Gulf Navigation plans $250 million sukuk issuance

Gulf Navigation’s chief executive Khamis Buamim, shown in a file photo above, declined to discuss the timing of the issuance or what the funds would be used for. Jeffrey E Biteng / The National

Gulf Navigation has floated plans for a $250 million sukuk issuance, after reaching a settlement agreement with creditors over troubled loans.

The sukuk will be issued via public offering, redeemable at a profit rate of less than 10 per cent, the Dubai-based shipper said in a statement on the Dubai stock exchange.

Gulf Navigation's chief executive, Khamis Buamim, declined to discuss the timing of the issuance or what the funds would be used for when contacted by The National, saying that more details would be shared following the plan's approval by shareholders.

The sukuk proposal is to be discussed at Gulf Navigation’s annual general meeting, scheduled for April 19 in Dubai, alongside the approval of its partnership with Polimar Turkish, announced in January.

Gulf Navigation shares rose by as much as 2 per cent in early Tuesday trading.

The company in February announced a settlement with a series of creditors over two defaulted loans, which had been used to acquire two oil tankers.

The two Very Large Crude Carriers (VLCCs) – the Gulf Sheba and the Gulf Eyadah – were subsequently sold to DHT Holdings of Bermuda for US$98 million in September 2014, after being seized on the order of creditors in late 2013.

Gulf Navigation announced its best annual results for eight years in February, thanks to an improvement in spot tanker rates and the reclassification of liabilities.

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