The National Shipping Company of Saudi Arabia (Bahri) plans to sell ten-year sukuk worth 3.9 billion riyals (US $1.04 billion) throughout March for general business purposes and debt repayment, a company executive said Wednesday.
Bahri became the sole provider of very large crude carriers (VLCC) crude oil shipping services to Saudi Aramco after it purchased the marine unit, Vela, of the oil giant in a deal announced in 2012 and completed last year.
The purchase of Vela made Bahri the world's fourth-largest owner of VLCC vessels and was backed by the selling of shares and a 3.18 billion riyal bridge loan. Bahri said last June the loan would be replaced by long-term, sharia-compliant financing within 12 months.
The financing looks set to be its first sukuk issue, with the firm choosing HSBC Saudi Arabia, JP Morgan and Samba Capital, the investment banking arm of Samba Financial Group, to arrange the transaction, Mohammad Alotaibi, vice chief executive officer for finance, told reporters on the sidelines of a marine conference in Dubai.
Bahri hopes to get a better interest rate on the sukuk than it has been paying for the bridge loan, which was agreed in February 2013 with the three banks and signed in June 2014, Alotaibi told journalists, declining to provide more details.
He added that the company was open to more acquisitions in the future.
"We are reviewing our strategy. We are inclined more to acquiring ships (than other companies)," he said, adding that the dry bulk market had very low prices currently, which created an incentive for aquisitions.