Tankship Owner, Gulf Navigation Group, in Dire Straits

MarineLink.com
Wednesday, November 13, 2013
Gulf tankship in previous ownership colours: Photo courtesy of Frontline

The Dubai-based shipping company Gulf Navigation has posted a loss of Dh614.3-million in Q3 2013 attributable to a Dh292.8m impairment of goodwill and a write-off of Dh308.6m of the value it expected to receive for the sale of its two very large crude carriers (VLCCs). Doubts about the company’s survival prospects increase and on this question the company states as follows:

Going concern
The Group's condensed consolidated interim fmancial infonnation has been prepared on a 'going concem' basis, however, given the conditions and events described below there exists a material uncertainty that may cast significant doubt about the Group's ability to continue as a going concem.

The Group incurred a loss of AED 644,033 thousand during the nine month period ended 30 September 2013 and, as of that date; the Group had accumulated losses of AED 1,121,705 thousand which represents more than one half of the Group's share capital.

In accordance with the UAB Federal Law No 8. of 1984, there is a requirement to convene an extraordinary general meeting ("EGM") of the shareholders and obtain a resolution from the shareholders to enable the Group to continue as a going concem. Therefore, the Directors have resolved to convene an EGM in December 2013 to put forward a resolution that the Group shall not be dissolved and continue its operations in the nonnal course of business.

The ability of the Group to continue as a going concem is reliant upon obtaining the approval of the shareholders in the EGM and continued availability of extemal debt financing and additional equity. At 30 September 2013, the Group was in breach of the tenns ofthe loan agreements with its lenders.

Further during the period, the Group was unable to make payment of a loan instalment of USD 938 thousand (AED 3,433 thousand) which was due in July 2013 (Note 8). These breaches gave the lenders the right to call an event of default and by further notice, declare that all the loans are payable on demand. Accordingly, the Group's bank borrowings are classified as current liabilities at 30 September 2013.

These events have resulted in the Group having a net current liability position at 30 September 2013 of AED 542,794 thousand.

 On 13 September 2013 and 4 October 2013, two of the Group's vessels, Gulf Sheba and GulfEyadah, were arrested at the instructions of the lenders at the Port of Rotterdam and at the Port of Bahamas respectively. Notwithstanding such arrest, management is continuing its discussions with its lenders to proceed for a consensual sale of both vessels and restructure the payment of the shortfall of loans relating to these vessels.

If the Group is not able to agree the required restructuring of the remaining loan related to the vessels and in the absence of other financing altematives, the Group would be dependent on market based asset values to repay its borrowings. As a result, there exists a material uncertainty which may cast significant doubt on the ability of the Group to continue as a going concem such that the Group may be unable to realise its assets and discharge its liabilities in the nonnal course of business. Accordingly, assets may be realised at significantly less than book value and additional liabilities may arise.
 

Maritime Reporter July 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

ISS Announces CEO Transition

Captain Claus Hyldager yesterday decided to step down as the Chief Executive Officer of Inchcape Shipping Services (“ISS”).    The current Chief Financial Officer,

CME Lifts Force Majeure for all Illinois River Grain Terminals

CME Group has lifted its declaration of force majeure at all Illinois River terminals that are regular for Chicago Board of Trade corn and soybean futures delivery,

FURUNO of Japan Increases Investment in ENL

ENL Group and FURUNO Electric Co. Ltd of Japan have announced that FURUNO has increased its investment into the New Zealand company to a total of 29.5%. The

Legal

Asian Nations Call for Stop to South China Sea Land Work

Calls grow for China to halt land reclamation. Southeast Asian countries on Tuesday backed a U.S. call to halt land reclamation in the South China Sea, underlining

FMC Collects $1,227,500 in Penalties from NVOCC's

Federal Maritime Commission Chairman Mario Cordero announced that the Commission has completed compromise agreements recovering a total of $1,227,500 in civil penalties.

NYK Hosts Safety Conference

Over three dates in July, NYK hosted a safety promotion conference for shipowners and ship-management companies at the NYK head office in Tokyo and at Imabari city in Ehime prefecture.

Tanker Trends

Koole Expands Rotterdam Operations

Koole Terminals has begun operations at the storage facility for petrol and diesel in Pernis that it recently acquired from BP.   The companies have a long-standing relationship.

Coast Guard Monitors Oil Recovery Ops near Bayonne, NJ

Coast Guard crews are continuing to monitor oil recovery operations (ORO) in the water near the International-Matex Tank Terminal (IMTT) Bayonne, New Jersey, Monday.

India: Negative Outlook on Shipping Sector

India Ratings and Research (Ind-Ra) has maintained a negative-to-stable outlook for the shipping sector for the current financial year.   The agency expects

Finance

FURUNO of Japan Increases Investment in ENL

ENL Group and FURUNO Electric Co. Ltd of Japan have announced that FURUNO has increased its investment into the New Zealand company to a total of 29.5%. The

Pressure for Australia Sub Deal Grows

Australia to spend A$65 bln on ships and subs over 20 years; PM pledges A$40 bln for domestic shipbuilders. Australia will spend A$89 billion ($65 billion) on

S.Africa Considering Ship-Based Power Generation

South Africa could deploy power barges using gas to generate electricity to help overcome chronic supply shortages, a senior government official said on Tuesday.

Middle East

Egypt Says Finishes Work on New Suez Canal

Egypt has finished building its New Suez Canal, its overseer said on Wednesday, a project President Abdel Fattah al-Sisi sees as a symbol of national pride and

CMA CGM to Resume Service to Iran

The world's third-largest container shipping group, France's CMA CGM, said on Monday it would resume operations to Iran following the deal between Tehran and world

New Suez Canal Ready for Business

Suez Canal Authority (SCA) chairman Mohab Mamish officially called on international maritime navigation lines to use the New Suez Canal, scheduled to be inaugurated August 6.

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Offshore Oil Pipelines Pod Propulsion Salvage Ship Repair Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2980 sec (3 req/sec)