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Gulf Navigation clears debt with Nordic American Tankers, issues promise to other creditors

Gulf Navigation clears debt with Nordic American Tankers, issues promise to other creditors
Dubai-based chemical tanker owner Gulf Navigation has hailed the final settlement of a longstanding debt to Nordic American Tankers (NAT) as the “beginning of the end of the troubled past of the company”.

GulfNav md and group ceo Khamis Juma Buamim said he hoped the “milestone” would resuscitate investor confidence in the Dubai Financial Market (DFM)-listed company in tandem with its desire to reach “fair settlements soon” with its other major creditors.

The NAT announcement follows an earlier settlement of AED37.34m ($10.1m) by way of Mandatory Convertible Bonds (MCBs) announced in August 2015 and comes as Gulf Navigation Holding PJSC slowly navigates its way out of a particularly turbulent period.

Seatrade Maritime News revealed last month that GulfNav was considering the issuance of MCBs as it continued to pay down its debts. The group’s net liabilities stood at AED587.9m ($160m) as of 30 June – down from AED 707m in June 2015 - while its accumulated losses were AED227.9m.

GulfNav’s financial position has improved – it announced a net profit of AED 14.36m ($3.9m) for the first half of 2016, a 43% period-on-period hike – but it hasn’t stopped a major shake-up of its board and senior management including the appointment of Buamim in April.

Chairman Dr Hazza Al Qahtani and six board members - Hakeem Al Otaibi, Nasser Al Kahtani, Captain Faisal Al Qahtani, Dr Sandeep Kadwe, Dr Majed Al Shamroukh and Abdulla Alharthy, departed en-masse in January, just a month after Captain Parag Jain was appointed ceo.

However, Jain “ceased work with the company as of July 25”, replaced by well-known Middle East maritime identity Omar Abu Omar who joined from  UAE classification society Tasneef in the position of president, maritime and operations.  

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Gulf Navigation settles $10.1m with NAT; 'significant doubt' over future

Buamim said a now “fully energized management” was working to clear all historical liabilities and backlog in order to give GulfNav a “new leash of life” whereby new business opportunities could be explored on a more positive footing.

“We are happy to have reached this important settlement with Nordic American Tankers and I thank them for their positive commitment during the negotiations,” Buamim said.

“This is an important milestone on the commitment we have made earlier to seek fair and amicable settlements with all our legacy debtors.

“I once again would like to assure all concerned that past and legacy issues will be resolved and the company will be on a solid ground to navigate the future with full commitment to its shareholders, the market and the industry at large”.

GulfNav would look beyond its chemical tanker DNA to other shipping segments to continue its revival, Buamim said.

The GulfNav fleet, according to its website, comprises eight chemical tankers and four crew boats operated in its Shipping Services business.

GulfNav is the only public listed maritime, offshore services and shipping company trading on the DFM. The company’s shares closed at $1.17 on Tuesday, up from $1.06 on August 2, the day its H1 2016 results were unveiled.