Gulf Navigation to write off $300m losses
Dubai, January 7, 2014
Dubai's Gulf Navigation received shareholder backing to continue operating as well as approval for measures aimed at fixing its long-standing debt problems, including a write-off of accumulated losses and a convertible bond issue.
Dubai's only listed crude shipper has been in negotiations with creditors for months after an ambitious expansion plan at the end of the last decade crippled the company as oversupply hit the oil tanker business and transportation rates plummeted.
Shareholders agreed to a motion at a board meeting that the business would continue as a going concern and would not be dissolved, a statement to the Dubai stock exchange said yesterday.
Under market regulations in the UAE, such a question must be put to shareholders if accumulated losses surpass 50 per cent of the company's share capital, which it did in the third quarter of 2013.
Shareholders approved writing off these accumulated losses, totalling Dh1.1 billion ($299.5 million), by reducing Gulf Navigation's capital.
The sale of two very large crude carriers - Gulf Sheba and Gulf Eyada - was also approved.
In October, it had both its supertankers seized in separate incidents after creditors sought their arrest for due payments.
Other measures agreed to by shareholders include a convertible bond sale worth up to $130 million and the increase in the cap on foreign ownership of shares in the company to 49 per cent.-Reuters