Firm plans to use proceeds of Islamic bond to fund expansion
UAE-based transportation firm Gulf Navigation Holding plans to raise $250m through sale of sharia-compliant bonds this year, its group chief executive has said.
The firm, the only shipping company listed on Dubai Financial Market (DFM), could approach the debt capital market in late August or early September, Khamis Juma Buamim told reporters at a press conference in Dubai, adding that the company has appointed local First Abu Dhabi Bank (FAB) to lead the transaction.
Gulf Navigation, which has revenues growth target of 300 per cent by 2021, will use the proceeds of sukuk to fund its expansion plans, he said.
The company appointed US-based Deloitte Consulting for an advisory contract on the acquisition of a huge maritime vessel in November. It currently maintains eight chemical tankers as well as four crew boats which are used in its shipping services business.
The company, which ran into financial trouble a few years ago, in February reached a settlement with DVB Bank, BNP Paribas, and DNB Bank on the debt it had raised to finance two very large crude carriers (VLCC).
The VLCCs were seized at international ports in 2013 after the company defaulted on the loan to finance them. The vessels, the Gulf Sheba and the Gulf Eyadah were later sold to DHT Holdings $98m in 2014, but the company continued to be in dispute with the lenders who helped it raise the syndicated facility.
The deal is part of the firm efforts to clear all its historical liabilities to allow the company to refocus its energy into exploring new horizons for growth in the maritime and shipping business, it said in a bourse statement at the time
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