Gulf Navigation, a Dubai-listed maritime and shipping company, said it expects to be profitable by the end of 2021 after restructuring its biggest loan of Dh200 million ($54.4m).
As a result of its new arrangement with Australis Maritime, the cost of its debt will be reduced by 25 per cent, of Dh4m annually, the company said in a statement on Wednesday to the Dubai Financial Market, where its shares trade.
Gulf Navigation also said it has completely paid off its obligations to Abu Dhabi Commercial Bank and is aiming to negotiate "new and flexible terms" with other lenders to restructure its remaining debt.
The shipping company reported a loss of Dh279.1m on revenue of Dh145.8m last year as it wrote off the Dh197m carrying value of one of its vessels, Gulf Livestock 1, which sank in the East China Sea off the coast of Japan in September. It ended the year with liabilities of Dh539m, of which about Dh325m is owed to banks.
Gulf Navigation appointed a new board in September to fast-track its business turnaround strategy amid tough market conditions. The board is led by Sheikh Theyab bin Tahnoon and includes members Abdulla Atatreh, Mohamed Alhammadi, Abdulaziz Alongary and Waleed Mohammad. The company also appointed Ali Abouda as its chief financial officer earlier this year.
"The company has made major changes to the operating model and reduced administrative expenses in order to enhance growth and sustainability," Gulf Navigation said in its latest filing.
The company has taken steps to improve the efficiency of its vessels and chartered them to reliable customers on a long-term basis – a move that could help it to become profitable by the end of this year, it said.
Gulf Navigation is also assessing options to expand its fleet through new mergers and acquisitions as it pushes ahead with a plan to expand its business locally and regionally.
The company also signed a deal to acquire a group of petrochemical and dry bulk carriers from Greece-based Empire Navigation in February to expand its fleet.
Gulf Navigation's fleet of vessels includes petrochemical tankers, livestock transport ships and marine support vessels, which allows it to service different markets.
