Join our crew and become one of the 104,332 members that receive our newsletter.

bahri

Saudi Shipper Bahri Plans Long-Term Financing to Replace Vela Aquisition Debt

Reuters
Total Views: 3
June 22, 2014

reuters logoDUBAI, June 22 (Reuters) – National Shipping Co of Saudi Arabia (Bahri) plans to arrange long-term sharia-compliant financing in the next year to replace a bridge loan backing its $1.3 billion acquisition of Saudi Aramco’s marine unit, it said on Sunday.

The purchase of Vela, first announced in November 2012, was approved by Bahri shareholders at a meeting last Thursday, paving the way for a deal which makes Bahri the world’s fourth-largest owner of very large crude carriers (VLCCs).

Under the agreement, Bahri also becomes the sole provider of VLCC crude oil shipping services to Aramco.

Bahri is funding the acquisition with new shares issued to Aramco and a 3.18 billion riyal ($848 million), 12-month sharia-compliant bridge loan which was agreed in February 2013 but signed on Sunday, it said in a bourse filing.

The funding, secured against the vessels it is receiving from Aramco, was provided by JP Morgan, Samba Financial Group and Saudi British Bank.

This will be refinanced in the next year with long-term Islamic financing, details of which will be announced when agreed, a separate bourse statement from Bahri added.

Sources told Reuters in March 2013 that Bahri was looking at a potential debut sukuk issue to replace the bridge loan; the banks that provided the cash would be frontrunners to arrange the sukuk.

The shares granted to Aramco under the terms of the merger will give the kingdom’s national oil company a 20 percent stake in Bahri post-completion. ($1 = 3.7508 Saudi Riyals) (Reporting by David French; Editing by Andrew Torchia)

(c) 2014 Thomson Reuters, All Rights Reserved

Tags:

Unlock Exclusive Insights Today!

Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.

Sign Up
Back to Main
polygon icon polygon icon

Why Join the gCaptain Club?

Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.

Sign Up
close

JOIN OUR CREW

Maritime and offshore news trusted by our 104,332 members delivered daily straight to your inbox.

Join Our Crew

Join the 104,332 members that receive our newsletter.