Dubai shipping firm plans rights issue

03 January 2018
Shipping firm plans to double chemical tankers and offshore vessels fleet by 2020

Dubai Financial Market (DFM)-listed shipping firm Gulf Navigation Holding said it plans to increase its capital to AED1bn ($272m) by raising another AED448.3m through a rights issue in early 2018.

The total capital will be distributed over one billion shares at a par value of AED1 per share without an issuance premium.

The company’s shares slid by 3 per cent on 2 January, the same day it made the announcement.

Gulf Navigation said the move to increase its capital resulted from a comprehensive review of the company’s strategic expansion plans that aims at enhancing its competitiveness.

The company said it achieved a 12 per cent increase in the value of its assets, which reached  AED117m, in 2017.

“Increasing the capital … is one of the prime means to provide funds that supports the group’s previously announced strategic development plans, including … intentions to double its fleet size to become 20 vessels by 2020,” the company said in a statement. “The initial public offering (IPO) process will allow investors to benefit from the continued growth and the steady increase in profits which will be reflected positively on shareholders.”

The company  is staking its aggressive expansion plan on the over $140bn planned expansion of production facilities among the GCC’s petroleum and petrochemical  sectors over the next decade.

“We are confident that we have all the required expertise to win a large share of this market, and we plan to be ready by having the capabilities and the fleet size sufficient to keep up with this expansion,” Khamis Juma Buamim, managing director and group CEO of Gulf Navigation Holding, said.

In addition to the IPO, the firm plans a staged sukuk offering of $250m to fund its future expansion plans.

Gulf Navigation currently owns and operates a fleet of 10 chemical tankers and offshore vessels.

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