Structuring the Brooge buyout
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The acquisition will be settled through a combination of cash, newly issued shares, and Mandatory Convertible Bonds (MCBs).
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Issuance of 358.84 million new shares to Brooge Energy Ltd. at Dh1.25 per share, with a one-year lock-up period.
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Issuance of MCBs of Dh2.33 billion to BEL, convertible at Dh1.25 per share, with a one-year lock-up period post-conversion.
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Issuance of MCBs of Dh500 million at AED 1.10 per share, ‘exclusively allocated’ to existing Gulf Navigation shareholders, with major shareholders subscribing to any remaining bonds not taken up by minority investors. (These MCBs are to be converted into shares within three months.)
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A cash payment of Dh460 million as part of the transaction settlement.
For the Dubai shipping company, the deal is the route to make it a ‘dominant player in the energy sector by expanding its storage and logistics capabilities’.
BEL’s assets includes facilities for the storage of fuel oil, crude oil, and petroleum products, and ‘will complement Gulfnav’s existing operations’.
According to Ahmad Kilani, CEO of Gulf Navigation, ” This deal reinforces our commitment to sustainable growth, operational excellence, and long-term value creation for our shareholders. With this acquisition, we strengthen our position in the midstream sector, expand our service portfolio, and unlock new revenue opportunities.”
The company has plans to expand its storage and logistics capabilities, ‘enhancing its ability to serve the growing demand for midstream oil and gas services in the region’.
“Financially, the deal is projected to enhance Gulfnav’s revenue streams and improve EBITDA margins over the next few years,” said Kilani. “The issuance of new shares and MCBs will increase Gulfnav’s share capital by approximately 320%.”
