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Gulf Navigation Holding, the Dubai Financial Market listed maritime and shipping company, has completed the full repayment of a loan on one of its vessels. The $2.7 million loan was financed by Rasmala with an interest rate of 12%. According to Gulf Navigation, after the mortgage has been released, the full proceeds of this vessel will pour into the company without any deductions, enhancing the company’s profitability and cash flow.
This latest refinancing comes as a continuation of Gulf Navigation’s efforts to reduce financing costs, following an announcement made by the company last August that it had refinanced five petrochemical tankers under new and preferential terms with a major Chinese lender. The 5-year refinancing agreement was signed at a low interest margin not exceeding 4%, which, it is claimed, allowed the company to completely fulfill all its obligations to some lenders and reduce the total cost of borrowing.
The company has recently stated that it has been able to reduce financing costs by 40% compared to 2020, while the amount of debt has fallen from AED 433 million at the end of 2020, to AED 294 million today. The company expects that these measures will have a positive impact on the company’s results in the third quarter of this year.
A statement from Gulf Navigation revealed that the company currently owns two vessels without any commitments or loans, which it considers a “tremendous achievement”, as all its vessels were always mortgaged to lenders in the past. It continues: “We have reached a stage that allows us to refinance our assets if the need arises, or to sell these ships in order to replace them with new ships that can win long-term contracts.”
Gulf Navigation is headquartered in Dubai, with branch offices in Fujairah, Khorfakkan, Abu Dhabi and an overseas office in the Kingdom of Saudi Arabia.
