Gulf Navigation, a Dubai transport and shipping company, received shareholder approval to issue Dh100 million Sharia-compliant bonds as part of its capital increase drive.
The mandatory convertible sukuk will be privately placed to Wahat Al Zaweya, a real estate development company, Gulf Navigation said in a statement on Monday to the Dubai Financial Market, where its shares are traded. The shareholders, who met on November 15, also unanimously approved to raise the company’s capital to Dh1.02 billion.
The three-month sukuk, being issued at par value of Dh1 will be automatically converted into company’s shares on February 18.
Gulf Navigation is using the proceeds to expand its operations. It is “finalising construction of new oil tankers and purchasing new ships to transport livestock to diversify the [company’s] commercial operation”, the company said.
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The move follows the Gulf Navigation’s Dh448.33m rights issue in March. That issue was 82 per cent subscribed and the company only issued 367.54m new shares with a face value of Dh1 per share, pushing Gulf Navigation's paid-up share capital from Dh551.66m to Dh919,2m. The authorised share capital of the company is Dh1bn, it said.
Gulf Navigation swung to a loss in the second quarter of this year after payments to settle a legal dispute with a Chinese company and maintenance expenses for two vessels dented profitability.
The Dubai company reported a net loss of Dh19.7m in the three months ending June 30. Operating revenue, however, rose to Dh33.46m in the second quarter, from Dh30.98m in the year earlier period.
