Dubai: Gulf Navigation is set to expand its tanker operations and sell off its crude carrier fleet after one of its vessels was seized in Holland earlier this month.

In a statement to the Dubai Financial Market (DFM), the Board of Directors said they would recommend its shareholders vote in favour of selling its only two very large crude carrier (VLCC) vessels.

The Board of Directors met on Friday to discuss the seizure of its Gulf Sheba crude carrier vessel in the port of Rotterdam.

The vessel was confiscated more than a week ago by Norwegian bank DNB, a agent for the lenders of the vessel, after Gulf Navigation defaulted on repayments.

Dr Sandeep Kadwe, Managing Director at Gulf Navigation, was left surprised by the seizure.

He said that there was “around $200,000” of repayments due at the time of the arrest but that the amount was not significant and had been available to the lenders.

“We were in continuously talks with the lender and even gave them a proposal on how we could proceed in selling the vessel. We were expecting a formal reply but unfortunately the vessel was seized,” he said.

Gulf Navigation has two crude carriers in its fleet and eight chemical tankers.

Kadwe said the company had already planned on selling the two crude carriers prior to the confiscation of Gulf Sheba.

He said that the company would focus on its chemical tanker operations and look to add up to six chemical tanker vessels to its fleet.

The Board will call an extraordinary general meeting (EGM) to seek approval to sell the two vessels and approval to “review and approve business plan and capital share”, “capital raising plan, providing authority to [the] Board,” and “increase shareholding limit for foreign investors”.

Kadwe said the company was expecting “some interest” by potential foreign-based investors.

The Chairman and Managing Director also briefed the Board on “positive communications” with major shareholders to inject cash into Gulf Navigation.

Kadwe said that it was negotiating for the best possible terms with buyers and that it intended to get the maximum value for both vessels.

He said it was not a distressed sale despite the vessel’s seizure, however he believes the company has been negatively affected by the arrest.

“We were negotiating for a slightly higher price than we may get now if the seizure had not taken place,” he said.

However, he said, we are still in continuous dialogue with the investors and we expect to sell the vessels in the few weeks.

Both of Gulf Navigations crude carrier vessels have outstanding loan amount against them.

Kadwe said that Gulf Navigation was working hard to protect the interest of its shareholders and that it had received positive indication from key shareholders who may want to invest.

“We are confident in protecting the interest of our business partners,” he said.

Kadwe said that Gulf Navigation was exiting the VLCC segment and had no plans to replace them.

Gulf Navigation closed up 3.36 per cent at 0.308 fils on the DFM on Sunday.