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Gulf Navigation petrochemical tanker
In a general assembly that will be held next month, the board of Gulf Navigation (Gulf Nav), will ask its shareholders to approve its own valuation for the acquisition of Brooge Petroleum and Gas Investment Company (BPGIC) as opposed to a valuation by the UAE’s stock market regulator.
The company will consider two valuations, an independent valuation from the Securities and Commodities Authority (SCA) and a second from the company’s advisor. The board recommends shareholders approve the company advisor’s valuation, Gulf Navigation said in a statement to the DFM.
Shareholders will also consider giving approval for the acquisition of the oil storage company, a part of the Fujairah oil terminal, which has Brooge Energy Ltd as its parent company.
No value has yet been announced for the transaction apart from claims by a board member last summer putting the combined entity valuation at AED 20 billion ($5.4 billion).
Shareholders will vote on four special resolutions, subject to approving the company’s valuation. First, issuing 349 million shares in favour of Brooge Energy Ltd, and second, issuing AED 2.3 billion in mandatory convertible bonds (MCB) to the company. The third resolution will be to issue AED 500 million in MCBs to current shareholders and the fourth, paying AED 460 million in cash to settle the cash portion of the transaction.
The acquisition was first announced in October 2023 when Gulf Nav submitted a proposal to fully acquire Brooge Petroleum as part of a portfolio expansion strategy.
In March 2024, fraud charges from the Securities and Exchange Commission (SEC) in the USA against Brooge Energy, its former CEO and chief strategy officer, relating to issuance of $500 million in securities, were resolved in a settlement. However, class action suits that have since been filed by investors against Brooge and its auditors EY, relating to the period prior to the planned issuance, did not go ahead after the SEC investigation, according to UK financial press reports and US court filings.
(Writing by Imogen Lillywhite; editing by Seban Scaria)
