GulfNav targets expansion with offshore oil and gas acquisition

Offshore drilling platforms in Singapore. The UAE-based shipping company Gulf Navigation is in talks to acquire a majority stake in Singapore-listed Atlantic Navigation as part of its plans to expand into the offshore oil and gas sector. (Reuters)
Updated 29 January 2018
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GulfNav targets expansion with offshore oil and gas acquisition

LONDON: The UAE-based shipping company Gulf Navigation (GulfNav) is in talks to acquire a majority stake in Singapore-listed Atlantic Navigation as part of its plans to expand into the offshore oil and gas sector in the Gulf.
“This investment marks a major milestone in Gulf Navigation’s strategy to grow our offering to our customers in the regional offshore oil and gas sector. At the same time it gives Gulf Navigation a significant position in the GCC regional OSV O&G market,” said Khamis Juma Buamim, group CEO of GulfNav, in a statement.
Atlantic operates a fleet of 25 vessels including offshore cargo barges, offshore supply vessels and lift boats. It also has a 50 percent share in a consortium to work on a $45 million deconstruction project with a Middle East-based national oil company, a GulfNav statement said. The project involves demolishing and removing offshore and onshore structures at an abandoned oil field in Abu Dhabi.
The planned acquisition is another step in GulfNav’s growth plans launched in July 2016 as it aims to respond to the anticipated demand for the shipping of petroleum and petrochemical products.
GulfNav set a target to double the size of its fleet of chemical tankers and offshore vessels to 20 ships by 2020 as well as increase its revenues by 300 percent by 2021.
In line with that strategy, GulfNav announced on Jan. 2 said it would increase the company’s capital by approximately 448 million dirhams ($121.9 million) to reach a total share capital of 1 billion dirhams. The offering will be launched in the first quarter of this year.
“Many GCC countries have allocated more than $140 billion over the next decade to expand their production,” said Buamim in a statement earlier this month, citing Saudi Aramco as an example which is looking 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,” he said.
The company said this month it would refinance two petrochemical carriers Gulf Mishref and Gulf Mirdif to increase the firm’s fleet capacity. The vessels have the capacity to carry more than 26,000 tons each of chemical cargo. They will operate on the East Coast of the US, the Gulf of Mexico and will travel between the coast of West Africa and Europe.
Signs of a revival in GulfNav’s fortunes follow a major financial restructuring after it posted a net loss of 147.83 million dirhams in 2012. At the time the company cited poor trading conditions in the VLCC market and a tightening lending market.
The company had to sell two of its VLCCs, Gulf Sheba and Gulf Eyadeh, about four years ago.


Dubai property developer Damac on hunt for land in Saudi Arabia

Hussain Sajwani
Updated 18 March 2019
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Dubai property developer Damac on hunt for land in Saudi Arabia

  • Brexit a “concern” for UK property market says Sajwani
  • Developer mulls investing “up to £500 million” on London project

LONDON: The Dubai-listed developer Damac says it is scouting for additional plots of land in Saudi Arabia, both in established cities and the Kingdom’s emerging giga-projects such as Neom.
Hussain Sajwani, chairman of Damac Properties, also said the company would look to invest up to £500 million ($660 million) on a second development in the UK, and that it is on track to deliver a record 7,000 or more units this year.
Amid a slowing property market in Dubai, Damac’s base, the developer is eying Saudi Arabia as a potential ground for expansion for its high-spec residential projects.
Damac has one development in Jeddah, and a twin-tower project in Riyadh — and Sajwani said it is looking for additional plots in the Kingdom.
“It’s a big market. It is changing, it is opening up, so we see a potential there … We are looking,” he said.
“In the Middle East, Saudi Arabia is the biggest economy … They have some very ambitious projects, like the Neom city and other large projects. We’re watching those and studying them very carefully.”
The $500 billion Neom project, which was announced in 2017, is set to be a huge economic zone with residential, commercial and tourist facilities on the Red Sea coast.
Sajwani said doing business in Saudi Arabia was “a bit more difficult or complicated” that the UAE, but said the country is opening up, citing moves to allow women to drive and reopen cinemas.
He was speaking to Arab News in Damac’s London sales office, opposite the Harrods department store in Knightsbridge. The office, kitted out in plush Versace furnishings, is selling units at Damac’s first development in the UK, the Damac Tower Nine Elms London.
The 50-storey development is in a new urban district south of the River Thames, which is also home to the US Embassy and the famous Battersea Power Station, which is being redeveloped as a residential and commercial property.
Work on Damac's tower is underway and is due to complete in late 2020 or early 2021, Sajwani said.
“We have sold more than 60 percent of the project,” he said. “It’s very mixed, we have (buyers) from the UK, from Asia, the Middle East.”
Damac’s first London project was launched in 2015, the year before the referendum on the UK exiting the EU — the result of which has had a knock-on effect on the London property market.
“Definitely Brexit has cause a lot of concern, people are not clear where the situation will go. Overall, the market has suffered because of Brexit,” Sajwani said.
“It’s going to be difficult for the coming two years at least … unless (the UK decides) to stay in the EU.”
Despite the ongoing uncertainty over Brexit, Sajwani said Damac was looking for additional plots of land in London, both in the “golden triangle” — the pricey areas of Mayfair, Belgravia and Knightsbridge, which are popular with Gulf investors — and new residential districts like Nine Elms.
Sajwani is considering an investment of “up to £500 million” on a new project in the UK capital.
“We are looking aggressively, and spending a lot of time … finding other opportunities,” he said. “Our appetite for London is there.”
Damac is also considering other international property markets for expansion, including parts of Europe and North American cities like Toronto, Boston, New York and Miami, Sajwani said.
The international drive by Damac comes, however, amid a tough property market in the developer’s home market of Dubai.
Damac in February reported that its 2018 profits fell by nearly 60 percent, with its fourth-quarter profit tumbling by 87 percent, according to Reuters calculations.
Sajwani — whose company attracted headlines for its partnership with the Trump Organization for two golf courses in Dubai — does not see any immediate recovery in the emirate’s property market, or Damac’s financial results.
“(With) the market being soft, prices being under pressure, we are part of the market — we are not going to do better than last year,” he said. “This year and next year are going to be difficult years. But it’s a great opportunity for the buyers.”
But the developer said Dubai was “very strong fundamentally,” citing factors like its advanced infrastructure, safety and security, and low taxes.
In 2018, Damac delivered over 4,100 units — a record for the company — and this year, despite the difficult market, it plans to hand over even more.
“We’re expecting north of 7,000,” Sajwani said. “This year will be another record.”