Gulf Navigation incurs $381m losses
Dubai, March 26, 2014
Gulf Navigation Holding, a maritime and shipping company, has accumulated losses of Dh1.4 billion ($381 million), which is more than half of its share capital, said a report.
It ability to continue operations have been hampered badly and is in desperate need of financing after these huge losses on higher provisions last year, said the Emirates 24/7 report.
The losses jumped more than five times after it lost two arbitration cases in London, which allocated hefty amounts for provisions, it said.
The company has defaulted on a $938,000 loan instalment, which was due in July, and its directors are considering various ways to raise finance and that "its ability to continue as a going concern is reliant upon continued availability of external debt financing and additional liquidity,” the financial report was quoted as saying.
Two of its vessels - Gulf Sheba and Gulf Eyadah - were arrested at the instructions of the lenders at the Port of Rotterdam and at the Port of Bahamas, respectively. The company had to sell the vessels on February for Dh368 million, including the bunker inventory on the vessels, said the report.
The group, thus, had Dh699.5 million liabilities at the end of December 31, it said.
"The group's management are continuing their discussions with the lenders to restructure the repayment of the shortfall. If it is unable to agree the requirement restructuring of the remaining loan related to the vessels and in the absence of other financing alternatives, the group would be dependent on market-based asset values to repay its borrowings,” said a statement from the company.
"As a result, there exists a material uncertainty which may cast significant doubt on the ability of the Group to continue as a going concern such that the Group may be unable to realise its assets and discharge its liabilities in the normal course of business," it said.
The directors are also considering various options for raising finance to fund group's working capital and future investment requirements, it added.