Gulf Navigation Completes Repayment of $2.7 Million Loan
Gulf Navigation Holding PJSC the Dubai Financial Market listed maritime and shipping company, announced successfully completing the full repayment of a loan for one of its vessels.
The $2.7 million loan was financed by “Rasmala” with an interest rate of 12%. Thus, after the mortgage has been released, the full proceeds of this vessel will pour into the Company without any deductions, which enhances the Company’s profitability and cash flow during the next short period.
This achievement comes as a continuation of the Company’s efforts to reduce financing costs, following an announcement made by the Company last August that it had refinanced 5 petrochemical tankers under new and preferential terms with a major Chinese lender.
The 5-year refinancing agreement was signed at a low interest margin not exceeding 4%, which allowed the company to completely fulfill all its obligations to some lenders and reduce the total cost of borrowing. Thus, avoiding the risks of refinancing if required in the future.
The Company further clarified that it was able to reduce financing costs by 40% compared to 2020.
Furthermore, premium costs stood at $9.5 million annually as at the end of 2020, and it is expected that this figure will be reduced to $6.5 million by the end of 2022 and continue to go down to $5 million by the end of 2023.
In addition, the amount of debt was $118 million at the end of 2020, compared to $80 million today. The Company estimates that these measures will have a positive impact on the company’s results in the third quarter of this year.
As a result of the strict measures taken 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.
Today, the Company has reached a stage that allows it to refinance its assets if the need arises, or to sell these ships in order to replace them with new ships that can win long-term contracts.