Tue 02-01-2018 20:49 PM
DUBAI, 2nd January 2018 (WAM) - "Gulf Navigation Holding" PJSC announced recently its intention to increase the company’s capital by AED 448,333,334 in order to increase issued and paid up share capital to AED 1 billion, distributed over 1,000,000,000 shares at a par value of AED 1 per share.
This was announced today after the company’s General Assembly resolution in June 2016, which unanimously approved the increase.
The Initial Public Offering (IPO) is expected to be launched in the first quarter of this year, as per the decision of investors, shareholders and major strategic partners, in order to increase their shares in the company, which will contribute in achieving continuous financial prosperity. The capital increase will also support the company’s expansion plans which will lead to secure more profits.
The increase of the company’s capital came as a result of a comprehensive review of the company’s strategic expansion plans that aims at enhancing its competitiveness. In line with the increase of the value of its assets, that has been achieved in 2017 by 12%, that is approximately AED 117 million (USD 32 million) in comparison with 2016.
The Board of Directors considered that increasing the capital is of a great importance as it is one of the prime means to provide funds that supports the group’s previously announced strategic development plans, including the group intentions to double its fleet size to become 20 vessels by 2020. This expansion will transform the company into a one-stop-shop provider of shipping and maritime services globally. The IPO process will allow investors to benefit from the continued growth and the steady increase in profits which will be reflected positively on shareholders.
Commenting on this announcement, Khamis Juma Buamim, Board Member, Managing Director and Group CEO of Gulf Navigation Holding, said: "Since July 2016, when we launched our new strategy under the slogan "A broad vision to a new horizon" we continued day by day with the expansion and success we promised to our investors and shareholders, and in a short time we have been able to accomplish strategic partnerships that contributed to the value of our shares by 500%."
He added: "Today, we are ready to make a new move in our capabilities, as we are willing to increase the size of our fleet by 20 vessels by 2020 in order to keep up with the growing demand to ship petroleum and petrochemical products regionally.
Many GCC countries have allocated more than $140 billion over the next decade to expand their production. In addition, many of the leading petrochemical companies announced plans to increase their production capacity, including Saudi Aramco, which is willing to increase its oil refining capacity from 2.9 million to 3.3 million barrels per day by 2020. 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. We promise our investors to achieve more growth and profitability for their investments based on the strategic plan set by the company’s team of advisors."
By the completion of the company's expansion plan, it will become one of the largest maritime services provider in the region and it will better meet its stated goal of increasing its revenues by 300% by 2021.
The company’s announcement to increase capital is considered as one of the financing options that improve its investment position. This will provide further support for the company’s previous announcement to introduce $250 million Islamic Sukuk investment that will be provided on stages, which will provide an additional continuous cash flow to enhance the group's efficiency in expanding its projects.
About the company’s progress, Buamim said: "We would not have achieved this position without the support of the Board of Directors, our strategic partners and the constructive efforts of our team. We are proud to have the best talents in the maritime industry who enjoys longstanding experience in this field. We will continue to work determinedly in order to maintain our position and our investors and shareholders trust, despite the difficulties and challenges facing the world economy and the international shipping industry"