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Gulf Navigation Holdings, a maritime and shipping company listed on the Dubai Financial Market, has announced the completion of the repayment of a US$2.7 million loan on one of its ships.
A report by WAM said the loan was funded by “Rasmala” at an interest rate of 12%. Therefore, upon release of the mortgage, the entire proceeds of the vessel will flow to the company without any deductions, which will improve its profitability and cash flow.
The achievement follows the company’s continued efforts to reduce financing costs, following an announcement last August that it had refinanced five petrochemical tankers with a major Chinese bank under new favorable terms.
low interest
The five-year refinancing agreement is signed at a low interest rate of no more than 4%, allowing the company to fully meet all obligations to some lenders, reducing overall borrowing costs.
The company further clarified that it was able to reduce financing costs by 40% compared to 2020. In addition, the cost of premiums was AED 35 million (US$ 9.53 million) per annum by the end of 2020, which is expected to fall to AED 24 million by the end of 2022 and continue to fall to AED 18 million by the end of 2023 .
The company’s total debt stood at AED433 million at the end of 2020, compared to AED294 million currently. The company expects these measures to have a positive impact on its third-quarter results this year.
strict measures
Thanks to the stringent board and cost control policies, the company today owns two ships without any commitments or loans, which is a remarkable achievement as all ships were mortgaged to lenders in the past.
Currently, the company has reached a stage where it can refinance its assets if needed, or sell ships to replace them with new builds that can win long-term contracts. — arab trade news agency
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