalf:

• the investor is not an Ineligible Person;

• the investor is not acting, and has not acted, for the account or benefit of an Ineligible Person;

• unless the investor is a QIB, the investor is located outside the United States and any person for whose

account or benefit it is acting on a non-discretionary basis is located outside the United States and, upon

acquiring Offer Shares, the investor and any such person will be located outside the United States;

• the investor understands that the Subscription Rights and Offer Shares have not been and will not be

registered under the U.S. Securities Act and may not be offered, sold, pledged, resold, granted, delivered,

allocated, taken up or otherwise transferred within the United States except pursuant to an exemption from,

or in a transaction not subject to, registration under the U.S. Securities Act; and

• the investor may lawfully be offered, take up, subscribe for and receive Subscription Rights and Offer

Shares in the jurisdiction in which it resides or is currently located.

The Company and any persons acting on behalf of the Company, including the Managers, will rely upon the investor's

representations and warranties. Any provision of false information or subsequent breach of these representations and

warranties may subject the investor to liability.

If a person is acting on behalf of a holder of Subscription Rights (including, without limitation, as a nominee, custodian

or trustee), that person will be required to provide the foregoing representations and warranties to the Company with

respect to the exercise of Subscription Rights on behalf of the holder. If such person cannot or is unable to provide the

foregoing representations and warranties, the Company will not be bound to authorise the allocation of any of the


107

Subscription Rights and Offer Shares to that person or the person on whose behalf the other is acting. Subject to the

specific restrictions described below, if an investor (including, without limitation, its nominees and trustees) is outside

Norway and wishes to exercise Subscription Rights or otherwise deal in or subscribe for Offer Shares, the investor

must satisfy itself as to full observance of the applicable laws of any relevant territory including obtaining any requisite

governmental or other consents, observing any other requisite formalities and paying any issue, transfer or other

taxes due in such territories.

The information set out in this Section is intended as a general guide only. If the investor is in any doubt

as to whether it is eligible to exercise its Subscription Rights or subscribe for the Offer Shares, that

investor should consult its professional adviser without delay.

Subscription Rights will initially be credited to financial intermediaries for the accounts of all shareholders who hold

Shares registered through a financial intermediary on the Record Date. Subject to certain exceptions, financial

intermediaries, which include brokers, custodians and nominees, may not exercise any Subscription Rights on behalf of

any person in the Ineligible Jurisdictions or any Ineligible Persons and may be required in connection with any exercise

of Subscription Rights to provide certifications to that effect.

Subject to certain exceptions, financial intermediaries are not permitted to send this Prospectus or any other

information about the Subsequent Offering into any Ineligible Jurisdiction or to any Ineligible Persons. Subject to

certain exceptions, exercise instructions or certifications sent from or postmarked in any Ineligible Jurisdiction will be

deemed to be invalid and Offer Shares will not be delivered to an addressee in any Ineligible Jurisdiction. The

Company reserves the right to reject any exercise (or revocation of such exercise) in the name of any person who

provides an address in an Ineligible Jurisdiction for acceptance, revocation of exercise or delivery of such Subscription

Rights and Offer Shares, who is unable to represent or warrant that such person is not in an Ineligible Jurisdiction and

is not an Ineligible Person, who is acting on a non-discretionary basis for such persons, or who appears to the

Company or its agents to have executed its exercise instructions or certifications in, or dispatched them from, an

Ineligible Jurisdiction. Furthermore, the Company reserves the right, with sole and absolute discretion, to treat as

invalid any exercise or purported exercise of Subscription Rights which appears to have been executed, effected or

dispatched in a manner that may involve a breach or violation of the laws or regulations of any jurisdiction.

Notwithstanding any other provision of this Prospectus, the Company reserves the right to permit a holder to exercise

its Subscription Rights if the Company, in its absolute discretion, is satisfied that the transaction in question is exempt

from or not subject to the laws or regulations giving rise to the restrictions in question. Applicable exemptions in

certain jurisdictions are described further below. In any such case, the Company does not accept any liability for any

actions that a holder takes or for any consequences that it may suffer as a result of the Company accepting the

holder's exercise of Subscription Rights.

No action has been or will be taken by the Company or the Managers to permit the possession of this Prospectus (or

any other offering or publicity materials or application form(s) relating to the Subsequent Offering) in any jurisdiction

where such distribution may lead to a breach of any law or regulatory requirement.

Neither the Company nor the Managers, nor any of their respective representatives, is making any representation to

any offeree, subscriber or purchaser of Offer Shares and/or holder of Subscription Rights regarding the legality of an

investment in the Offer Shares by such offeree, subscriber or purchaser under the laws applicable to such offeree,

subscriber or purchaser. Each investor should consult its own advisers before subscribing for, or purchasing, Offer

Shares. Investors are required to make their independent assessment of the legal, tax, business, financial and other

consequences of a subscription for, or purchasing, Offer Shares.

A further description of certain restrictions in relation to the Subscription Rights and the Offer Shares in certain

jurisdictions is set out below.

18.2 United States

The Subscription Rights and Offer Shares have not been and will not be registered under the U.S. Securities Act or

with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered,

sold, taken up, exercised, resold, transferred or delivered, directly or indirectly, within the United States except

pursuant to an applicable exemption from the registration requirements of the U.S. Securities Act and in compliance

with the securities laws of any state or other jurisdiction of the United States. There will be no public offer of the

Subscription Rights and Offer Shares in the United States. A notification of exercise of Subscription Rights and

subscription of Offer Shares in contravention of the above may be deemed to be invalid.


108

The Subscription Rights and Offer Shares are being offered and sold outside the United States in reliance on

Regulation S. Any offering of the Subscription Rights and Offer Shares by the Company to be made in the United

States will be made only to a limited number of QIBs pursuant to an exemption from registration under the U.S.

Securities Act, who have executed and returned an investor letter to the Company prior to exercising their

Subscription Rights. Prospective purchasers are hereby notified that sellers of Offer Shares may be relying on an

exemption from the provisions of Section 5 of the U.S. Securities Act provided by Rule 144A.

Accordingly, subject to certain limited exceptions, this Prospectus will not be sent to any shareholder with a registered

address in the United States. In addition, the Company and the Managers reserve the right to reject any instruction

sent by or on behalf of any account holder with a registered address in the United States in respect of the Subscription

Rights and/or the Offer Shares.

Any recipient of this Prospectus in the United States is hereby notified that this Prospectus has been furnished to it on

a confidential basis and is not to be reproduced, retransmitted or otherwise redistributed, in whole or in part, under

any circumstances. Furthermore, recipients are authorised to use it solely for the purpose of considering an investment

in the Offer Shares in the Subsequent Offering and may not disclose any of the contents of this document or use any

information herein for any other purpose. This Prospectus is personal to each offeree and does not constitute an offer

to any other person or to the public generally to subscribe for Offer Shares or otherwise acquire Offer Shares. Any

recipient of this document agrees to the foregoing by accepting delivery of this Prospectus.

Until 40 days after the commencement of the Subsequent Offering, any offer of Subscription Rights or offer or sale of

Offer Shares within the United States by any dealer (whether or not participating in the Subsequent Offering) may

violate the registration requirements of the U.S. Securities Act.

The Subscription Rights and the Offer Shares have not been approved or disapproved by the U.S. Securities and

Exchange Commission, any state securities commission in the United States or any other United States regulatory

authority nor have any of the foregoing authorities passed judgment upon or endorsed the merits of the offering of the

Subscription Rights and Offer Shares or the accuracy or adequacy of this document. Any representation to the contrary

is a criminal offense in the United States.

Each person to which Subscription Rights and/or Offer Shares are distributed, offered or sold in the United States, by

accepting delivery of this Prospectus or by its subscription for Offer Shares or purchase of Subscription Rights, will be

deemed to have represented and agreed, on its behalf and on behalf of any investor accounts for which it is

subscribing for Offer Shares or purchasing Subscription Rights, as the case may be, that:

(i) it is a "qualified institutional buyer" as defined in Rule 144A of the U.S. Securities Act, and that it has

executed and returned an investor letter to the Company prior to exercising their Subscription Rights;

(ii) it understands that such Offer Shares are "restricted securities" for purposes of the U.S. securities laws and

may not be offered, sold, pledged or otherwise transferred except (i)(A) in accordance with Rule 144A to a

person that it and any person acting on its behalf reasonably believe is a QIB purchasing for its own account

or for the account of a QIB, (B) in an offshore transaction in accordance with Rule 903 or Rule 904 of

Regulation S under the U.S. Securities Act, (C) pursuant to an exemption from registration under the U.S.

Securities Act provided by Rule 144 thereunder (if available), (D) pursuant to any other available exemption

from registration under the U.S. Securities Act or (E) pursuant to an effective registration statement under

the U.S. Securities Act, and (ii) in accordance with all applicable federal and state securities laws of the

United States; and

(iii) the Subscription Rights and Offer Shares have not been offered to it by the Company by means of any form

of "general solicitation" or "general advertising" (within the meaning of Regulation D under the U.S.

Securities Act).

To the extent that any of the Managers intends to effect any offers or sales of shares in the United States or to U.S.

persons, it will do so through its respective U.S. registered broker-dealer affiliates, pursuant to applicable U.S.

securities laws.

18.3 United Kingdom

This Prospectus is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or

(ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial


109

Promotion) Order 2005 (the Order) or (iii) high net worth entities and other persons to whom it may lawfully be

communicated falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as

Relevant Persons). The Offer Shares are only available to, and any invitation, offer or agreement to subscribe,

purchase or otherwise acquire such Shares will be engaged in only with, Relevant Persons. Any person who is not a

Relevant Person should not act or rely on this Prospectus or any of its contents.

Each of the Managers has represented, warranted and agreed (i) that it has only communicated or caused to be

communicated and will only communicate or cause to be communicated an invitation or inducement to engage in

investment activity (within the meaning of section 21 of the FSMA) received by it in connection with the issue or sale

of the Offer Shares in circumstances in which section 21(1) of the FSMA does not apply to the Company and (ii) that it

has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation

to the Offer Shares in, from or otherwise involving the United Kingdom.

18.4 European Economic Area

In relation to each Relevant Member State, with effect from and including the date on which the EU Prospectus

Directive is implemented in that Relevant Member State (the "Relevant Implementation Date"), an offer to the

public of any Offer Shares which are the subject of the Subsequent Offering contemplated by this Prospectus may not

be made in that Relevant Member State, other than the offering in Norway as described in this Prospectus, once the

Prospectus has been approved by the competent authority in Norway and published in accordance with the EU

Prospectus Directive (as implemented in Norway), except that an offer to the public in that Relevant Member State of

any Offer Shares may be made at any time with effect from and including the Relevant Implementation Date under the

following exemptions under the EU Prospectus Directive, if they have been implemented in that Relevant Member

State:

a. to legal entities which are qualified investors as defined in the EU Prospectus Directive;

b. to fewer than 100, or, if the Relevant Member State has implemented the relevant provisions of the 2010

PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the EU

Prospectus Directive), as permitted under the EU Prospectus Directive, subject to obtaining the prior

consent of the Managers for any such offer; or

c. in any other circumstances falling within Article 3(2) of the EU Prospectus Directive;

provided that no such offer of Offer Shares shall require the Company or any Manager to publish a prospectus

pursuant to Article 3 of the EU Prospectus Directive or supplement a prospectus pursuant to Article 16 of the EU

Prospectus Directive.

For the purposes of this provision, the expression an "offer to the public" in relation to any Offer Shares in any

Relevant Member State means the communication in any form and by any means of sufficient information on the

terms of the offer and any securities to be offered so as to enable an investor to decide to purchase any Offer Shares,

as the same may be varied in that member state by any measure implementing the EU Prospectus Directive in that

Member State the expression "EU Prospectus Directive" means Directive 2003/71/EC (and amendments thereto,

including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes

any relevant implementing measure in each Relevant Member State and the expression "2010 PD Amending Directive"

means Directive 2010/73/EU.

This EEA selling restrictions is in addition to any other selling restrictions set out in this Prospectus.

18.5 Additional jurisdictions

The Subscription Rights may not be exercised and the Offer Shares may not be offered, sold, exercised, pledged,

resold, granted, allocated, taken up, transferred or delivered, directly or indirectly, in or into Australia, Canada, Hong

Kong, Japan or any other jurisdiction in which it would not be permissible to offer the Subscription Rights or the Offer

Shares.


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19 ADDITIONAL INFORMATION

19.1 Auditor and advisors

The Company's independent auditor is PricewaterhouseCoopers AS with registration number 987 009 713, and

business address at Dronning Eufemias gate 8, N-0191 Oslo, Norway. The partners of PricewaterhouseCoopers AS are

members of The Norwegian Institute of Public Accountants (Nw.: Den Norske Revisorforening).

ABN AMRO (Gustav Mahlerlaan 10, 1082 PP Amsterdam, the Netherlands), Danske Bank (Bryggetorget 4, N-0107

Oslo, Norway), DNB Markets (Dronning Eufemias gate 30, N-0191 Oslo, Norway) and Nordea Markets (Essendrops

gate 7, N-0368 Oslo, Norway) are acting as Joint Bookrunners in connection with the Private Placement and the

Subsequent Offering and Credit Agricole Corporate and Investment Bank (12, Place des Etats-Unis – CS 70052 -

92547 Montrouge Cedex, France), SEB (Filipstad brygge 1, N-0252 Oslo, Norway) and Swedbank (Filipstad brygge 1,

N-0252 Oslo, Norway) are acting as Joint Managers in connection with the Private Placement and the Subsequent

Offering.

Advokatfirmaet Thommessen AS (Haakon VII's gate 10, N-0161 Oslo, Norway) is acting as Norwegian legal counsel to

the Company and Appleby (Bermuda) Limited (Canon's Court, 22 Victoria Street, Hamilton HM EX, Bermuda) is acting

as special Bermuda legal counsel to the Company.

19.2 Documents on display

Copies of the following documents will be available for inspection at the Company's offices at Thistle House, 4 Burnaby

Street, Hamilton HM 11, Bermuda, during normal business hours from Monday to Friday each week (except public

holidays) for a period of twelve months from the date of this Prospectus:

The Company's Memorandum of Association and Bye-laws;

All reports, letters, and other documents, historical financial information, valuations and statements

prepared by any expert at the Company's request any part of which is included or referred to in this

Prospectus;

The historical financial information of the Company and its subsidiary undertakings for each of the two years

preceding the publication of this Prospectus; and

This Prospectus.

19.3 Incorporation by reference

The information incorporated by reference in this Prospectus should be read in connection with the cross reference

table set out below. Except as provided in this Section, no information is incorporated by reference in this Prospectus.

The Company incorporates by reference the Group's unaudited consolidated interim financial statements as of, and for

the three and nine month periods ended, 30 September 2016 and 2015 (the Interim Financial Statements) and the

Group's audited consolidated financial statements as of, and for the year ended, 31 December 2015, as of, and for the

thirteen month period ended, 31 December 2014 and as of, and for the financial year ended, 30 November 2013 (the

Financial Statements), as well as certain other documents set out below.

Section in the Prospectus

Disclosure requirement Reference document and link Page (P) in reference

document

Section 10 and 11

Audited historical financial

information (Annex I,

Section 20.1)

Financial Statements 2015:

http://www.newsweb.no/newsweb/search.do?messageId=400192 P 22 - 50




http://hugin.info/161089/R/1792468/616994.pdf P 3 - 25

Section 10.8

Audit report (Annex I,

Section 20.4.1)

Auditor's report 2015:





111


http://hugin.info/161089/R/1792468/616994.pdf P 26 - 28

Section 10.2 Accounting policies (Annex I,

Section 20.1)

Accounting principles:


Section 10 and 11 Interim financial information

(Annex I, section 20.6.1)

Interim Financial Statements Q3 2016:


Interim Financial Statements Q3 2015:



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20 DEFINITIONS AND GLOSSARY

In the Prospectus, the following defined terms have the following meanings:

2010 PD Amending Directive ............... Directive 2010/73/EU amending the EU Prospectus Directive.

ABN AMRO ........................................ ABN AMRO Bank N.V.

Amendment Agreements .................... The agreements governing inter alia the reduction in amortisation of the USD 450 million

credit facility and USD 200 million credit facility.

Anti-Money Laundering Legislation ....... The Norwegian Money Laundering Act of 6 March 2009 no. 11 and the Norwegian Money

Laundering Regulations of 13 March 2009 no. 302, collectively.

Appointed Stock Exchange .................. An appointed stock exchange in accordance with the Bermuda Companies Act.

Avance Gas ....................................... Avance Gas Holding Ltd.

Bank Debt Amendments ..................... The bank debt amendments as further described in Section 11.8.2 "The Bank Debt

Amendments".

Bermuda Companies Act ..................... The Companies Act 1981, as amended, of Bermuda.

Board of Directors.............................. The board of directors of the Company.

Bye-laws .......................................... The Company's bye-laws.

CET ................................................. Central European Time.

Company .......................................... Avance Gas Holding Ltd.

COA ................................................. Contract of Affreightment.

Corporate Governance Code ............... The Norwegian Code of Practice for Corporate Governance, last amended 30 October

2014.

Danske Bank ..................................... Danske Bank, Norwegian branch.

Deferral Period .................................. The 2.5 year period from January 2017.

Directors .......................................... The members of the Board of Directors.

DNB Markets ..................................... DNB Markets, a part of DNB Bank ASA.

EEA ................................................. The European Economic Area.

EU ................................................... The European Union.

EUR ................................................. The lawful common currency of the EU member states who have adopted the Euro as

their sole national currency.

EU Prospectus Directive ...................... Directive 2003/71/EC of the European Parliament and of the Council of 4 November

2003, and amendments thereto, including the 2010 PD Amending Directive to the extent

implemented in the Relevant Member State.

Eligible Shareholders .......................... The shareholders of the Company holding less than 63,000 shares in the Company as of

20 October 2016 (and being registered as such in the VPS on the Record Date), except

for shareholders having been allocated Private Placement Shares in the Private

Placement, and who are not resident in a jurisdiction where such offering would be

unlawful, or for jurisdictions other than Norway, would require any filing, registration or

similar action.

Financial Information ......................... The Financial Statements and the Interim Financial Statements, collectively.

Financial Statements .......................... The Company's audited consolidated financial statements as of, and for the year ended,

31 December 2015, as of, and for the thirteen month period ended, 31 December 2014

and as of, and for the financial year ended, 30 November 2013.

Frontline 2012 ................................... Frontline 2012 Ltd.

FSMA ............................................... UK Financial Services and Markets Act 2000.

Group .............................................. The Company and its consolidated subsidiaries.

IAS 34 ............................................. International Accounting Standard 34 "Interim Financial Reporting" as adopted by the EU.

IFRS ................................................ International Financial Reporting Standards as adopted by the EU.

IMO ................................................. The International Maritime Organization.

Ineligible Jurisdictions ........................ Member states of the EEA that have not implemented the Prospectus Directive, the

United States and any other jurisdiction in which it would not be permissible to offer the

Subscription Rights and/or the Offer Shares.

Ineligible Persons .............................. Ineligible Shareholders or a person to whom the Subsequent Offering cannot be lawfully

made.

Ineligible Shareholders ....................... Eligible Shareholders resident in jurisdictions where the Prospectus may not be

distributed and/or with legislation that, according to the Company's assessment, prohibits

or otherwise restricts subscription for Offer Shares and Eligible Shareholders located in

the United States who the Company does not reasonably believe to be a QIB.


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Interim Financial Statements .............. The Company's unaudited consolidated interim financial statements as of, and for the

three and nine month periods ended, 30 September 2016 and 2015.

IT .................................................... Information technology.

Joint Bookrunners .............................. ABN AMRO, Danske Bank, DNB Markets and Nordea Markets, collectively.

Joint Managers .................................. Credit Agricole CIB, SEB and Swedbank, collectively.

LNG ................................................. Liquefied natural gas.

LPG.................................................. Liquefied petroleum gas.

Management ..................................... The senior management of the Group.

Managers ......................................... The Joint Bookrunners and the Joint Managers, collectively.

NOK ................................................. Norwegian Kroner, the lawful currency of Norway.

Nordea Markets ................................. Nordea Markets, a part of Nordea Bank Norge ASA.

Norwegian Corporate Shareholders ...... Shareholders who are limited liability companies (and certain similar entities) resident in

Norway for tax purposes.

Norwegian FSA .................................. The Financial Supervisory Authority of Norway (Nw.: Finanstilsynet).

Norwegian Personal Shareholders ........ Shareholders who are individuals resident in Norway for tax purposes.

Norwegian Securities Trading Act......... The Norwegian Securities Trading Act of 29 June 2007 no. 75 (Nw.:

verdipapirhandelloven).

Offer Shares ..................................... Up to 2,500,000 new Shares in the Company with a nominal value of USD 1.00 each.

Order ............................................... The UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as

amended.

Oslo Stock Exchange .......................... Oslo Børs ASA, or, as the context may require, Oslo Børs, a Norwegian regulated stock

exchange operated by Oslo Børs ASA.

Payment Date ................................... 16 November 2016.

Payment Guarantor ............................ Danske Bank.

PDH ................................................. Propane dehydrogenation plants.

Private Placement .............................. The private placement of new shares completed on 25 October 2016.

Private Placement Shares ................... 26,750,000 new shares issued in the Private Placement.

Prospectus ........................................ This Prospectus, dated 26 October 2016.

Prospectus Directive .......................... Directive 2003/71/EC (including Directive 2010/73/EU and together with any relevant

implementing measure).

QIBs ................................................ Qualified institutional buyers as defined in Rule 144A.

Record Date ...................................... 24 October 2016.

Registrar Agreement .......................... The registrar agreement entered into between the Company and the VPS Registrar for

the registration of the beneficial interests in the Shares in book-entry form in the VPS.

Regulation S ..................................... Regulation S under the U.S. Securities Act.

Relevant Implementation Date ............ In relation to each Relevant Member State, with effect from and including the date on

which the EU Prospectus Directive is implemented in that Relevant Member State.

Relevant Member State ...................... Each Member State of the EEA which has implemented the EU Prospectus Directive.

Relevant Persons ............................... Persons in the UK that are (i) investment professionals falling within Article 19(5) of the

Order or (ii) high net worth entities, and other persons to whom the Prospectus may

lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order.

Rule 144A ......................................... Rule 144A under the U.S. Securities Act.

SEB ................................................. Skandinaviska Enskilda Banken AB (publ.), Oslo Branch.

SEC ................................................. U.S. Securities and Exchange Commission.

Settlement Agent .............................. Danske Bank.

Share(s) ........................................... The existing common shares of the Company, each with a nominal value USD 1.00,

including the Private Placement Shares and the Offer Shares.

Stolt-Nielsen Gas ............................... Stolt-Nielsen Gas Ltd.

Subscription Form ............................. The form for subscription of Offer Shares attached hereto as Appendix B.

Subscription Offices ........................... The subscription offices where subscriptions for Offer Shares must be made by

submitting a correctly completed Subscription Form during the Subscription Period.

Subscription Period ............................ From 09:00 hours (CET) on 27 October 2016 to 16:30 hours (CET) on 10 November

2016.

Subscription Price .............................. The subscription price for the Offer Shares, being NOK 17.00 per Offer Share.

Subscription Rights ............................ Subscription rights that, subject to certain limitations based on applicable laws and

regulations, provide preferential rights to subscribe for, and be allocated, Offer Shares at


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the Subscription Price.

Subsequent Offering .......................... The offering of up to 2,500,000 Offer Shares at a Subscription Price of NOK 17.00 per

Offer Share with Subscription Rights for Eligible Shareholders, as further described in

Section 17 "The Private Placement and the terms of the Subsequent Offering".

Sungas ............................................. Sungas Holdings Ltd.

Swedbank......................................... Swedbank Norway, a branch of Swedbank AB (publ.).

Transpetrol ....................................... Transpetrol Shipping Ltd.

UK ................................................... The United Kingdom.

U.S. or United States ......................... The United States of America.

U.S. Exchange Act ............................. The United States Securities Exchange Act of 1934, as amended.

U.S. Securities Act ............................. The United States Securities Act of 1933, as amended.

USD ................................................. United States Dollars, the lawful currency in the United States.

VLCG ............................................... Very large gas carrier.

VPS ................................................. The Norwegian Central Securities Depository (Nw.: Verdipapirsentralen).

VPS account ...................................... An account with VPS for the registration of holdings of securities.

VPS Registrar .................................... DNB Bank ASA.

APPENDIX A:

BYE-LAWS OF AVANCE GAS HOLDING LTD

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BYE-LAWS

OF

AVANCE GAS HOLDING LTD

__________________________ Secretary

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A v a n c e G a s H o l d i n g L t d P a g e | 2

TABLE OF CONTENTS

Interpretation 23. Giving Notice 49. Remuneration of Officers

1. Definitions 24. Postponement or Cancellation of General Meeting

50. Conflicts of Interest

Shares

2. Power to Issue Shares

25. Attendance and Security at General Meetings

51. Indemnification and Exculpation of Directors and Officers

3. Power of the company to Purchase its Shares

26. Quorum at General Meetings

Meetings of the Board of

Directors 4. Rights Attaching to

Shares 27. Chairman to Preside 28. Voting on Resolutions

52. Board Meetings

5. Calls on Shares 6. Forfeiture of Shares

29. Power to Demand Vote On Poll

53. Notice of Board Meetings

7. Share Certificates 8. Fractional Shares

30. Voting by Joint Holders of Shares

31. Instrument of Proxy

54. Electronic Participation In Meetings by Telephone

Registration of Shares 9. Register of Members

32. Representation of Corporate Member

55. Quorum at Board Meetings

10. Registered Holder Absolute Owner

33. Adjournment of General Meeting

56. Board to Continue in Event of Vacancy

11. Transfer of Registered Shares

12. Transmission of Registered Shares

34. Written Resolutions 35. Directors Attendance at

General Meetings

57. Chairman to Preside 58. Written Resolutions 59. Validity of Prior Acts of

The board Directors and Officers

Alteration of Share Capital 36. Election of Directors Corporate Records 13. Power to Alter Capital 14. Variation of Rights

Attaching to Shares

37. Term of Office of Directors

38. Alternate Directors

60. Minutes 61. Place Where Corporate

Records Kept 39. Removal of Directors 62. Form and Use of Seal

Dividends and Capitalisation

40. Vacancy in the Office of Director

Accounts

15. Dividends 16. Power to Set Aside

Profits

41. Remuneration of Directors

42. Defect in Appointment

63. Records of Account 64. Financial Year End

17. Method of Payment 18. Capitalisation

43. Directors to Manage Business

Audits 65. Annual Audit

Meetings of Members

19. Annual General Meetings

44. Powers of the Board of Directors

45. Register of Directors and Officers

66. Appointment of Auditors

67. Remuneration of Auditor

20. Special General Meetings

21. Requisitioned General Meetings

22. Notice

46. Appointment of Officers 47. Appointment of

Secretary 48. Duties of Officers

68. Duties of Auditors 69. Access to Records 70. Financial Statements

And the Auditors’ Report

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71. Vacancy in the Office of

Auditor

Voluntary Winding-Up and

Dissolution

72. Winding-Up

Changes to Constitution

73. Changes to Bye-laws 74. Change of Name 75. Changes to Memorandum

of Association

76. Discontinuance

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INTERPRETATION

1. Definitions 1.1 In these Bye-laws, the following words and expressions shall, there not inconsistent with

the context, have the following meanings, respectively: Act the companies Act 1981 as amended from

time to time; Alternate Director an alternate director appointed in accordance

with these Bye-laws; Auditor includes and individual or partnership; Board the board of directors appointed or elected

pursuant to these Bye-laws and acting by resolution in accordance with the Act and these Bye-laws or the directors present at a meeting of directors at which there is a quorum;

Chairman the Chairman of the Board appointed in accordance with Bye-law 46;

Company the company for which these Bye-laws are approved and confirmed;

Director a director of the Company and shall include and Alternate Director;

Group the Company and each of its subsidiaries and “Group Company” shall be construed accordingly;

Member the person registered in the Register of Members as the holder of shares in the Company and, when two or more persons are so registered as joint holders of shares, means the person whose name stands first in the Register of Members as one of such joint holders or all of such persons, as the context so requires;

Notice written notice as further provided in these Bye-laws unless otherwise specifically stated;

Officer any person appointed by the Board to hold an office in the Company;

Register of Directors and Officers the register of directors and officers referred to in these Bye-laws;

Register of Members the register of members referred to in these Bye-laws;

Registrar DNB Bank ASA, acting through its Registrar’s Department (known as “DNB Verdipapirservice”);

Resident Representative any person appointed to act as resident representative and includes any deputy or assistant resident representative;

Secretary the person appointed to perform any or all of the duties of secretary of the Company and includes any deputy or assistant secretary and any person appointed by the Board to perform the duties of the Secretary;

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Treasury Shares a share in the Company that was or is treated

as having been acquired and held by the Company and has been continuously by the Company since it was so acquired and has not been cancelled ; and

VPS The Norwegian Central Securities Depository maintained by Verdipapirsentralen ASA.

1.2 In these Bye-laws, where not inconsistent with the context:

(a) words denoting the plural number include the singular number and vice versa;

(b) words denoting the masculine gender include the feminine and neuter genders;

(c) words importing persons include companies, associations or bodies of persons

whether corporate or not;

(d) the words: (i) “may” shall be construed as permissive; and (ii) “shall” shall be construed as imperative;

(e) a reference to statutory provision shall be deemed to include any amendment or re-enactment thereof;

(f) the word “corporation” means a corporation whether or not a company within the meaning of the Act; and

(g) unless otherwise provided herein, words or expressions defined in the Act shall bear the same meaning in these Bye-laws.

1.3 In these Bye-laws expressions referring to writing or its cognates shall, unless the contrary intention appears, include facsimile, printing, lithography, photography, electronic mail and other modes or representing words in visible form.

1.4 Headings used in these Bye-laws are for convenience only and are not to be used or relied upon in the construction hereof.

SHARES

2 Power to Issue Shares Subject to these Bye-laws and to any resolution of the Members to the contrary, and without

prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, the board shall have the power to issue any unissued shares of the Company on such terms and conditions as it may determine.

3

Power of the Company to Purchase its Shares

3.1 The Company may purchase its own shares for cancellation or acquire them as Treasury Shares in accordance with the Act on such terms as the Board shall think fit.

3.2 The Board may exercise all the powers of the Company to purchase or acquire all or any part of its own shares in accordance with the Act.

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4 Rights Attaching to Shares 4.1 At the date these Bye-laws are adopted, the share capital of the Company shall consist of

common shares of par value US$I .00 each (the 'Common Shares").

4.2 The holders of Common Shares shall, subject to the provisions of these Bye-laws:

(a) be entitled to one vote per share;

(b) be entitled to such dividends as the Board may from time to time declare;

(c) in the event of a winding-up or dissolution of the Company, whether voluntary or involuntary or for the purpose of a reorganisation or otherwise or upon any distribution of capital, be entitled to the surplus assets of the Company; and

(d) generally be entitled to enjoy all of the rights attaching to shares.

4.3 All the rights attaching to a Treasury Share shall be suspended and shall not be exercised by the Company while it holds such Treasury Share and, except where required by the Act, all Treasury Shares shall be excluded from the calculation of any percentage or fraction of the share capital, or shares, of the Company.

5 Calls on Shares 5.1 The Board may make such calls as it thinks fit upon the Members in respect of any monies

(whether in respect of nominal value or premium) unpaid on the shares allotted to or held by such Members (and not made payable at fixed times by the terms and conditions of issue) and/ if a call is not paid on or before the day appointed for payment thereof, the Member may at the discretion of the Board be liable to pay the Company interest on the amount of such call at such rate as the Board may determine, from the date when such call was payable up to the actual date of payment. The Board may differentiate between the holders as to the amount of calls to be paid and the times of payment of such calls.

5.2 Any amount which by the terms of allotment of a share becomes payable upon issue or at any fixed date, whether on account of the nominal value of the share or by way of premium, shall for the purposes of these Bye-laws be deemed to be an amount on which a call has been duly made and payable, on the date on which, by the terms of issue, the same becomes payable, and in the case of non-payment all the relevant provisions of these Bye-laws as to payment of interest, costs, and expenses, forfeiture or otherwise shall apply as if such amount has become payable by virtue of a duly made and notified call

5.3 The joint holders of a share shall be jointly and severally liable to pay all calls and any interest, costs and expenses in respect thereof.

5.4 The Company may accept from any Member the whole or a part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up.

6 Forfeiture of Shares 6.1 If any Member fails to pay, on the day appointed for payment thereof, any call in respect

of any share allotted to or held by such Member, the Board may, at any time thereafter during such time as the call remains unpaid, direct the Secretary to forward such Member a notice in writing in the form, or as near thereto as circumstances admit, of the following:

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Notice of Liability to Forfeiture for Non-Payment of Call Avance Gas Holding Ltd (the "Company")

You have failed to pay the call of [amount of call] made on [date], in respect of the [number] share(s) [number in figures] standing in your name in the Register of Members of the Company, on [date], the day appointed for payment of such call. You are hereby notified that unless you pay such call together with interest thereon at the rate of [ ] per annum computed from the said [date] at the registered office of the Company the share(s) will be liable to be forfeited.

Dated this [date] __________________________________

__________________________________

[Signature of Secretary] By Order of the Board

6.2 If the requirements of such notice are not complied with, any such share may at any time thereafter before the payment of such call and the interest due in respect thereof be forfeited by a resolution of the Board to that effect, and such share shall thereupon become the property of the Company and may be disposed of as the Board shall determine. Without limiting the generality of the foregoing, the disposal may take place by sale, repurchase, redemption or any other method of disposal permitted by and consistent with these Bye-laws and the Act.

6.3 A Member whose share or shares have been so forfeited shall, notwithstanding such forfeiture, be liable to pay to the Company all calls owing on such share or shares at the time of the forfeiture together with all interest due thereon and any costs and expenses incurred by the Company in connection therewith.

6.4 The Board may accept the surrender of any shares which it is in a position to forfeit on such terms and conditions as may be agreed. Subject to those terms and conditions, a surrendered share shall be treated as if it had been forfeited.

7 Share Certificates 7.1 Subject to the Act, no share certificates shall be issued by the Company unless, in

respect of a class of shares, the Board has either for all or for some holders of such shares (who may be determined in such manner as the Board thinks fit) determined that the holder of such shares may be entitled to share certificates. In the case of a share held jointly by several persons, delivery of a certificate to one of several joint holders shall be sufficient delivery to all.

7.2 Subject to being entitled to a share certificate under the provisions of Bye-law 7.1, the Company shall be under no obligation to complete and deliver a share certificate unless specifically called upon to do so by the person to whom the shares have been allotted.

7.3 If any share certificate shall be proved to the satisfaction of the Board to have been worn out, lost, mislaid, or destroyed the Board may cause a new certificate to be issued and request an indemnity for the lost certificate if it sees fit.

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7.4 Notwithstanding any provisions of these Bye-laws:

(a) the Board shall, subject always to the Act and any other applicable laws and

regulations and the facilities and requirements of any relevant system concerned, have power to implement any arrangements it may, in its absolute discretion, think fit in relation to the evidencing of title to and transfer of uncertificated shares by means of the VPS system or any other relevant system, and to the extent such arrangements are so implemented, no provision of these Bye-laws shall apply or have effect to the extent that it is in any respect inconsistent with the holding or transfer of shares in uncertificated form; and

(b) unless otherwise determined by the Board and as permitted by the Act and any other applicable laws and regulations, no person shall be entitled to receive a certificate in respect of any share for so long as the title to that share is evidenced otherwise than by a certificate and for so long as transfers of that share may be made otherwise than by a written instrument.

8 Fractional Shares The Company may issue its shares in fractional denominations and deal with such

fractions to the same extent as its whole shares and shares in fractional denominations shall have in proportion to the respective fractions represented thereby all of the rights of whole shares including (but without limiting the generality of the foregoing) the right to vote, to receive dividends and distributions and to participate in a winding-up.

REGISTRATION OF SHARES

9 Register of Members 9.1 The Board shall cause to be kept in one or more books a Register of Members and

shall enter therein the particulars required by the Act. Subject to the provisions of the Act, the Board may resolve that the Company may keep one or more branch registers in any place in or outside of Bermuda, and the Board may make, amend and revoke any such regulations as it may think fit respecting the keeping of such branch registers. The Board may authorise any share on the Register of Members to be included in a branch register or any share registered on a branch register to be registered on another branch register, provided that at all times the Register Of Members is maintained in accordance with the Act.

9.2 The Register of Members shall be open to inspection without charge at the registered office of the Company on every business day, subject to such reasonable restrictions as the Board may impose, so that not less than two hours in each business day be allowed for inspection. The Register of Members may, after notice has been given in accordance with the Act, be closed for any time or times not exceeding in the whole thirty days in each year.

10 Registered Holder Absolute Owner The Company shall be entitled to treat the registered holder of any share as the

absolute owner thereof and accordingly shall not be bound to recognise any equitable claim or other claim to, or interest in, such share on the part of any other person.

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11 Transfer of Registered Shares 11.1 Subject to the Act and to such of the restrictions contained in these Bye-laws as may

be applicable, any Member may transfer all or any of his shares by an instrument of transfer in the usual common form or in any other form which the Board may approve. No such instrument shall be required on the redemption of a share or on the purchase by the Company of a share. Where applicable, all transfers of uncertificated shares shall be made in accordance with and be subject to the facilities and requirements of the transfer of title to shares in that class by means of the VPS system or any other relevant system concerned and, subject thereto, in accordance with any arrangements made by the Board pursuant to Bye-law 7.

11.2 The instrument of transfer shall be signed by (or on behalf of) the transferor and transferee, provided that, in the case of a fully paid share, the Board may accept the instrument signed by or on behalf of the transferor alone. The transferor shall be deemed to remain the holder of such share until the same has been registered as having been transferred to the transferee In the Register of Members.

11.3 The Board may refuse to recognise any instrument of transfer unless it is accompanied by the certificate in respect of the shares (if one has been issued) to which it relates and by such other evidence as the Board may reasonably require to prove the right of the transferor to make the transfer.

11.4 The joint holders of any share may transfer such share to one or more of such joint holders, and the surviving holder or holders of any share previously held by them jointly with a deceased Member may transfer any such share to the executors or administrators of such deceased Member.

11.5 The Board may refuse to register the transfer of any share, and may direct the Registrar to decline (and the Registrar, to the extent it is able to do so, shall decline if so requested) to register the transfer of any interest in a share held through the VPS, where such a transfer would, in the opinion of the Board, be likely to result in 50% or more of the aggregate issued and outstanding share capital of the Company, or shares of the Company which are attached 50% or more of the votes attached to all issued and outstanding shares of the Company, being held or owned directly or indirectly by individuals or legal persons resident for tax purposes in Norway or, alternatively, such shares being effectively connected to a Norwegian business activity, or the Company otherwise being deemed a Controlled Foreign Company as such term is defined pursuant to Norwegian tax legislation.

11.6 The Board may in its absolute discretion and without assigning any reason therefore refuse to register the transfer of a share which is not fully paid. The Board shall refuse to register a transfer unless all applicable consents, authorisations and permissions of any governmental body or agency in Bermuda have been obtained. If the Board refuses to register a transfer of any share the Secretary shall, within three months after the date on which the transfer was lodged with the Company, send to the transferor and transferee notice of the refusal.

11.7 Shares may be transferred without a written instrument if transferred by an appointed agent or otherwise in accordance with the Act.

11.8 Subject to Bye-law 11.5, but notwithstanding anything else to the contrary in these Bye-laws, shares that are listed or admitted to trading on an appointed stock

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exchange may be transferred in accordance with the rules and regulations of such exchange.

12 Transmission of Registered Shares 12.1 In the case of the death of a Member, the survivor or survivors where the deceased

Member was a joint holder, and the legal personal representatives of the deceased Member where the deceased Member was a sole holder, shall be the only persons recognised by the Company as having any title to the deceased Member’s interest in the shares. Nothing herein contained shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by such deceased Member with other persons. Subject to the provisions of the Act, for the purpose of this Bye-law, legal personal representative means the executor or administrator of a deceased Member or such other person as the Board may, in its absolute discretion, decide as being properly authorised to deal with the shares of a deceased Member.

12.2 Any person becoming entitled to a share in consequence of the death or bankruptcy of any Member may be registered as a Member upon such evidence as the Board may deem sufficient or may elect to nominate some person to be registered as a transferee of such share, and in such case the person becoming entitled shall execute in favour of such nominee an instrument of transfer in writing in the form, or as near thereto as circumstances admit, of the following:

Transfer by a Person Becoming Entitled on Death/Bankruptcy of a Member

Avance Gas Holding Ltd (the "Company")

I/We, having become entitled in consequence of the [death/bankruptcy] of [name and address of deceased/bankrupt Member] to [number] share(s) standing in the Register of Members of the Company in the name of the said [name of deceased/bankrupt Member] instead of being registered myself/ourselves, elect to have [name of transferee] (the "Transferee") registered as a transferee of such share(s) and I/we do hereby accordingly transfer the said share(s) to the Transferee to hold the same unto the Transferee, his or her executors, administrators and assigns, subject to the conditions on which the same were held at the time of the execution hereof; and the Transferee does hereby agree to take the said share(s) subject to the same conditions.

DATED this [date] Signed by: In the presence of: ____________________ _____________________ Transferor Witness Signed by: In the presence of: ____________________ _____________________ Transferee Witness

12.3 On the presentation of the foregoing materials to the Board, accompanied by such evidence as the Board may require to prove the title of the transferor, the transferee

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shall be registered as a Member. Notwithstanding the foregoing, the Board shall, in any case, have the same right to decline or suspend registration as it would have had in the case of a transfer of the share by that Member before such Member's death or bankruptcy, as the case may be.

12.4 Where two or more persons are registered as joint holders of a share or shares, thenin the event of the death of any joint holder or holders the remaining joint holder or holders shall be absolutely entitled to such share or shares and the Company shall recognise no claim in respect of the estate of any joint holder except in the case of the last survivor of such joint holders.

ALTERATION OF SHARE CAPITAL

13 Power to Alter Capital 13.1 The Company may if authorised by resolution of the Members increase, divide,

consolidate, subdivide, change the currency denomination of, diminish or otherwise alter or reduce its share capital in any manner permitted by the Act.

13.2 Where, on any alteration or reduction of share capital, fractions of shares or some other difficulty would arise, the Board may deal with or resolve the same in such manner as it thinks fit.

14 Variation of Rights Attaching to Shares If, at any time, the share capital is divided into different classes of shares, the rights attached to

any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the Company is being wound-up, be varied with the consent in writing of the holders of three-fourths of the issued shares of that class or with the sanction of a resolution passed by a majority of the votes cast at a separate general meeting of the holders of the shares of the class at which meeting the necessary quorum shall be two persons at least holding or representing by proxy one-third of the issued shares of the class. The rights conferred upon the holders of the shares of any class or series issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class or series, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

DIVIDENDS AND CAPITALISATION

15 Dividends 15.1 The Board may, subject to these Bye-laws and in accordance with the Act, declare a

dividend to be paid to the Members, in proportion to the number of shares held by them, and such dividend may be paid in cash or wholly or partly in specie in which case the Board may fix the value for distribution in specie of any assets. No unpaid dividend shall bear interest as against the Company.

15.2 The Board may fix any date as the record date for determining the Members entitled to receive any dividend.

15.3 The Company may pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.

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15.4 The Board may declare and make such other distributions (in cash or in specie) to the Members as may be lawfully made out of the assets of the Company. No unpaid distribution shall bear interest as against the Company.

16 Power to Set Aside Profits The Board may, before declaring a dividend, set aside out of the surplus or profits of the Company, such amount as it thinks proper as a reserve to be used to meet contingencies or for equalising dividends or for any other purpose.

17 Method of Payment 17.1 Any dividend, interest, or other moneys payable in cash in respect of the shares may be

paid through the VPS system or any other relevant system, by cheque or draft sent through the post directed to the Member at such Member's address in the Register of Members, or to such person and to such address as the holder may in writing directs.

17.2 In the case of joint holders of shares, any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or draft sent through the post directed to the address of the holder first named in the Register of Members, or to such person and to such address as the joint holders may in writing direct. If two or more persons are registered as joint holders of any shares any one can give an effectual receipt for any dividend paid in respect of such shares.

17.3 The Board may deduct from the dividends or distributions payable to any Member all moneys due from such Member to the Company on account of calls or otherwise.

17.4 Any dividend and or other monies payable in respect of a share which has remained unclaimed for 6 years from the date when it became due for payment shall, if the Board so resolves, be forfeited and cease to remain owing by the Company. The payment of any unclaimed dividend or other moneys payable in respect of a share may (but need not) be paid by the Company into an account separate from the Company's own account. Such payment shall not constitute the Company a trustee in respect thereof.

17.5 The Company shall be entitled to cease sending dividend cheques and warrants by post or otherwise to a Member if those instruments have been returned undelivered to, or left uncashed by, that Member on at least two consecutive occasions, or, following one such occasion, reasonable enquiries have failed to establish the Member's new address. The entitlement conferred on the Company by this Bye-law 17.5 in respect of any Member shall cease if the Member claims a dividend or cashes a dividend cheque or warrant.

18 Capitalisation 18.1 The Board may resolve to capitalise any amount for the time being standing to the credit

of any of the Company's share premium or other reserve accounts or to the credit of the profit and loss account or otherwise available for distribution by applying such amount in paying up unissued shares to be allotted as fully paid bonus shares pro-rata (except in connection with the conversion of shares of one class to shares of another class) to the Members.

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18.2 The Board may capitalise any amount for the time being standing to the credit of a reserve account or amounts otherwise available for dividend or distribution by applying such amounts in paying up in full partly or nil paid shares of those Members who would have been entitled to such amounts if they were distributed by way of dividend or distribution.

MEETINGS OF MEMBERS

19 Annual General Meetings Notwithstanding the provisions of the Act entitling the Members of the Company to elect to

dispense with the holding of an annual general meeting, an annual general meeting shall be held in each year (other than the year of incorporation) at such time and place as the Chairman or the Board shall appoint.

20 Special General Meetings The Chairman or the Board may convene a special general meeting of the Company whenever

in their judgment such a meeting is necessary.

21 Requisitioned General Meetings The Board shall, on the requisition of Members holding at the date of the deposit of the

requisition not less than one-tenth of such of the paid-up share capital of the Company as at the date of the deposit carries the right to vote at general meetings of the Company, forthwith proceed to convene a special general meeting of the Company and the provisions of the Act shall apply.

22 Notice 22.1 At least 21 days notice of an annual general meeting shall be given to each Member

entitled to attend and vote thereat, stating the date, place and time at which the meeting is to be held, that the election of Directors will take place thereat, and as far as practicable, the other business to be conducted at the meeting.

22.2 At least 21 days notice of a special general meeting shall be given to each Member entitled to attend and vote thereat, stating the date, time, place and the general nature of the business to be considered at the meeting.

22.3 Subject to Bye-law 22.6, the Board may fix any date as the record date for determining the Members entitled to receive notice of and to vote at any general meeting.

22.4 A general meeting shall, notwithstanding that it is called on shorter notice than that specified in these Bye-laws, be deemed to have been properly called if it is so agreed by (i) all the Members entitled to attend and vote thereat in the case of an annual general meeting; and (ii) by a majority in number of the Members having the right to attend and vote at the meeting, being a majority together holding not less than 95% in nominal value of the shares giving a right to attend and vote thereat in the case of a special general meeting.

22.5 The accidental omission to give notice of a general meeting to, or the non-receipt of a notice of a general meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.

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22.6 Notwithstanding any other provisions of these Bye-laws, in relation to any general

meeting, or any class meeting of the Members or any adjourned meeting or any poll taken at a meeting or adjourned meeting of which notice is given, the Board may specify in the notice of the meeting or adjourned meeting 01' in any document sent to the Members by or on behalf of the Board in relation to the meeting, a time and date (a "Record Date") which is not more than five (5) days before the date fixed for the meeting (the "Meeting Date") and notwithstanding any provision in these Bye-laws to the contrary, in such case:

(a) each person entered in the Register of Members at the Record Date as a Member, or a Member of the relevant class (a "Record Date Holder") shall be entitled to attend and vote at the relevant meeting and to exercise all of the rights and privileges of a Member or a Member of the relevant class, as applicable, in relation to that meeting in respect of the shares, or the shares of the relevant class, registered in such Member's name in the Register of Members (including, for the avoidance of doubt, a branch register) at the Record Date;

(b) as regards any shares, or shares of the relevant class, which are registered in the name of a Record Date Holder at the Record Date but are not so registered at the Meeting Date (the "Relevant Shares"), each holder of any Relevant Shares at the meeting date shall be deemed to have irrevocably appointed that Record Date Holder as his proxy for the purpose of attending and voting in respect of those Relevant Shares at the relevant meeting (with power to appoint, or to authorise the appointment of, some other person as proxy), in such manner as the Record Date Holder in his absolute discretion may determine;

(c) accordingly, except through his proxy pursuant to this Bye-law 22.6, a holder of Relevant Shares at the meeting date who is not a Record Date Holder, shall not be entitled to attend or to vote at the relevant meeting, or to exercise any of the rights or privileges of a Member or a Member of the relevant class, in respect of the Relevant Shares at that meeting; and

(d) the entry of the name of a person in the Register of Members as a Record Date Holder shall be sufficient evidence of his appointment as proxy in respect of any Relevant Shares for the purposes of this Bye-law 22.6, but all the provisions of these Bye-laws relating to execution and deposit of an instrument appointing a proxy or any ancillary matter (including the Board's powers and discretions relevant to such matter) shall apply to any instrument appointing any person other than the Record Date Holder as proxy in respect of any Relevant Shares.

22.7 Notwithstanding any other provisions in these Bye-laws, no Member shall be entitled to attend any general meeting unless notice in writing of the intention to attend and vote in person or by proxy signed by or on behalf of the Member (together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof) addressed to the Secretary is deposited (by post, courier, facsimilie transmission or other electronic means) at the registered office of the Company at least 48 hours before the time appointed for holding the general meeting or the adjournment thereof.

23 Giving Notice 23.1 A notice may be given by the Company to a Member:

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(a) by delivering it to such Member in person, in which case the notice shall be deemed

to have been served upon such delivery; or

(b) by sending it by post to such Memberls address in the Register of Members, in which case the notice shall be deemed to have been served five days after the date on which it is deposited, with postage prepaid, in the mail; or

(c) by sending it by courier to such Member's address in the Register of members, in which case the notice shall be deemed to have been served two days after the date on which it is deposited, with courier fees paid, with the courier service; or

(d) by transmitting it by electronic means (including facsimile and electronic mail, but not telephone) in accordance with such directions as may be given by such Member to the Company for such purpose, in which case the notice shall be deemed to have been served at the time that it would in the ordinary course be transmitted; or

(e) by delivering it in accordance with the provisions of the Act pertaining to delivery of electronic records by publication on a website, in which case the notice shall be deemed to have been served at the time when the requirements of the Act in that regard have been met.

23.2 Any notice required to be given to a Member shall, with respect to any shares held jointly by two or more persons, be given to whichever of such persons is named first in the Register of Members and notice so given shall be sufficient notice to all the holders of such shares.

23.3 In proving service under Bye-laws 23,1(b), (c) and (d), it shall be sufficient to prove that the notice was properly addressed and prepaid, if posted or sent by courier, and the time when it was posted, deposited with the courier, or transmitted by electronic means.

24 Postponement or Cancellation of General Meeting The Secretary may, and on the instruction of the Chairman, the Secretary shall, postpone or

cancel any general meeting called in accordance with these Bye-laws (other than a meeting requisitioned under these Bye-laws) provided that notice of postponement or cancellation is given to the Members before the time for such meeting. Fresh notice of the date, time and place for the postponed or cancelled meeting shall be given to each Member in accordance with these Bye-laws.

25 Attendance and Security at General Meetings 25.1 Members may participate in any general meeting by such telephonic, electronic or other

communication facilities or means as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

25.2 The Board may, and at any general meeting, the chairman of such meeting may make any arrangement and impose any requirement or restriction it or he considers appropriate to ensure the security of a general meeting including, without limitation, requirements for evidence of identity to be produced by those attending the meeting, the searching of their personal property and the restriction of items that may be taken into the meeting place. The Board and, at any general meeting, the chairman of such meeting are entitled to refuse entry to a person who refuses to comply with any such arrangements, requirements or restrictions.

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26 Quorum at General Meetings 26.1 At any general meeting two or more persons present in person or by proxy throughout

the meeting shall form a quorum for the transaction of business.

26.2 If within half an hour from the time appointed for the meeting a quorum is not present, then, in the case of a meeting convened on a requisition, the meeting shall be deemed cancelled and, in any other case, the meeting shall stand adjourned to the same day one week later, at the same time and place or to such other day, time or place as the Secretary may determine. Unless the meeting is adjourned to a specific date, time and place announced at the meeting being adjourned, fresh notice of the resumption of the meeting shall be given to each Member entitled to attend and vote thereat in accordance with these Bye-laws.

27 Chairman to Preside Unless otherwise agreed by a majority of those attending and entitled to vote thereat, the

Chairman, shall act as chairman of the meeting at all general meetings at which such person is present. In the Chairman's absence a chairman of the meeting shall be appointed or elected by those present at the meeting and entitled to vote.

28 Voting on Resolutions 28.1 Subject to the Act and these Bye-laws, any question proposed for the consideration of

the Members at any general meeting shall be decided by the affirmative votes of a majority of the votes cast in accordance with these Bye-laws and in the case of an equality of votes the resolution shall fail

28.2 At any general meeting a resolution put to the vote of the meeting shall, in the first instance, be voted upon by a show of hands and, subject to any rights or restrictions for the time being lawfully attached to any class of shares and subject to the provisions of these Bye-laws, every Member present in person and every person holding a valid proxy at such meeting shall be entitled to one vote and shall cast such vote by raising his or her hand.

28.3 In the event that a Member participates in a general meeting by telephone, electronic or other communication facilities or means, the chairman of the meeting shall direct the manner in which such Member may cast his vote on a show of hands.

28.4 At any general meeting if an amendment shall be proposed to any resolution under consideration and the chairman of the meeting rules on whether or not the proposed amendment is out of order, the proceedings on the substantive resolution shall not be invalidated by any error in such ruling.

28.5 At any general meeting a declaration by the chairman of the meeting that a question proposed for consideration has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in a book containing the minutes of the proceedings of the Company shall, subject to these Bye-laws, be conclusive evidence of that fact.

29 Power to Demand a Vote on a Poll 29.1 Notwithstanding the foregoing, a poll may be demanded by any of the following persons:

(a) the chairman of such meeting; or

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(b) at least three Members present in person or represented by proxy; or

(c) any Member or Members present in person or represented by proxy and holding

between them not less than one-tenth of the total voting rights of all the Members having the right to vote at such meeting; or

(d) any Member or Members present in person or represented by proxy holding shares in the Company conferring the right to vote at such meeting, being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total amount paid up on all such shares conferring such right.

29.2 Where a poll is demanded, subject to any rights or restrictions for the time being lawfully attached to any class of shares, every person present at such meeting shall have one vote for each share of which such person is the holder or for which such person holds a proxy and such vote shall be counted by ballot as described herein, or in the case of a general meeting at which one or more Members are present by telephone, electronic or other communication facilities or means, in such manner as the chairman of the meeting may direct and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded and shall replace any previous resolution upon the same matter which has been the subject of a show of hands. A person entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way.

29.3 A poll demanded for the purpose of electing a chairman of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time and in such manner during such meeting as the chairman (or acting chairman) of the meeting may direct. Any business other than that upon which a poll has been demanded may be conducted pending the taking of the poll.

29.4 Where a vote is taken by poll, each person physically present and entitled to vote shall be furnished with a ballot paper on which such person shall record his vote in such manner as shall be determined at the meeting having regard to the nature of the question on which the vote is taken, and each ballot paper shall be signed or initialled or otherwise marked so as to identify the voter and the registered holder in the case of a proxy. Each person present by telephone, electronic or other communication facilities or means shall cast his vote in such manner as the chairman of the meeting shall direct. At the conclusion of the poll, the ballot papers and votes cast in accordance with such directions shall be examined and counted by a committee of not less than two Members or proxy holders appointed by the chairman of the meeting for the purpose and the result of the poll shall be declared by the chairman of the meeting.

30 Voting by Joint Holders of Shares In the case of joint holders, the vote of the senior who tenders a vote (whether in person or by

proxy) shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members.

31 Instrument of Proxy 31.1 A Member may appoint a proxy by (a) an instrument appointing a proxy in writing in

substantially the following form or such other form as the Board may determine from time to time:

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Proxy

Avance Gas Holding Ltd (the "Company")

I/We, [insert names here], being a Member of the Company with [number] shares, HEREBY APPOINT [name] of [address] or failing him, [name] of [address] to be my/our proxy to vote for me/us at the meeting of the Members to be held on [date] and at any adjournment thereof. (Any restrictions on voting to be inserted here).

Signed this [date]

Member(s)

or (b) such telephonic, electronic or other means as may be approved by the Board from time to time.

31.2 The appointment of a proxy must be received by the Company at the registered office or at such other place or in such manner as is specified in the notice convening the meeting or in any instrument of proxy sent out by the Company in relation to the meeting at which the person named in the appointment proposes to vote, and an appointment of proxy which is not received in the manner so permitted shall be invalid.

31.3 A Member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf in respect of different shares.

31.4 The decision of the chairman of any general meeting as to the validity of any appointment of a proxy shall be final.

32 Representation of Corporate Member 32.1 A corporation which is a Member may, by written instrument, authorise such person or

persons as it thinks fit to act as its representative at any meeting of the Members and any person so authorised shall be entitled to exercise the same powers on behalf of the corporation which such person represents as that corporation could exercise if it were an individual Member, and that Member shall be deemed to be present in person at any such meeting attended by its authorised representative or representatives.

32.2 Notwithstanding the foregoing, the chairman of the meeting may accept such assurances as he thinks fit as to the right of any person to attend and vote at general meetings on behalf of a corporation which is a Member.

33 Adjournment of General Meeting 33.1 The chairman of a general meeting at which a quorum is present may, with the consent

of the Members holding a majority of the voting rights of those Members present in person or by proxy (and shall if so directed by Members holding a majority of the voting rights of those Members present in person or by proxy), adjourn the meeting.

33.2 The chairman of a general meeting may adjourn a meeting to another time and place without the consent or direction of the Members if it appears to him that:

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(a) it is likely to be impracticable to hold or continue that meeting because of the

number of Members wishing to attend who are not present; or

(b) the unruly conduct of persons attending the meeting prevents, or is likely to prevent, the orderly continuation of the business of the meeting; or

(c) an adjournment is otherwise necessary so that the business of the meeting may be properly conducted.

33.3 Unless the meeting is adjourned to a specific date, place and time announced at the meeting being adjourned, fresh notice of the date, place and time for the resumption of the adjourned meeting shall be given to each Member entitled to attend and vote thereat in accordance with these Bye-laws.

34 Written Resolutions 34.1 Subject to these Bye-laws, anything which may be done by resolution of the Company in

general meeting or by resolution of a meeting of any class of the Members may be done, without a meeting by written resolution in accordance with these Bye-laws.

34.2 Notice of a written resolution shall be given, and a copy of the resolution shall be circulated to all Members who would be entitled to attend a meeting and vote thereon. The accidental omission to give notice to, or the non-receipt of a notice by, any Member does not invalidate the passing of a resolution.

34.3 A written resolution is passed when it is signed by (or in the case of a Member that is a corporation, on behalf of) the Members who at the date that the notice is given represent such majority of votes as would be required if the resolution was voted on at a meeting of Members at which all Members entitled to attend and vote thereat were present and voting.

34.4 A resolution in writing may be signed in any number of counterparts.

34.5 A resolution in writing made in accordance with this Bye-law is as valid as if it had been passed by the Company in general meeting or by a meeting of the relevant class of Members, as the case may be, and any reference in any Bye-law to a meeting at which a resolution is passed or to Members voting in favour of a resolution shall be construed accordingly.

34.6 A resolution in writing made in accordance with this Bye-law shall constitute minutes for the purposes of the Act.

34.7 This Bye-law shall not apply to:

(a) a resolution passed to remove an auditor from office before the expiration of his term of office; or

(b) a resolution passed for the purpose of removing a Director before the expiration of his term of office.

34.8 For the purposes of this Bye-law, the effective date of the resolution is the date when the

resolution is signed by, (or in the case of a Member that is a corporation, on behalf of,) the last Member whose signature results in the necessary voting majority being achieved

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and any reference in any Bye-law to the date of passing of a resolution is, in relation to a resolution made in accordance with this Bye-law, a reference to such date.

35 Directors’ Attendance at General Meetings The Directors shall be entitled to receive notice of, attend and be heard at any general meeting.

DIRECTORS AND OFFICERS

36 Election of Directors 36.1 The Board shall consist of such number of Directors being not less than three Directors

and not more than mne Directors as it may determine or such other minimum and maximum numbers as the Members may from time to time determine. The Board shall be elected or appointed at the annual general meeting of the Members or at any special general meeting of the Members called for that purpose.

36.2 Where the number of persons validly proposed for re-election or election as a Director is greater than the number of Directors to be elected, the persons receiving the most votes (up to the number of Directors to be elected) shall be elected as Directors, and an absolute majority of the votes cast shall not be a prerequisite to the election of such Directors.

36.3 Only persons who are proposed or nominated in accordance with this Bye-law shall be eligible for election as Directors, Any Member, the Board or the nomination committee may propose any person for re-election or election as a Director. Where any person, other than a Director retiring at the meeting or a person proposed for reelection or election as a Director by the Board or the nomination committeez is to be proposed for election as a Director, notice must be given to the Company of the intention to propose him and of his willingness to serve as a Director. Whether a Director is to be elected at an annual general meeting or a special general meeting, that notice must be given not less than 10 days before the date of such general meeting.

36.4 The Company in general meeting may appoint a nomination committee (the “nomination committee”), comprising such number of persons as the Members may determine in general meeting from time to time, and members of the nomination committee shall be appointed by resolution or the Members. Members, the Board and members of the nomination committee may suggest candidates for the election of Directors and members of the nomination committee to the nomination committee provided such suggestions are in accordance with any nomination committee guidelines or corporate governance rules adopted by the Company in general meeting from time to time and Members, Directors and the nomination committee may also propose any person for election as a Director in accordance with Bye-laws 36.2 and 36.3. The nomination committee may or may not recommend any candidates suggested or proposed by any Member, the board or any member of the nomination committee in accordance with any nomination committee guidelines or corporate governance rules adopted by the Company in general meeting from time to time. The nomination committee may provide recommendations on the suitability of candidates for the board and the nomination committee, as well as the remuneration of the members of the Board and the nomination committee. The Members at any general meeting may stipulate guidelines for the duties of the nomination committee.

36.5 At any general meeting the Members may authorise the Board to fill any vacancy in their number left unfilled at a general meeting.

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37 Term of Office of Directors Directors shall hold office for a term as the Members may determine or, in the absence of such

determination, until the next annual general meeting or until their successors are elected or appointed or their office is otherwise vacated.

38 Alternate Directors 38.1 At any general meeting, the Members may elect a person or persons to act as a Director

in the alternative to any one or more Directors or may authorise the Board to appoint such Alternate Directors.

38.2 Unless the Members otherwise resolve, any Director may appoint a person or persons to act as a Director in the alternative to himself by notice deposited with the Secretary.

38.3 Any person elected or appointed pursuant to this Bye-law shall have all the rights and powers of the Director or Directors for whom such person is elected or appointed in the alternative, provided that such person shall not be counted more than once in determining whether or not a quorum is present.

38.4 An Alternate Director shall be entitled to receive notice of all Board meetings and to attend and vote at any such meeting at which a Director for whom such Alternate Director was appointed in the alternative is not personally present and generally to perform at such meeting all the functions of such Director for whom such Alternate Director was appointed.

38.5 An Alternate Director's office shall terminate —

(a) in the case of an alternate elected by the Members:

(i) on the occurrence in relation to the Alternate Director of any event which, if it occurred in relation to the Director for whom he was elected to act, would result in the termination of that Director; or

(ii)if the Director for whom he was elected in the alternative ceases for any reason to be a Director, provided that the alternate removed in these circumstances may be re-appointed by the Board as an alternate to the person appointed to fill the vacancy; and

(b) in the case of an alternate appointed by a Director:

(i) on the occurrence in relation to the Alternate Director of any event which, if it occurred in relation to his appointor, would result in the termination of the appointor's directorship; or

(ii) when the Alternate Director's appointor revokes the appointment by notice to the Company in writing specifying when the appointment is to terminate; or

(iii) if the Alternate Director's appointor ceases for any reason to be a Director.

39 Removal of Directors 39.1 Subject to any provision to the contrary in these Bye-laws, the Members entitled to vote

for the election of Directors may, at any special general meeting convened and held in accordance with these Bye-laws, remove a Director, provided that the notice of any such meeting convened for the purpose of removing a Director shall contain a statement of the intention so to do and be served on such Director not less than 14 days before the meeting and at such meeting the Director shall be entitled to be heard on the motion for such Director’s removal.

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39.2 If a Director is removed from the Board under this Bye-law the Members may fill the

vacancy at the meeting at which such Director is removed. In the absence of such election or appointment, the Board may fill the vacancy.

40 Vacancy in the Office of Director 40.1 The office of Director shall be vacated if the Director:

(a) is removed from office pursuant to these Bye-laws or is prohibited from being a

Director by law;

(b) is or becomes bankrupt, or makes any arrangement or composition with his creditors generally;

(c) is or becomes of unsound mind or dies; or

(d) resigns his office by notice to the Company.

40.2 The Members in general meeting or the Board shall have the power to appoint any person as a Director to fill a vacancy on the Board occurring as a result of the death, disability, disqualification or resignation of any Director or as a result of an increase in the size of the Board and to appoint an Alternate Director to any Director so appointed.

41 Remuneration of Directors The remuneration (if any) of the Directors shall be determined by the Company in general

meeting and shall be deemed to accrue from day to day. The Directors may also be paid all travel, hotel and other expenses properly incurred by them (or in the case of a director that is a corporation, by their representative or representatives) in attending and returning from the meetings of the Board, any committee appointed by the Board, general meetings of the Company, or in connection with the business of the Company or their duties as Directors generally.

42 Defect in Appointment All acts done in good faith by the Board, any Director, a member of a committee appointed by

the Board, any person to whom the Board may have delegated any of its powers, or any person acting as a Director shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any Director or person acting as aforesaid, or that he was, or any of them were, disqualified, be as valid as if every such person had been duly appointed and was qualified to be a Director or act in the relevant capacity.

43 Directors to Manage Business The business of the Company shall be managed and conducted by the Board. In managing the

business of the Company, the Board may exercise all such powers of the Company as are not, by the Act or by these Bye-laws, required to be exercised by the Company in general meeting.

44 Powers of the Board of Directors The Board may: (a) appoint, suspend, or remove any manager, secretary, clerk, agent or employee of the

Company and may fix their remuneration and determine their duties;

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(b) exercise all the powers of the Company to borrow money and to mortgage or

charge or otherwise grant a security interest in its undertaking, property and uncalled capital, or any part thereof, and may issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or any third party;

(c) appoint one or more Directors to the office of managing director or chief executive officer of the Company, who shall, subject to the control of the Board, supervise and administer all of the general business and affairs of the Company;

(d) appoint a person to act as manager of the Company's day-to-day business and may

entrust to and confer upon such manager such powers and duties as it deems appropriate for the transaction or conduct of such business;

(e) by power of attorney, appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Board, to be an attorney of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board) and for such period and subject to such conditions as it may think fit and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board may think fit and may also authorise any such attorney to subdelegate all or any of the powers, authorities and discretions so vested in the attorney;

(f) procure that the Company pays all expenses incurred in promoting and

incorporating the Company and listing of the shares of the Company;

(g) delegate any of its powers (including the power to sub-delegate) to a committee of one or more persons appointed by the Board which may consist partly or entirely of -non-Directors, provided that every such committee shall conform to such directions as the Board shall impose on them and provided further that the meetings and proceedings of any such committee shall be governed by the provisions of these Bye-laws regulating the meetings and proceedings of the Board, so far as the same are applicable and are not superseded by directions imposed by the Board;

(h) delegate any of its powers (including the power to sub-delegate) to any person on such terms and in such manner as the Board may see fit;

(i) present any petition and make any application in connection with the liquidation or reorganisation of the Company;

(j) in connection with the issue of any share, pay such commission and brokerage as may be permitted by law;

(k) authorise any company, firm, person or body of persons to act on behalf of the Company for any specific purpose and in connection therewith to execute any deed, agreement, document or instrument on behalf of the Company; and

(l) take all necessary or desirable actions within its control to ensure that the Company is not deemed to be a Controlled Foreign Company as such term is defined pursuant to Norwegian tax legislation.

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45 Register of Directors and Officers The Board shall cause to be kept in one or more books at the registered office of the Company a

Register of Directors and Officers and shall enter therein the particulars required by the Act.

46 Appointment of Officers The Chairman shall be appointed by the Members from amongst the Directors, The Board may

appoint such other Officers (who may or may not be Directors) as the Board may determine for such terms as the Board deems fit.

47 Appointment of Secretary The Secretary shall be appointed by the Board from time to time for such term as the Board

deems fit.

48 Duties of Officers The Officers shall have such powers and perform such duties in the management, business and

affairs of the Company as may be delegated to them by the Board from time to time.

49 Remuneration of Officers The Officers shall receive such remuneration as the Board may determine.

50 Conflicts of Interest 50.1 Any Director, or any Director's firm, partner or any company with whom any Director is

associated, may act in any capacity for, be employed by or render services to the Company on such terms, including with respect to remuneration, as may be agreed between the parties. Nothing herein contained shall authorise a Director or a Director's firm, partner or company to act as Auditor to the Company.

50.2 A Director who is directly or indirectly interested in a contract or proposed contract with the Company shall declare the nature of such interest as required by the Act.

50.3 Following a declaration being made pursuant to this Bye-law, and unless disqualified by the chairman of the relevant Board meeting, a Director may vote in respect of any contract or proposed contract or arrangement in which such Director is interested and may be counted in the quorum for such meeting.

50.4 Notwithstanding Bye-law 50.3 and save as provided herein, a Director shall not vote, be counted in the quorum or act as chairman at a meeting in respect of (A) his appointment to hold any office or place of profit with the Company or any body corporate or other entity in which the Company owns an equity interest or (B) the approval of the terms of any such appointment or of any contract or arrangement in which he is materially interested (otherwise than by virtue of his interest in shares, debentures or other securities of the Company), provided that, a Director shall be entitled to vote (and be counted in the quorum and act as chairman) In respect of any resolution concerning any of the following matters, namely:

(a) the giving of any security, guarantee or indemnity to him in respect of money lent or obligations incurred by him for the benefit of the Company; or

(b) any proposal concerning any other body corporate in which he is interested directly or indirectly, whether as an officer, Shareholder, creditor or otherwise, provided that he is not the holder of or beneficially interested (other than as a bare custodian or trustee in respect of shares in which he has no beneficial interest) in more than

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1% of any class of the issued share capital of such body corporate (or of any third body corporate through which his interest is derived) or of the voting rights attached to all of the issued shares of the relevant body corporate (any such interest being deemed for the purpose of this Bye-law to be a material interest in all circumstances); and in the case of an Alternate Director, an interest of a Director for whom he is acting as alternate shall be treated as an interest of such Alternate Director in addition to any interest which the Alternate Director may otherwise have.

50.5 If any question shall arise at any meeting as to the materiality of a Director's interest or as

to the entitlement of any Director to vote, and such question is not resolved by such Director voluntarily agreeing to abstain from voting and not be counted in the quorum of such meeting, such question shall be referred to the chairman of the meeting (except in the event the Director is also the chairman of the meeting, in which case the question shall be referred to the other Directors present at the meeting) and his (or their, as the case may be) ruling in relation to such Director shall be final and conclusive, except in a case where the nature or extent of the interest of the Director concerned has not been fully disclosed.

51 Indemnification and Exculpation of Directors and Officers 51.1 The Directors, Resident Representative, Secretary and other Officers (such term to

include any person appointed to any committee by the Board and the Chairman) acting in relation to any of the affairs of the Company or any subsidiary thereof and the liquidator or trustees (if any) acting in relation to any of the affairs of the Company or any subsidiary thereof and every one of them (whether for the time being or formerly), and their heirs, executors and administrators (each of which an “indemnified party"), shall be indemnified and secured harmless out of the assets of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their heirs, executors or administrators, shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty, or supposed duty, or in their respective offices or trusts, and no indemnified party shall be answerable for the acts, receipts, neglects or defaults of the others of them or for joining in any receipts for the sake of conformity, or for any bankers or other persons with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody, or for insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out on or invested, or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts, or in relation thereto, PROVIDED THAT this indemnity shall not extend to any matter in respect of any fraud or dishonesty in relation to the Company which may attach to any of the indemnified parties. Each Member agrees to waive any claim or right of action such Member might have, whether individually or by or in the right of the Company, against any Director or Officer on account of any action taken by such Director or Officer, or the failure of such Director or Officer to take any action in the performance of his duties with or for the Company or any subsidiary thereof, PROVIDED THAT Such waiver shall not extend to any matter in respect of any fraud or dishonesty in relation to the Company which may attach to such Director or Officer.

51.2 The Company may purchase and maintain insurance for the benefit of any Director or Officer against any liability incurred by him under the Act in his capacity as a Director or Officer or indemnifying such Director or Officer in respect of any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach

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of duty or breach of trust of which the Director or Officer may be guilty in relation to the Company or any subsidiary thereof.

51.3 The Company may advance moneys to a Director or Officer for the costs, charges and expenses incurred by the Director or Officer in defending any civil or criminal proceedings against him, on condition that the Director or Officer shall repay the advance if any allegation of fraud or dishonesty in relation to the Company is proved against him.

MEETINGS OF THE BOARD OF DIRECTORS

52 Board Meetings The Board may meet for the transaction of business, adjourn and otherwise regulate its meetings

as it sees fit. A resolution put to the vote at a Board meeting shall be carried by the affirmative votes of a majority of the votes cast and in the case of an equality of votes the resolution shall fail.

53 Notice of Board Meetings A Director may, and the Secretary on the requisition of a Director shall, at any time summon a

Board meeting. Notice of a Board meeting shall be deemed to be duly given to a Director if it is given to such Director verbally (including in person or by telephone) or otherwise communicated or sent to such Director by post, electronic means or other mode of representing words in a visible form at such Director's last known address or in accordance with any other instructions given by such Director to the Company for this purpose.

54 Electronic Participation in Meetings by Telephone Directors may participate in any meeting by such telephonic, electronic or other communication

facilities or means as permit all persons participating in the meeting to communicate with each other simultaneously and Instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

55 Quorum at Board Meetings The quorum necessary for the transaction of business at a Board meeting shall be a majority of

the Directors then in office.

56 Board to Continue in the Event of Vacancy The Board may act notwithstanding any vacancy in its number but, if and so long as its number

is reduced below the number fixed by these Bye-laws as the quorum necessary for the transaction of business at Board meetings, the continuing Directors or Director may act for the purpose of (i) summoning a general meeting; or (ii) preserving the assets of the Company.

57 Chairman to Preside Unless otherwise agreed by a majority of the Directors attending, the Chairman shall act as

chairman at all Board meetings at which such person is present. In their absence a chairman of the meeting shall be appointed or elected by the Directors present at the meeting.

58 Written Resolutions A resolution signed by all the Directors, which may be in counterparts, shall be as valid as if it

had been passed at a Board meeting duly called and constituted, such resolution to be effective on the date on which the resolution is signed by the last Director. For the purposes of this Bye-law only, "the Directors" shall not include, an Alternate Director.

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59 Validity of Prior Acts of the Board No regulation or alteration to these Bye-laws made by the Company in general meeting shall invalidate any prior act of the Board which would have been valid if that regulation or alteration had not been made.

CORPORATE RECORDS

60 Minutes The Board shall cause minutes to be duly entered in books provided for the purpose:

(a) of all elections and appointments of Officers;

(b) of the names of the Directors present at each Board meeting and of any committeeappointed by the Board; and

(c) of all resolutions and proceedings of general meetings of the Members, Boardmeetings, and meetings of managers and of committees appointed by the Board.

61 Place Where Corporate Records Kept Minutes prepared in accordance with the Act and these Bye-laws shall be kept by the Secretary at the registered office of the Company.

62 Form and Use of Seal 62.1 The Company may adopt a seal in such form as the Board may determine. The Board

may adopt one or more duplicate seals for use in or outside Bermuda.

62.2

62.3

A seal may, but need not, be affixed to any deed, instrument or document, and if the seal is to be affixed thereto, it shall be attested by the signature of (i) any Director, or (ii) any Officer, or (iii) the Secretary, or (iv) any person authorised by the Board for that purpose.

A Resident Representative may, but need not, affix the seal of the Company to certify the authenticity of any expenses of documents.

ACCOUNTS

63 Records of Account 63.1 The Board shall cause to be kept proper records of account with respect to all

transactions of the Company and in particular with respect to:

(a) all amounts of money received and expended by the Company and the matters inrespect of which the receipt and expenditure relates;

(b) all sales and purchases of goods by the Company; and

(c) all assets and liabilities of the Company.

63.2 Such records of account shall be kept at the registered office of the Company or subject to the Act, at such other place as the Board thinks fit and shall be available for inspection by the Directors during normal business hours.

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63.3 Such records of account shall be retained for a minimum period of five years from the

date on which they are prepared.

64 Financial Year End The financial year end of the Company may be determined by resolution of the Board and

failing such resolution shall be 30 November in each year.

AUDITS

65 Annual Audit Subject to any rights to waive laying of accounts or appointment of an Auditor pursuant to the

Act, the accounts of the Company shall be audited at least once in every year.

66 Appointment of Auditors 66.1 Subject to the Act, the Members shall appoint an auditor to the Company to hold office

for such term as the Members deem fit or until a successor is appointed.

66.2 The Auditor may be a Member but no Director, Officer or employee of the Company shall, during his continuance in office, be eligible to act as an Auditor of the Company.

67 Remuneration of Auditor 67.1 The remuneration of an Auditor appointed by the Members shall be fixed by the

Company in general meeting or in such manner as the Members may determine.

67.2 The remuneration of an Auditor appointed by the Board to fill a casual vacancy in accordance with these Bye-laws shall be fixed by the Board.

68 Duties of Auditors 68.1 The financial statements provided for by these Bye-laws shall be audited by the Auditor

in accordance with generally accepted auditing standards. The Auditor shall make a written report thereon in accordance with generally accepted auditing standards.

68.2 The generally accepted auditing standards referred to in this Bye-law may be those of a country or jurisdiction other than Bermuda or such other generally accepted auditing standards as may be provided for in the Act. If so, the financial statements and the report of the Auditor shall identify the generally accepted auditing standards used

69 Access to Records The Auditor shall at all reasonable times have access to all books kept by the Company and to all

accounts and vouchers relating thereto, and the Auditor may call on the Directors or Officers for any information in their possession relating to the books or affairs of the Company.

70 Financial Statements and the Auditors Report 70.1 Subject to the following Bye-law, financial statements and/or the auditor's report as

required by the Act shall:

(a) be laid before the Members at the annual general meeting; or

(b) be received, accepted, adopted, approved or otherwise acknowledged by the members by written resolution passed in accordance with these Bye-laws.

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70.2 If all Members and Directors shall agree, either in writing or at a meeting, that in respect of a particular interval no financial statements and/or auditor's report thereon need be made available to the Members, and/or that no auditor shall be appointed then there shall be no obligation on the Company to do so.

71 Vacancy in the Office of Auditor The Board may fill any casual vacancy in the office of the auditor.

VOLUNTARY WINDING-UP AND DISSOLUTION

72 Winding-Up If the Company shall be wound up the liquidator may, with the sanction of a resolution of the Members, divide amongst the Members in specie or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in the trustees upon such trusts for the benefit of the Members as the liquidator shall think fit, but so that no Member shall be compelled to accept any shares or other securities or assets whereon there is any liability.

CHANGES TO CONSTITUTION

73 Changes to Bye-laws No Bye-law may be rescinded, altered or amended and no new Bye-law may be made until the same has been approved by a resolution of the Board and by a resolution of the Members.

74 Changes to the Memorandum of Association No alteration or amendment to the Memorandum of Association may be made save in accordance with the Act and until same has been approved by a resolution of the Board and by a resolution of the Members.

75 Discontinuance The Board may exercise all the powers of the Company to discontinue the Company to a jurisdiction outside Bermuda pursuant to the Act.

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APPENDIX B:

SUBSCRIPTION FORM FOR THE SUBSEQUENT OFFERING

B-1

AVANCE GAS HOLDING LTD SUBSEQUENT OFFERING

SUBSCRIPTION FORM Securities no. ISIN BMG067231032

General information: The terms and conditions of the subsequent offering (the "Subsequent Offering") by Avance Gas Holding Ltd (the "Company") of up to 2,500,000 new common

shares in the Company with a par value of USD 1.0 each (the "Offer Shares") are set out in the prospectus dated 26 October 2016 (the "Prospectus"). Terms defined in the Prospectus

shall have the same meaning in this subscription form (the "Subscription Form"). All announcements referred to in this Subscription Form will be made through the Oslo Stock

Exchange's information system under the Company's ticker "AVANCE".

Subscription procedures: The subscription period will commence at 09:00 hours (CET) on 27 October 2016 and end at 16:30 hours (CET) on 10 November 2016 (the "Subscription

Period"). Correctly completed subscription forms must be received by one of the subscription offices (the "Subscription Offices") set out below, or, in the case of online subscriptions,

be registered by no later than 16:30 hours (CET) on 10 November 2016:

Danske Bank, Bryggetorget 4, P.O. Box 1170 Sentrum, N-0107 Oslo, Norway, e-mail: [email protected];

DNB Markets, Registrars Department, Dronning Eufemias gate 30, P.O. Box 1600 Sentrum, N-0021 Oslo, Norway, email: [email protected];

Nordea Markets, Issuer Services, Essendropsgate 7, P.O. Box 1166 Sentrum, N-0107 Oslo, Norway, email: [email protected]; SEB, Filipstad Brygge, P.O. Box 1843 Vika, N-0123 Oslo, Norway, email: [email protected]; and

Swedbank Norge, Oppgjør Aksje, Filipstad Brygge 1, P.O. Box 1441 Vika, 0115 Oslo, Norway, email: [email protected].

The subscriber is responsible for the correctness of the information filled into the Subscription Form. Subscription Forms received after the end of the Subscription Period and/or

incomplete or incorrect Subscription Forms and any subscription that may be unlawful may be disregarded at the sole discretion of the Company and/or the Managers without notice to the subscriber.

Subscribers who are residents of Norway with a Norwegian personal identification number are encouraged to subscribe for Offer Shares through the VPS online subscription system by following the link on any of the following websites: www.danskebank.no/avance, www.dnb.no/emisjoner, www.nordea.no, www.seb.no

and www.swedbank.no (which will redirect the subscriber to the VPS online subscription system).

Subscriptions made through the VPS online subscription system must be duly registered before the expiry of the Subscription Period. None of the Company or the Managers may be

held responsible for postal delays, unavailable fax lines, internet lines or servers or other logistical or technical problems that may result in subscriptions not being received in time or

at all by the Subscription Offices. Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or modified by the subscriber after having been received by the Subscription Offices, or in the case of applications through the VPS online subscription system, upon registration of the subscription.

Subscription Price: The subscription price in the Subsequent Offering is NOK 17.00 per Offer Share (the "Subscription Price").

Subscription Rights: The shareholders of the Company holding less than 63,000 shares in the Company as of 20 October 2016 (and being registered as such in the VPS as of 24

October 2016 (the "Record Date")) (the "Elibible Shareholders"), will be granted non-transferable subscription rights (the "Subscription Rights"). Each Eligible Shareholder will be

granted 0.2385 Subscription Rights for every existing Share registered as held by such Eligible Shareholder on the Record Date. The number of Subscription Rights granted to each

Eligible Shareholder will be rounded down to the nearest whole Subscription Right. Subscription Rights will not be issued in respect of any existing Shares held in treasury by the Company. Each Subscription Right will, subject to certain limitations based on applicable laws and regulations, give the right to subscribe for, and be allocated, one Offer Share in the

Subsequent Offering. Over-subscription is permitted. Subscription without Subscription Rights is not permitted. Subscription Rights that are not used to subscribe for Offer

Shares before the expiry of the Subscription Period will have no value and will lapse without compensation to the holder.

Allocation of Offer Shares: The Offer Shares will be allocated to the subscribers based on the allocation criteria set out in the Prospectus. No fractional Offer Shares will be

allocated. The Company reserves the right to round off, reject or reduce any subscription for Offer Shares not covered by Subscription Rights. Allocation of fewer Offer Shares than

subscribed for by a subscriber will not impact on the subscriber's obligation to pay for the number of Offer Shares allocated. Notifications of allocated Offer Shares and the

corresponding subscription amount to be paid by each subscriber are expected to be distributed in a letter from the VPS on or about 11 November 2016. Subscribers having access to investor services through their VPS account manager will be able to check the number of Offer Shares allocated to them from 12:00 hours (CET) on 11 November 2016. Subscribers

who do not have access to investor services through their VPS account manager may contact one of the Subscription Offices from 12:00 hours (CET) on 11 November 2016 to obtain

information about the number of Offer Shares allocated to them.

Payment: The payment for the Offer Shares allocated to a subscriber falls due on 16 November 2016. Subscribers who have a Norwegian bank account must, and will by signing the

Subscription Form, or registering a subscription through the VPS online subscription system, provide the Settlement Agent, or someone appointed by the Settlement Agent, with a

one-time irrevocable authorisation to debit a specified bank account with a Norwegian bank for the amount payable for the Offer Shares which are allocated to the subscriber. The

specified bank account is expected to be debited on or after the Payment Date. The Settlement Agent, or someone appointed by the Settlement Agent, is only authorised to debit such account once, but reserves the right (but has no obligation) to make up to three debit attempts, and the authorisation will be valid for up to seven working days after the Payment

Date. Subscribers who do not have a Norwegian bank account must ensure that payment with cleared funds for the Offer Shares allocated to them is made on or before the Payment

Date. Prior to any such payment being made, the subscriber must contact the Settlement Agent for further details and instructions. Should any subscriber have insufficient funds on

his or her account, should payment be delayed for any reason, if it is not possible to debit the account of if payments for any other reasons are not made when due, overdue interest will accure and other terms will apply as set out under the heading "Overdue and missing payments" below.

SEE PAGE 2 OF THIS SUBSCRIPTION FORM FOR OTHER PROVISIONS THAT ALSO APPLY TO THE SUBSCRIPTION

DETAILS OF THE SUBSCRIPTION

Subscriber's VPS account: Number of Subscription Rights: Number of Offer Shares subscribed

(incl. over-subscription):

(For broker: consecutive no.):

SUBSCRIPTION RIGHT'S SECURITIES NUMBER: ISIN BMG067231032 Subscription Price per Offer Share:

NOK 17.00 Subscription amount to be paid:

NOK _________________

IRREVOCABLE AUTHORISATION TO DEBIT ACCOUNT (MUST BE COMPLETED BY SUBSCRIBERS WITH A NORWEGIAN BANK ACCOUNT)

Norwegian bank account to be debited for the payment for Offer

Shares allocated (number of Offer Shares allocated x NOK 17.00).

(Norwegian bank account no.)

I/we hereby irrevocably (i) subscribe for the number of Offer Shares specified above subject to the terms and conditions set out in this Subscription Form and in the Prospectus, (ii)

authorise and instruct each of the Managers (or someone appointed by them) acting jointly or severally to take all actions required to transfer such Offer Shares allocated to me/us to

the VPS Registrar and ensure delivery of the beneficial interests to such Offer Shares to me/us in the VPS, on my/our behalf, (iii) authorise the Settlement Agent to debit my/our bank

account as set out in this Subscription Form for the amount payable for the Offer Shares allocated to me/us and (iv) confirm and warrant to have read the Prospectus and that I/we

are eligible to subscribe for Offer Shares under the terms set forth therein.

Place and date

Must be dated in the Subscription Period.

Binding signature

The subscriber must have legal capacity. When signed on behalf of a company or

pursuant to an authorisation, documentation in the form of a company certificate

or power of attorney must be enclosed.

INFORMATION ON THE SUBSCRIBER – ALL FIELDS MUST BE COMPLETED

First name:

Surname/company:

Street address:

Post code/district/

Country:

Personal ID number/

organisation number:

Nationality:

E-mail address:

Daytime telephone

number:

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ADDITIONAL GUIDELINES FOR THE SUBSCRIBER

Regulatory issues: In accordance with the Markets in Financial Instruments Directive ("MiFID") of the European Union, Norwegian law imposes requirements in relation to business investments. In this respect, the Managers must categorize all new clients in one of three categories: eligible counterparties, professional clients and non-professional

clients. All subscribers in the Subsequent Offering who are not existing clients of one of the Managers will be categorized as non-professional clients. Subscribers can, by written

request to a Manager, ask to be categorized as a professional client if the subscriber fulfils the applicable requirements of the Norwegian Securities Trading Act. For further

information about the categorization, the subscriber may contact Danske Bank (Bryggetorget 4, P.O. Box 1170 Sentrum, N-0107 Oslo, Norway), DNB Markets, Registrars Department, Dronning Eufemias gate 30, P.O. Box 1600 Sentrum, N-0021 Oslo, Norway, Nordea Markets, Issuer Services, Essendropsgate 7, P.O. Box 1166 Sentrum, N-0368

Oslo, Norway, SEB, Filipstad Brygge, P.O. Box 1843 Vika, N-0123 Oslo, Norway or Swedbank Norge, Oppgjør Aksje, Filipstad Brygge 1, P.O. Box 1441 Vika, 0115 Oslo, Norway.

The subscriber represents that he/she/it is capable of evaluating the merits and risks of a decision to invest in the Company by subscribing for Offer Shares,

and is able to bear the economic risk, and to withstand a complete loss, of an investment in the Offer Shares.

Selling restrictions: Investors who wish to subscribe for Offer Shares should carefully review Section 18 "Selling and transfer restrictions" of the Prospectus. The Company is

not taking any action to permit a public offering of the Subscription Rights or the Offer Shares (pursuant to the exercise of the Subscription Rights or otherwise) in any

jurisdiction other than Norway. Receipt of the Prospectus will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those

circumstances, the Prospectus effecting is for information only and should not be copied or redistributed. Investors should consult their professional advisors as to whether they

require any governmental or other consent or need to observe any other formalities to enable them to subscribe for Offer Shares. It is the responsibility of any person wishing to subscribe for Offer Shares under the Subsequent Offering to satisfy himself or herself as to the full observance of the laws of any relevant jurisdiction in connection therewith,

including obtaining any governmental or other consent which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other

taxes due in such territories. The Subscription Rights and Offer Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended

(the "U.S. Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not and will not be offered, sold, exercised, pledged, resold, granted, delivered, allocated, taken up, transferred or delivered, directly or indirectly, within the United States, except pursuant to an applicable exemption

from the registration requirements of the U.S. Securities Act and in compliance with the applicable securities laws of any state or other jurisdiction of the United States. The

Subscription Rights and Offer Shares are being offered and sold outside the United States in reliance on Regulation S under the U.S. Securities Act. Any offering of the

Subscription Rights and Offer Shares by the Company to be made in the United States will be made only to a limited number of "qualified institutional buyers" (as defined in Rule 144A under the U.S. Securities Act) pursuant to an exemption from registration under the U.S. Securities Act, each of whom have executed and returned an investor letter

to the Company prior to exercising their Subscription Rights. Prospective purchasers are hereby notified that sellers of Offer Shares may be relying on an exemption from the

provisions of Section 5 of the U.S. Securities Act provided by Rule 144A. The Subscription Rights and Offer Shares have not been, and will not be, registered under applicable

securities laws of Australia, Canada, Hong Kong or Japan, and may not and will not be offered, sold, exercised, pledged, resold, granted, delivered, allocated, taken up,

transferred or delivered, directly or indirectly, in or into Australia, Canada, Hong Kong or Japan or in any other jurisdiction in which it would not be permissible to offer the Subscription Rights or the Offer Shares. A notification of exercise of Subscription Rights and subscription of Offer Shares in contravention of the above restrictions may be

deemed to be invalid. By subscribing for Offer Shares, persons effecting subscriptions will be deemed to have represented to the Company that they, and the persons on whose

behalf they are subscribing for the Offer Shares, have complied with the above selling restrictions. Persons effecting subscriptions on behalf of any person located in the United

States will be responsible for confirming that such person, or anyone acting on its behalf, has executed an investor letter in the form to be provided by a Manager upon request.

Execution only: The Managers will treat the Subscription Form as an execution-only instruction. The Managers are not required to determine whether an investment in the

Offer Shares is appropriate or not for the subscriber. Hence, the subscriber will not benefit from the protection of the relevant conduct of business rules in accordance with the

Norwegian Securities Trading Act.

Information exchange: The subscriber acknowledges that, under the Norwegian Securities Trading Act and the Norwegian Commercial Banks Act and foreign legislation applicable to the Managers there is a duty of secrecy between the different units of each of the Managers, as well as between Managers and the other entities in the Managers'

respective groups. This may entail that other employees of the Managers or the Managers' respective groups may have information that may be relevant to the subscriber and

to the assessment of the Offer Shares, but which the Managers will not have access to in their capacity as Managers for the Subsequent Offering.

Information barriers: The Managers are securities firms that offer a broad range of investment services. In order to ensure that assigments undertaken in the Managers' respective corporate finance departments are kept confidential, the Managers other activities, including analysis and stock brocking, are separated from the respective

Managers' corporate finance department by information walls. Consequently, the subscriber acknowledges that the Managers' analysis and stock broking activity may conflict

with the subscriber's interests with regard to transactions in the Shares, including the Offer Shares.

VPS account and mandatory anti-money laundering procedures: The Subsequent Offering is subject to applicable anti-money laundering legislation, including the

Norwegian Money Laundering Act of 6 March 2009 no. 11 and the Norwegian Money Laundering Regulations of 13 March 2009 no. 302 (collectively, the "Anti-Money Laundering Legislation"). Subscribers who are not registered as existing customers of the Managers must verify their identity to the Managers in accordance with requirements of the Anti-

Money Laundering Legislation, unless an exemption is applicable. Subscribers who have designated an existing Norwegian bank account and an existing VPS account on the

Subscription Form are exempted, unless verification of identity is requested by the Managers. Subscribers who have not completed the required verification of identity prior to

the expiry of the Subscription Period may not be allocated Offer Shares. Furthermore, participation in the Subsequent Offering is conditional upon the subscriber holding a VPS account. The VPS account number must be stated on the Subscription Form. VPS accounts can be established with authorised VPS registrars, which can be Norwegian banks,

authorised investments firms in Norway and Norwegian branches of credit institutions established within the EEA. However, investors may use nominee VPS accounts registered

in the name of a nominee. The nominee must be authorised by the Norwegian Ministry of Finance. Establishment of a VPS account requires verification of identification by the

relevant VPS registrar in accordance with the Anti-Money Laundering Legislation.

Terms and conditions for payment by direct debiting - securities trading: Payment by direct debiting is a service the banks in Norway provide in cooperation. In the

relationship between the payer and the payer's bank the following standard terms and conditions apply:

a) The service "Payment by direct debiting – securities trading" is supplemented by the account agreement between the payer and the payer's bank, in particular

Section C of the account agreement, General terms and conditions for deposit and payment instructions.

b) Costs related to the use of "Payment by direct debiting – securities trading" appear from the bank's prevailing price list, account information and/or information given in another appropriate manner. The bank will charge the indicated account for costs incurred.

c) The authorisation for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to its bank that in turn will

charge the payer's bank account.

d) In case of withdrawal of the authorization for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the Norwegian Financial Contracts Act the payer's bank shall assist if the payer withdraws a payment instruction that has not been completed. Such withdrawal may be regarded as a breach of the

agreement between the payer and the beneficiary.

e) The payer cannot authorise payment of a higher amount than the funds available on the payer's account at the time of payment. The payer's bank will normally

perform a verification of available funds prior to the account being charged. If the account has been charged with an amount higher than the funds available, the difference shall immediately be covered by the payer.

f) The payer's account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorisation for direct debiting, the

account will be charged as soon as possible after the beneficiary has delivered the instructions to its bank. The charge will not, however, take place after the

authorisation has expired as indicated above. Payment will normally be credited the beneficiary's account between one and three working days after the indicated date of payment/delivery.

g) If the payer's account is wrongfully charged after direct debiting, the payer's right to repayment of the charged amount will be governed by the account agreement

and the Norwegian Financial Contracts Act.

Overdue and missing payments: Overdue payments will be charged with interest at the applicable rate from time to time under the Norwegian Act on Interest on Overdue

Payment of 17 December 1976 no. 100, currently 8.50% per annum as at the date of this Prospectus. If a subscriber fails to comply with the terms of payment, the Offer Shares will, subject to the discretion of the Company, not be delivered to such subscriber.

In order to enable timely issuance of the Offer Shares in the Subsequent Offering, the Company may enter into a payment guarantee agreement with Danske Bank (the

"Payment Guarantor") which may cover the entire, or a portion of, the amount subscribed in the Subsequent Offering. Pursuant to such payment guarantee agreement, if

entered into, the Payment Guarantor will pay any subscription amounts not paid by subscribers when due, limited upwards to the guaranteed amount. The non-paying subscribers will remain fully liable for the subscription amount payable for the Offer Shares allocated to them, irrespective of such payment by the Payment Guarantor. The Offer

Shares allocated to such subscribers will be transferred to a VPS account operated by the Settlement Agent on behalf of the Payment Guarantor and will be transferred to the

non-paying subscriber when payment of the subscription amount for the relevant Offer Shares is received. However, the Payment Guarantor reserves the right to sell or assume

ownership of the Offer Shares from and including the fourth day after the Payment Date without further notice to the subscriber in question if payment has not been received within the third day after the Payment Date. If the Offer Shares are sold on behalf of the subscriber, the subscriber will be liable for any loss, costs, charges and expenses

suffered or incurred by the Company and/or the Payment Guarantor as a result of or in connection with such sales. The Company and/or the Payment Guarantor may enforce

payment for any amount outstanding in accordance with Norwegian law.

To the extent a payment guarantee agreement is not entered into or the Payment Guarantor decides not to assume ownership to the unpaid Offer Shares, the Settlement Agent,

on behalf of the Company, reserves the right, at the risk and cost of the subscriber to, at any time from and including the fourth day after the Payment Date, cancel the subscription and to reallocate or otherwise dispose of allocated Offer Shares for which payment is overdue, on such terms and in such manner as the Settlement Agent may

decide in accordance with Norwegian law. The subscriber will remain liable for payment of the subscription amount, together with any interest, costs, charges and expenses

accrued and the Settlement Agent, on behalf of the Company, may enforce payment for any such amount outstanding in accordance with Norwegian law.

B-3

Avance Gas Holding Ltd

Thistle House

4 Burnaby Street

Hamilton HM 11

Bermuda

Joint Bookrunners

ABN AMRO

Gustav Mahlerlaan 10

1082 PP Amsterdam

the Netherlands

Danske Bank

Bryggetorget 4

N-0107 Oslo

Norway

DNB Markets

Dronning Eufemias gate 30

N-0191 Oslo

Norway

Nordea Markets

Essendrops gate 7

N-0107 Oslo

Norway

Joint Managers

Credit Agricole Corporate and

Investment Bank

12, Place des Etats-Unis

CS 70052 - 92547 Montrouge Cedex

France

SEB

Filipstad Brygge 1

N-0252 Oslo

Norway

Swedbank

Filipstad Brygge 1

N-0252 Oslo

Norway

Legal Adviser to the Company

(as to Norwegian law)

Legal Adviser to the Company

(as to Bermuda law)

Advokatfirmaet Thommessen AS

Haakon VIIs gate 10

N-0161 Oslo

Norway

Appleby (Bermuda) Limited

Canon's Court

22 Victoria Street

Hamilton HM EX

Bermuda