Gulf Navigation Holding's Board Approves Strategic Acquisition Of Brooge Energy Assets

Gulf Navigation Holding PJSC (GULFNAV), a maritime and shipping firm listed on the Dubai Financial Market, has announced its Board of Directors' decisions regarding the acquisition of companies and assets owned by Brooge Energy Limited. Brooge is a prominent storage company for crude oil, fuel oil, and refined products, listed on NASDAQ. The Board has approved strategic terms related to this acquisition and a capital increase, pending shareholder approval at the General Assembly.

The acquisition aligns with GULFNAV's strategy to expand its services in oil, gas, and petrochemical logistics. Brooge, based in Fujairah, specialises in storing crude oil products. It boasts a capacity of one million cubic meters, equating to 6.3 million barrels of oil storage. The company plans to double this capacity in the coming years.

Brooge was established in 2013 and is now among the most technologically advanced in crude oil storage services. Its facilities utilise cutting-edge technologies that meet international standards. Brooge has also bolstered its investments in Fujairah, a key hub for oil storage and exportation.

The GULFNAV Board has made several crucial decisions about acquiring Brooge-owned companies. They approved the auditors' report and audited financial statements for 2023 of these companies. Additionally, they reviewed a report justifying the acquisition, detailing the structure and payment mechanism involving cash payments, mandatory convertible bonds issuance, and new shares issuance.

The Board also sanctioned issuing mandatory convertible bonds to Brooge. These will later be transferred to ultimate beneficial owners before converting into company shares. Furthermore, they ratified the Term Sheet execution and approved presenting acquisition details and capital increase to shareholders at the General Assembly.

A capital increase of AED448.5 million was approved by the Board as part of the acquisition settlement with Brooge. This will be covered through cash consideration, new shares worth approximately AED448.5 million, and mandatory convertible bonds issued to Brooge.

Enhancing Market Position

The Board also agreed to convene a General Assembly meeting for shareholder approval on these decisions after securing consent from the Securities and Commodities Authority. This acquisition is anticipated to boost GULFNAV's market position while enhancing operational capabilities.

This strategic move will diversify revenue sources and strengthen ties with key partners in the energy sector. It positions GULFNAV to seize future growth opportunities locally and regionally while improving financial performance and increasing shareholder returns.

With inputs from WAM