Dubai-based shipping company Gulf Navigation Holding has restructured its largest loan with Australis Maritime, under what are described as being “new and flexible terms”. The value of the debt, which amounts to more than AED 200 million, has been rescheduled so that the cost of servicing it will be reduced by 25%, generating the equivalent of AED 4 million in savings annually.
The company also stated that it has fully paid all its obligations to Abu Dhabi Commercial Bank, thereby reducing the company’s overall debt. The company is currently working on reaching an agreement with the majority of the lenders on new terms that will allow the company to adapt to the current market conditions. Gulf Navigation claims it has also made major changes to its operating model and reduced administrative expenses in order to enhance prospects for growth and sustainability.
The company is reportedly studying several options to expand its maritime fleet, either through new acquisitions or mergers. A statement said the company is expected to return to profitability during 2021 as a result of the measures taken by the Board and initiatives to stabilise the performance of the fleet by chartering vessels to reliable customers on a long-term basis.
Last year Gulf Navigation recorded a net loss of AED 279 million compared to a net loss of AED 327 million in 2019. The company’s fortunes were impacted adversely by the sinking of its livestock carrier, Gulf Livestock 1, in September of last year. The company reports it has recently been able to reach a final agreement with the insurance company to ensure the collection of insurance amounts arising from the loss of the livestock carrier, which will contribute to enhancing the liquidity of the company.