Saudi shipper Bahri targets acquisitions in Asia, Middle East

Saudi Arabia's Bahri, the world's largest owner of very large crude carriers, is seeking acquisitions in Asia and the Middle East. (Reuters)
Updated 07 November 2018
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Saudi shipper Bahri targets acquisitions in Asia, Middle East

  • Bahri is world's biggest owner of VLCCs
  • Targets listed firm in Asia

RIYADH: Saudi Arabia’s Bahri is targeting acquisitions in Asia and the Middle East as the exclusive oil shipper for state energy giant Saudi Aramco seeks to expand its reach, the chief executive said on Wednesday.
Bahri is the world’s largest owner and operator of very large crude carriers (VLCCs). Saudi sovereign wealth fund the Public Investment Fund (PIF) owns 22 percent of the company and Aramco has a 20 percent stake.
“We are looking at multiple acquisitions in the Middle East and Asia worth tens of millions of dollars,” Bahri CEO Abdullah Aldubaikhi told Reuters.
“We want to tap into a new area related to the maritime sector by acquiring companies offering services that are not currently available within Bahri’s portfolio,” he said, without specifying what services would be added.
The company aimed to buy a listed firm in Asia in a deal that would probably be completed in the third quarter of 2019, he said, without elaborating.
Bahri transports Saudi Aramco’s VLCC cargoes on a cost, insurance and freight (CIF) basis, making it the world’s busiest oil shipper.
It transports crude oil, chemicals and dry bulk. It also offers ship management services. In 2014 it merged with the former shipping arm of Aramco, Vela Marine International.
Acquisitions in the pipeline will be financed from the company’s own funds and banking finance, Aldubaikhi said.
The company, which has 45 VLCCs, plans to add 15 more to its fleet through a $1.5 billion investment fund it launched in 2017 with Arab Petroleum Investments Corp. (APICORP).
The APICORP Bahri Oil Shipping Fund (ABOSF) will raise $1.5 billion in three stages raising $500 million each time. APICORP will contribute 85 percent of the funds and Bahri the rest.
The first $500 million phase would be raised in the first quarter of 2019 and the second tranche would probably be completed in the second quarter of 2020, Aldubaikhi said.
Bahri reported a 34.4 percent increase in third quarter net profit to SR81.3 million ($22.7 million) after zakat and tax, versus SR60.5 million a year earlier.
“We are expanding and growing, and although the shipping industry is cyclical, I think it has bottomed out in 2018,” Aldubaikhi said. “The cycle of the shipping industry in 2019 will improve, and the years 2020 and 2021 will be the golden years for this industry.”


World leaders prepare for Davos amid gloomy forecasts

Klaus Schwab, founder and executive chairman of the World Economic Forum. (AFP)
Updated 16 January 2019
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World leaders prepare for Davos amid gloomy forecasts

  • Delegates to annual forum to include presidents of Iraq and Afghanistan

DUBAI: World leaders are preparing to head to the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland, amid the riskiest global backdrop in years, according to a report from the event organizer itself.

As the WEF announced the names of some of the 3,000 participants set to attend the meeting and details of the four-day agenda, it also published a gloomy outlook on international politics, economics, the environment and technology. 

Rising geopolitical and geo-economic tensions are the most urgent risks in 2019, with 90 percent of experts surveyed expecting further economic confrontation between major powers, according to the WEF’s annual Global Risks Report.

“The world’s ability to foster collective action in the face of urgent major crises has reached crisis levels, with worsening international relations hindering action across a growing array of serious challenges. Meanwhile, a darkening economic outlook, in part caused by geopolitical tensions, looks set to further reduce the potential for international cooperation in 2019,” it added.

Although political and economic worries were top of the immediate agenda for the 1,000 experts polled by the WEF, the environment and climate change are also a cause for concern, as are “rapidly evolving” cyber and technological threats, the WEF said.

Børge Brende, the WEF president, said: “With global trade and economic growth at risk in 2019, there is a more urgent need than ever to renew the architecture of international cooperation. We simply do not have the gunpowder to deal with the kind of slowdown that current dynamics might lead us toward. What we need now is coordinated, concerted action to sustain growth and to tackle the grave threats facing our world today.”

The leaders who will begin to arrive in Switzerland in the next week include Shinzo Abe, prime minister of Japan; Jair Bolsonaro, president of Brazil; Angela Merkel, chancellor of Germany; and Wang Qishan, vice president of China.

With US President Donald Trump pulling out of the meeting to deal with the partial government shutdown, the American delegation is expected to be led by Steven Mnuchin, Treasury secretary, and Mike Pompeo, secretary of state.

The Middle East is well represented at the meeting, with at least nine heads of state or government from the region, including Palestine, Iraq, Egypt, Jordan and Lebanon. Saudi Arabia will be represented by a team of senior policymakers and business leaders.

The risk report will give them all food for thought in the Alpine resort.

Asking whether the world is “sleepwalking into a crisis,” the report responded: “Global risks are intensifying but the collective will to tackle them appears to be lacking. Instead, divisions are hardening. The world’s move into a new phase of strongly state-centered politics continued throughout 2018.

“The idea of ‘taking back control’ — whether domestically from political rivals or externally from multilateral or supranational organizations — resonates across many countries and many issues.”

Macro-economic risks have moved into sharper focus, it said. 

“Financial market volatility increased and the headwinds facing the global economy intensified. The rate of global growth appears to have peaked,” the report said, pointing to a slowdown in growth forecasts for China as well as high levels of global debt — at 225 percent of global gross domestic product (GDP), significantly higher than before the financial crisis 10 years ago.

Raising the prospect of a “climate catastrophe,” the report said extreme weather, which many experts attribute to rapid climate change, was a risk of great concern. “The results of climate inaction are becoming increasingly clear,’ the WEF said.

Of the 3,000 participants at Davos, which runs from Jan. 22 to 25, around 78 percent are men, with an average age of 54. 

The oldest will be the 92-year-old British broadcaster David Attenborough, the youngest 16-year-old South African wildlife photographer Skye Meaker.