Robust response
Oil tanker orders to be funded by oversubscribed IPO
By: Karen Remo-Listana
Posted: 21 August 2006
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The $248 million initial public offering of UAE's Gulf Navigation Holding was oversubscribed 3.5 times and raised $844 million, said Shuaa Capital, the advisor to the issue.
The money raised will be used to purchase 13 new vessels worth $1 billion by the end of 2007. The orders will be for seven very large crude carriers (VLCCs) and six chemical tankers with capacities between 47,000 and 62,000 deadweight tonnes.
 The value of Gulf Navigation’s existing crude and chemical carriers is estimated at $626 million and is on charter for periods between two and 25 years.
The company offered 55% of its equity in the IPO at a price of $.27 each plus $.0054 as offering costs. The IPO, which began on 24 July and ended on 7 August, was open to GCC citizens.
The Ministry of Finance and Industry subscribed 5%, the maximum allowed to it in accordance to the Council of Ministers resolution.
“After the allocation of the shares subscribed to by the Ministry, shares offered in the first tranche have been covered over to 1.9 times; while those in second tranche were covered by 4.3 times,” Salam Saadeh, managing director of the Capital Markets Department at SHUAA Capital, said.
“Over 46,000 individuals and institutions applied for shares from across the GCC,” she added.
Makram Kubeisy, managing director, Investment Banking Advisory at Shuaa Capital said: “With a successful IPO conclusion, Gulf Navigation Holding is now well positioned to move steadily towards solidifying its position in the liquid cargo transportation industry of oil and petrochemical products.”
Abdullah Abdul Rahman Al Shuraim, the current Chairman of the Board of Gulf Navigation Holding, added: “We take note of the confidence that investors have demonstrated in our fundamentally strong business. I would like to thank them for this validation.” |
