ADIB Secures Dh863 Million Shariah-Compliant Syndicated Loan
Abu Dhabi Islamic Bank (ADIB) has proudly announced the triumphant conclusion of a Sharia-compliant syndicated transaction amounting to Dh865 million, dedicated to financing new, energy-efficient gas carriers for BGN and Al Seer Marine. This transaction, which is the second installment of a broader syndication totaling USD 370 million, aims to support the construction of three cutting-edge Very Large Gas Carriers (VLGCs) in South Korea and Japan.
In this endeavor, ADIB played a pivotal role as the mandated lead arranger, coordinator, bookrunner, Sharia advisor, investment, and security agent. Supported by several mandated arrangers specializing in the maritime and energy sectors, including Abu Dhabi Commercial Bank (ADCB), National Bank of Fujairah (NBF), Commercial Bank of Dubai (CBD), and a strategic partner from KSA, The Islamic Corporation for the Development of the Private Sector (ICD), ADIB orchestrated the transaction seamlessly.
The documentation and coordination aspect of the transaction were expertly handled by leading global law firms Dentons, serving as the Syndicate’s Legal Counsel, and Holman Fenwick Willan (HFW), acting as the Company’s Legal Counsel.
The financing, facilitated through ABGC, a joint venture between energy and commodities trader BGN and Al Seer Marine, will pave the way for the construction of three new, energy-efficient VLGCs. ADIB explained Two vessels are scheduled for delivery in 2025, with the third expected in 2026. These vessels, boasting dual-fuel efficiency, will harness operational, economic, and environmental advantages through their Liquefied Petroleum Gas (LPG) engines. The adoption of LPG engine technology represents a significant stride towards achieving zero-carbon propulsion in the shipping industry and aligns with ambitious greenhouse gas emission reduction targets.
Mohammed Ali AlFahim, Acting Global Head of Wholesale Banking at ADIB, expressed delight in leading this syndication, emphasizing the bank’s commitment to supporting initiatives promoting sustainable development and innovation in the maritime sector. AlFahim highlighted the pivotal role these VLGC vessels will play in enhancing the UAE’s maritime prominence on the global stage and advancing decarbonization efforts in the marine industry.
Nitin Mathur, Head of Commercial Maritime Management at Al Seer Marine, hailed this transaction as a landmark achievement, underscoring Al Seer Marine’s leadership and vision in the maritime domain. He emphasized the growing confidence of local and regional banks in investing in the commercial marine sector, reflecting positively on the financial health and prospects of stakeholders.
Ozan Turgut, Head of Shipping at BGN, reiterated the trader’s unwavering commitment to maintaining a modern fleet to support its global physical trading platform. Turgut commended the collaborative efforts of all involved parties, including Al Seer Marine, banking partners in the GCC region, and legal partners Dentons and HFW, in bringing this syndicate to fruition. He underscored the significance of partnership in navigating complex financial arrangements and highlighted the UAE’s pivotal role as an energy, maritime, and financing hub.
Equipped with state-of-the-art technology and superior emissions performance features, these vessels are poised to drive forward the global energy transition and significantly bolster the UAE’s maritime standing.
Furthermore, the deployment of these cutting-edge vessels underscores a broader commitment to sustainability and environmental stewardship within the maritime industry. By embracing advanced technologies and eco-friendly propulsion systems, BGN, Al Seer Marine, and their partners are not only enhancing operational efficiency but also reducing the ecological footprint of maritime transportation.
The significance of this transaction extends beyond the immediate financial implications. It represents a strategic investment in the future of maritime transportation, aligning with global efforts to mitigate climate change and transition towards cleaner energy sources. As the world seeks to address the challenges of carbon emissions and environmental degradation, initiatives like the financing of energy-efficient gas carriers play a crucial role in driving progress towards a more sustainable future.
Moreover, this successful syndication highlights the strength of collaboration between diverse stakeholders, including financial institutions, energy traders, maritime operators, and legal experts. By pooling their expertise and resources, these entities have demonstrated their ability to navigate complex financing arrangements and bring ambitious projects to fruition.
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