Dubai’s Gulf Nav down after confirming rights issue

Shares in Dubai-listed shipping firm Gulf Navigation Holding (GulfNav) have slid more than 3 per cent after the company announced plans for a rights issue.

The firm said on Tuesday that it intended to increase its capital by Dhs448.33m ($122m) to Dhs1bn ($272.2m) following a general assembly resolution approved unanimously in June 2016.

This will be distributed over one billion new shares at a par value of Dhs1 per share without an issuance premium, potentially diluting existing shareholders.

Gulf Navigation said the rights issue would be launched in the first quarter of the year and would support its expansion plans including its intention to double its fleet size to 20 vessels by 2020.

“We are confident that we have all the required expertise to win a large share of this market, and we plan to be ready by having the capabilities and the fleet size sufficient to keep up with this expansion,” said managing director and group CEO Khamis Juma Buamim, citing growing demand to ship petroleum products from GCC countries.

Read: Gulf Navigation appoints new CEO as part of restructuring

The company aims to increase its revenues by 300 per cent by 2021 through the plan, which will also be supported by a $250m sukuk issuance provided in stages.

GulfNav shares were down 3.85 per cent on Tuesday from an open price of Dhs1.28 to Dhs1.25.

The decline continued a downward trend from a mid-October high of Dhs1.53.

Read: Dubai’s Gulf Navigation reaches settlement over oil tankers