Tanker woes hit Gulf Navigation’s bottom line

Gulf Navigation's losses for the third quarter jumped to Dh608.9 million from Dh17.9m a year earlier, as doubts about the company's survival prospects increase.

Gulf Navigation’s oil tanker woes have weighed heavily on its third-quarter profits, as doubts about the company’s survival prospects increase.

The Dubai-based shipping company yesterday posted a loss of Dh614.3 million for the third quarter of the year, attributable to a Dh292.8m impairment of goodwill and a write-off of Dh308.6m of the value it is expected to receive for the sale of its two very large crude carriers (VLCCs).

This compared with a loss of Dh16.3m for the third quarter of last year.

Gulf Navigation’s accumulated losses for the year to September reached Dh1.1 billion, equal to more than 50 per cent of its total share capital of Dh1.66bn.

Under such circumstances the company is obliged under UAE law to hold an extraordinary genral meeting (EGM) with shareholders to obtain a resolution for the company to continue as a going concern. The meeting will be held next month, and will contain discussions on a reduction of the company’s share capital.

An earlier EGM is scheduled for November 28, when the company will seek approval for the sale of its VLCCs, and for a convertible bond issue to be managed by National Bank of Abu Dhabi, according to the company’s managing director Sandeep Kadwe.

The VLCCs – Gulf Sheba and Gulf Eyadeh – were seized in Rotterdam and the Bahamas respectively in October under orders from unpaid creditors.

Both vessels remained under arrest as of yesterday, said Mr Kadwe.

The company had received interest from an unnamed party in buying both vessels and was hoping to receive others before the EGM later this month, he said.

Gulf Navigation’s shares closed down 10 per cent at Dh0.424.