Gulf Navigation Holding, a Dubai Financial Market-listed maritime and shipping company, has announced completing the repayment of a $2.7 million loan on one of its vessels. 

 

The loan was financed by ‘Rasmala’ at an interest rate of 12%, a WAM report said. Thus, after the mortgage has been released, the full proceeds of this vessel will pour into the company without any deductions, which will enhance its profitability and cash flow.

 

This achievement comes as a continuation of the company's efforts to reduce financing costs, following an announcement made by it last August that it had refinanced five petrochemical tankers under a new and preferential terms with a major Chinese lender. 

 

Low interest

The five-year refinancing agreement was signed at a low interest not exceeding 4%, which allowed the company to completely fulfil all its obligations to some lenders and reduce the total cost of borrowing.

 

The company further clarified that it was able to reduce financing costs by 40% compared to 2020. Furthermore, premium costs stood at AED35 million ($9.53 million) annually as at the end of 2020, and it is expected that this figure will be reduced to AED24 million by the end of 2022 and continue to go down to AED18 million by the end of 2023. 

 

The company’s total debt was AED433 million at the end of 2020, compared to AED294 million currently. The company estimates that these measures will have a positive impact on its results in the third quarter of this year.

 

Strict measures

As a result of the strict measures enforced by the Board of Directors and its cost control policy, the company today owns two vessels without any commitments or loans, which is a tremendous achievement, as all its vessels were always mortgaged to lenders in the past. 

 

Currently, the company has reached such a stage as would allow it to refinance its assets if the need arises, or to sell ships to replace them with newbuilds that can win long-term contracts.-- TradeArabia News Service