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Dubai’s Gulf Navigation Holding plans to buy back 10 percent of its shares, even as it managed to narrow its 2020 net loss.
In a bourse statement, the company said the buyback “will lead to more stability and improve the market profitability for the stock in the future.” It will use the insurance settlement (on its vessel “Gulf Livestock 1” which sank in September 2020 during its trip from New Zealand to China), and the liquidity resulting from the debt refinancing process, for buying back shares.
Gulf Navigation, the only crude shipper listed on the Dubai Financial Market, said its net loss for the year amounted to 279 million dirhams compared to the net loss of 327 million dirhams in 2019.
The company is planning to complete debt restructuring and refinancing deal this year. It has already reached an initial agreement “with a majority of lenders on new and flexible terms that will allow the company to adapt to current market conditions and achieve better growth".
Gulf Navigation has begun proceedings for a mandatory convertible Islamic sukuk with a maximum value of up to $50 million. This issuance aims to convert part of the company's debt into shares, thus increasing the paid-up capital and reducing the ratio of accumulated losses to the capital.
(Writing by Brinda Darasha; editing by Daniel Luiz)
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