DUBAI, 29 July 2006 — The two-week initial public offering of Gulf Navigation Holding (GNH), which opened on July 24, has been receiving a huge response.
The nominal value per share is AED1 with an additional AED2 as offering costs. The company has floated 910 million ordinary shares, or 55 percent of the company’s total shares.
“We hope that the successful conclusion of the IPO will further support our strategy which aims at expanding the company’s shipping fleet and operations,” said Ghazi Abdulrahim Al-Ibrahim, managing director and CEO of GNH. “To further strengthen our position, we are interested in investing in successful companies within our field.”
The CEO said the proceeds of the IPO would go toward expanding the company’s fleet with 13 new tankers, including seven high-capacity two-million-barrel vessels.
SHUAA Capital is underwriting the IPO, which is open to GCC nationals until Aug. 7.
“Our major strength are the Middle East, West Africa and Indian Ocean markets, but we have greater market coverage through our strategic partners,” said Al-Ibrahim. “In the crude sector, we have a pooling agreement with Scandic American Tankers whose strength is the North Sea and American markets. Our partnership with the Stolt Nielsen Transportation Group opens for us the chemical markets in Europe, America and the Far East markets.”
Al-Ibrahim said that the alliances provide maximum utilization of the company’s ships. GNH is approved to transport for some of the major oil companies, including Saudi Aramco, BP, Shell and Chevron.
The transport company recently purchased six double-hulled vessels in an AED450 milion deal.
GNH currently has 18 tankers valued at approximately AED2.3 billion. The returns for the company from current charter agreements that range from 2 to 25 years already exceed AED3.7 billion.
“We expect growth of income in a way that matches the size of our new investments which will soon cross AED 3.8 billion,” said the CEO. Meanwhile, a statement from GNH yesterday, said that the company and ST Shipping and Trading, Switzerland-based Glencore’s shipping arm, one of the largest oil trading houses in the world, have signed a time charter agreement for three ships at an approximate value of $40 million (AED145 million).
Under the terms of the agreement, GNH will time-charter two ships to ST Shipping and Trading for up to two years under long-term fixed rate employment, and a third at a floating market rate with a fixed minimum charter rate.
The process for delivery of the three vessels will be completed in the next few days. The vessels are double hull, 48,000 metric tons deadweight each and have liquid capacity of about 50,000 cubic meters. The vessels are capable of speeds up to 15 knots. GNH was established in 2001 in Muscat, Oman and moved to Dubai in 2003. Today, it is considered one of the largest companies in the region in the field of crude oil and chemical and petroleum products transportation.
