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The board of directors of Dubai-listed Gulf Navigation Holding (GulfNav) has approved a capital increase related to the takeover of assets owned by Brooge Energy Limited.
The capital hike is one of the key decisions the board has reached to acquire the businesses and assets of Brooge Energy, a Nasdaq-listed crude oil, fuel oil and refined fuel products storage company, the UAE oil shipper said on Wednesday.
In a statement on the Dubai Financial Market (DFM), GulfNav said the capital hike will be covered through a cash consideration, new shares worth around AED 448.5 million ($122 million) and mandatory convertible bonds to be issued in favour of Brooge.
Last year, GulfNav submitted a formal proposal to acquire fully all of the businesses and assets from Brooge Energy.
The transaction is expected to boost GulfNav’s position in the market and increase its operational and competitive capabilities. It will also enable the company to diversify its revenue sources and strengthen its relationships with partners in the energy sector.
Board decisions
The approved strategic terms related to the acquisition and capital increase will be presented to the shareholders at the company’s general assembly after obtaining the approval of the Securities and Commodities Authority.
The board also approved the auditors’ report and the audited financial statements for last year of the companies to be acquired, in addition to the report that justifies the takeover and outlines the structure and payment mechanism.
The board also approved the basic terms for issuing mandatory convertible bonds to Brooge, which will be transferred later to the ultimate beneficial owners before being converted into shares in the capital of the company.
Headquartered in Fujairah, Brooge has a capacity to store 6.3 million barrels of oil. It is looking to double its storage capacity in the coming years.
(Writing by Cleofe Maceda; editing by Seban Scaria)
