Dubai: In what could be a significant boost to its cashflow position, Gulf Navigation Holding has restructured its biggest loan exposure of Dh200 million. As per the new terms, the cost of paying off the debt has been brought down by 25 per cent, for a saving of Dh4 million, annually.
The deal was struck with Australis Maritime Ltd., which provides maritime finance advisory. These and other related moves could chart Gulf Navigation’s return to profitability by the end of this year.
Gulf Navigation – which operates seven large vessels and four crew boats – currently has over Dh700 million in accumulated losses, which it is trying to cut down on through refinancing and sell-off of non-profitable group businesses. A three-year turnaround plan has been confirmed, and this where the debt refinance deal will come in handy.
The company has aid all its obligations to Abu Dhabi Commercial Bank, thus “reducing the overall debt,” Gulf Navigation said. It is “working on reaching an agreement with the majority of the lenders on new and flexible terms that will allow the company to adapt to the current market conditions,” the statement added. “Furthermore, the company has made major changes to the operating model and reduced administrative expenses in order to enhance growth and sustainability.”