Gulf Navigation Holding (GULFNAV) PJSC, Dubai’s only publicly traded oil-tanker owner, hired Deutsche Bank AG (DBK) and King & Spalding LLP to set up a Saudi joint venture to ship crude from the world’s top exporter.
The new company will at first own four very large crude carriers, of VLCCs, with its fleet increasing to nine vessels by 2015, Gulf Navigation said in a statement to the Dubai bourse today. Shares in the venture will be listed on Saudi Arabia’s stock market, it said.
Gulf Navigation is taking advantage of a glut in ship supply to buy vessels at prices that have fallen since the global economic crisis. The slowdown hurt shipping companies as demand for goods and oil products declined and previous tanker orders brought an excess of ships to the market.
The company’s shares gained as much as 6.2 percent, to 40.9 fils. The shares traded at 40 fils at 2:22 p.m. in Dubai, giving Gulf Navigation a market value of 662 million dirhams ($180 million). The dirham is the currency of the United Arab Emirates, to which Dubai belongs. One dirham equals 100 fils.
A VLCC can haul 2 million barrels of oil. New tankers will be delivered to Gulf Navigation’s Saudi unit in 2012 and early 2013, the company said.
The tanker owner didn’t give a timeline for the stock listing in the statement. Shares of the Saudi venture may be sold in a public offering after two or three years, Vice Chairman Ghazi al-Ibrahim said at a press conference in Dubai on Feb. 14.
Gulf Navigation aims to have the capacity to carry 18 million barrels of oil in its fleet, according to its five-year strategic plan. King & Spalding is a law practice based in Atlanta.
To contact the reporter on this story: Anthony DiPaola in Dubai at email@example.com.