Gulf Navigation appoints Alseddiqi to board

Gulf Navigation shares rose yesterday after Abu Dhabi Financial Group’s chief executive, Jassim Alseddiqi, was appointed to the company’s board.

It was the sole gainer in Dubai, rising 3.4 per cent at 60 fils. The stock is one of only a handful to have gained over the past month, in which time the Dubai Financial Market General Index has declined 16 per cent.

Mr Alseddiqi’s appointment, which comes less than a week after the resignation of Gulf Navigation’s chairman, Hazza Al Qahtani, and six other board members, may lead to the distressed assets specialist taking a more proactive role in the running of the company.

Parag Jain, Gulf Navigation’s chief executive, said the outgoing board members had resigned “for personal reasons”, declining to elaborate further.

Salem Ali Al Zaabi, the former deputy chairman, has taken over the chairman’s role.

ADFG disclosed in August that it had increased its shareholding in Gulf Navigation, held via its Integrated Capital subsidiary, to 5.19 per cent. Integrated Capital’s shareholding in the company has subsequently increased to 6.01 per cent.

Mr Alseddiqi said in November that ADFG would consider raising its shareholding in the company to more than 50 per cent “if the price was right”.

ADFG declined to comment on whether it was actively seeking to acquire further shares in the company.

Gulf Navigation also announced yesterday that its shareholders had granted approval for the first round of a US$60 million mandatory convertible bond programme, which it hopes would help to ease pressure from its creditors.

The first tranche of bonds, worth $25 million, will be offered first to existing shareholders and subsequently to the company’s creditors.

Mr Jain did not comment on the timeline for the offering, saying that the company was still awaiting approval of the prospectus from the Securities and Commodities Authority.

“People have started regaining trust in Gulf Navigation, as our share prices have improved in the last seven to eight months,” Mr Jain told The National.

“With the mandatory convertible bond programme we hope we’ll be in a healthier financial position and remove some of the uncertainty surrounding our balance sheet.”

Despite posting a profit of Dh5.6m in the third quarter of last year, Gulf Navigation remains “in breach of specified covenants with its lenders”, according to its most recent financial statements.

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