GULFNAV Shareholders Okay Acquisition of Brooge Energy

Gulf Navigation Holding, the Dubai Financial Market listed maritime and shipping company, has announced that its shareholders have approved the strategic acquisition of assets and companies owned by Brooge Energy Limited (BEL) at the Annual General Meeting (AGM) held on Thursday.

This acquisition includes Brooge Petroleum and Gas Investment Company FZE, Brooge Petroleum and Gas Investment Company Phase III FZE, and BPGIC Phase 3 Limited. The transaction is expected to significantly enhance GULFNAV’s operational capabilities and market position, solidifying its presence in the midstream oil & gas and logistics sectors.

The key highlights of the transaction include the acquisition will be settled through a combination of cash, newly issued shares, and Mandatory Convertible Bonds (MCBs), issuance of 358,841,476 new shares to BEL at $0.34 per share, with a one-year lock-up period.

Issuance of MCBs worth $136.14 million at $0.30 per share, exclusively allocated to existing GULFNAV shareholders, with major shareholders subscribing to any remaining bonds not taken up by minority investors. These MCBs are to be converted into shares within three months besides a cash payment of $125.25 million as part of the transaction settlement.

Significance of Acquisition

The acquisition aligns with GULFNAV’s long-term vision to become a dominant player in the energy sector by expanding its storage and logistics capabilities. BEL’s state-of-the-art infrastructure, which includes advanced facilities for the storage of fuel oil, crude oil, and petroleum products, will complement GULFNAV’s existing operations.

This integration is expected to drive operational efficiencies, enhance service offerings, and create substantial value for stakeholders.

GULFNAV CEO and Board member Ahmad Kilani said that the shareholders’ approval marks a transformational milestone for the company as the deal reinforces their commitment to sustainable growth, operational excellence, and long-term value creation for its shareholders.

“With this acquisition, we strengthen our position in the midstream sector, expand our service portfolio, and unlock new revenue opportunities. We are confident that the integration of Brooge’s assets will enhance our competitive edge and deliver significant value to our stakeholders,” he added.

Future Outlook

Post-acquisition, GULFNAV will focus on driving growth and operational synergies through the integration of Brooge’s state-of-the-art infrastructure and expertise. The company plans to expand its storage and logistics capabilities, enhancing its ability to serve the growing demand for midstream oil and gas services in the region.

By leveraging Brooge’s advanced facilities, GULFNAV aims to improve operational efficiencies, diversify its service offerings, and unlock new revenue opportunities. Additionally, the company will continue to support the UAE’s sustainability goals by exploring innovative solutions, such as alternative fuel storage and reduced carbon emissions. These initiatives are expected to strengthen GULFNAV’s competitive position and deliver long-term value to its shareholders.

“The acquisition is expected to generate significant operational synergies, including cost savings from integrated logistics and increased storage capacity. Financially, the deal is projected to enhance GULFNAV’s revenue streams and improve EBITDA margins over the next few years. The issuance of new shares and MCBs will increase GULFNAV’s share capital by approximately 320%.” Kilani added.

The company’s Board of Directors have been authorised to take all necessary actions to finalise the acquisition, including completing regulatory approvals, amending the Articles of Association, and overseeing capital increase procedures. The transaction is expected to be completed within the second quarter of this year, subject to regulatory approvals and customary closing conditions.