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Fri 14 Aug 2015 09:16 AM

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Dubai shipping firm inks settlement deal with creditor

Gulf Navigation announces agreement as part of its turnaround plan to solve debt problems

Dubai shipping firm inks settlement deal with creditor
crude oil tanker (ATTA KENARE/AFP/GettyImages)

Dubai-based shipping firm Gulf Navigation Holding has said it has signed a settlement agreement with one of its major creditors, Nordic American Tankers Limited, Bermuda (NAT).

The settlement follows the company's recent report of a net profit growth of 172 percent to AED10 million ($2.74 million) in the first half of 2015 amid intensive efforts to address creditor issues.

Last year, Gulf Navigation said it had cut its capital by two-thirds and written off accumulated losses worth AED1.1 billion ($300 million), key parts of a turnaround plan designed to solve its debt problems.

The company's capital has been reduced to AED551 million from AED1.66 billion.

Under the terms of the agreement with Nordic American Tankers, Gulf Navigation will issue mandatory convertible bonds with a face value of AED37.34 million as full and final settlement for claims made by NAT, with the bonds issued prior to August 20, subject to approval from the Department of Economic Development and the Securities and Commodities Authority.

The company added in a statement that it is currently engaged in negotiations with other creditors to reach mutually satisfactory outcomes.

Hazza Baker Al Qahtani, founder and chairman of Gulf Navigation, said: "We appreciate the full support given by our shareholders, investors and government regulators in our efforts to resolve pending creditor concerns.

"They were all instrumental to our successful negotiations with Nordic American Tankers Limited and will definitely be crucial to similar ongoing talks with other creditors.

"Our exceptional profit for the first half of this year validates our improving financial position and we expect to direct our focus more on future growth in the coming months."

The company recently appointed Parag Jain as its acting CEO as part of the company's restructuring efforts.

Gulf Navigation Holding owns and operates a fleet of chemical tankers and auxiliary crew boats and is listed on the Dubai Financial Market.

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