Gulf Navigation commissions chemical tankers from China's Wuchang

Gulf Navigation yesterday announced plans to significantly expand its chemical tanker fleet via a strategic partnership with Chinese heavy industry giant Wuchang Group, as the com­pany moves to consolidate its debt burden.

Under the agreement, struck at Gulf Navigation’s most recent board meeting, Wuchang will build six chemical tankers for the shipping group based in Dubai.

The financial details of the arrangement were not disclosed.

Gulf Navigation said that the move aims to meet the increasing demand for transferring chemicals from the UAE and other GCC countries to global markets.

“This partnership … is a significant step that will enable us to strengthen the company’s capabilities by expanding our fleet with modern and advanced tankers,” said Khamis Juma Buamim, Gulf Navigation’s group chief executive. “This will enhance our competitiveness in the transfer of chemicals; a market that is steadily expanding and is witnessing increasing demand.”

Mr Buamim said the com­pany was seeking further strategic partnerships with foreign companies, giving no further details.

Gulf Navigation said last month that it had reduced its debt to US$21 million from $36m and hoped to consolidate all of its borrowings before the end of this year, in an attempt to end a long-running dispute with creditors.

Gulf Navigation shares closed down 0.86 per cent at Dh1.15.

The company’s shares have been among the best performers on Dubai’s stock exchange so far this year, rising 87 per cent compared with a 5 per cent gain by the emirate’s headline index.

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Gulf Navigation commissions chemical tankers from China's Wuchang

Gulf Navigation yesterday announced plans to significantly expand its chemical tanker fleet via a strategic partnership with Chinese heavy industry giant Wuchang Group, as the com­pany moves to consolidate its debt burden.

Under the agreement, struck at Gulf Navigation’s most recent board meeting, Wuchang will build six chemical tankers for the shipping group based in Dubai.

The financial details of the arrangement were not disclosed.

Gulf Navigation said that the move aims to meet the increasing demand for transferring chemicals from the UAE and other GCC countries to global markets.

“This partnership … is a significant step that will enable us to strengthen the company’s capabilities by expanding our fleet with modern and advanced tankers,” said Khamis Juma Buamim, Gulf Navigation’s group chief executive. “This will enhance our competitiveness in the transfer of chemicals; a market that is steadily expanding and is witnessing increasing demand.”

Mr Buamim said the com­pany was seeking further strategic partnerships with foreign companies, giving no further details.

Gulf Navigation said last month that it had reduced its debt to US$21 million from $36m and hoped to consolidate all of its borrowings before the end of this year, in an attempt to end a long-running dispute with creditors.

Gulf Navigation shares were unchanged at Dh1.16 midday.

The company’s shares have been among the best performers on Dubai’s stock exchange so far this year, rising 87 per cent compared with a 5 per cent gain by the emirate’s headline index.

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The UAE has been listed as one of the world’s most improved economies for doing business in the World Bank’s influential Ease of Doing Business rankings for 2017, surging into the top 30 for the first time.

The country was ranked as the 26th-easiest country in the world for doing business, up from 34th place last year, putting it ahead of countries including France, the Netherlands and Japan.

The World Bank identified the UAE as one of the top 10 most improved business environments over the past year, alongside countries Bahrain, Pakistan and Indonesia.

The UAE was judged to have shown particular improvement in the field of protection of minority investors, after new corporate governance rules published by the UAE’s Securities and Commodities Authority came into force in May.

The introduction of the new regulations helped the UAE rise to the 9th best country in the world for minority investors’ protection, up from 48th in 2016, with minor improvements in ease of starting a business.

However, the UAE’s score on resolving insolvency, calculated ahead of the approval of the country’s new bankruptcy law in September, remains weak, falling 5 places to 104th out of 190 countries.

But the UAE comfortably remains the easiest place to do business in the Arab Middle East, with Bahrain, the next-highest ranked economy, coming in at number 63, followed by Oman in 66th place.

The World Bank ranked New Zealand as the best country for ease of doing business, followed by Singapore and Denmark.

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Federal Tax Authority ready to start hiring

The country’s first federal tax office has been established ahead of the planned introduction of VAT in early 2018.

The Federal Tax Authority (FTA) is intended to be officially opened before the end of the year, according to a senior official at the Ministry of Finance, who asked not to be named.

The FTA was established by Sheikh Khalifa via law decree 13 of 2016, with the law published in the legal gazette on September 29.

The new legislation is scheduled to come into effect 90 days after its publication in the gazette.

The decree contains provisions related to the authority’s structure and responsibilities but does not contain reference to specific tax provisions.

Such provisions are at an advanced drafting stage, with the government hoping to finalise them before the end of the year, according to the Ministry of Finance official.

The new authority will have responsibility for maintaining tax records, and will liaise with other jurisdictions regarding taxation treaties, a second senior legal source told The National.

The establishment of the new tax authority comes as the six members of the GCC prepare to introduce VAT by early 2018, as member states look to diversify their economies and generate additional revenues.

The UAE’s Ministry of Finance has already begun the hiring process for the new tax authority, advertising for positions including auditors, analysts, accountants and a compliance and enforcement director on its website.

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UAE bankruptcy law could put court system under pressure

The UAE’s new bankruptcy law could come into effect by the end of the year, amid concerns that the court system may struggle to implement it effectively.

The bankruptcy law was published in the country’s official legal gazette on September 29, stating that it will come into effect three months later, according to a senior Abu Dhabi lawyer and a senior executive at the Ministry of Finance.

The state news agency Wam said on Monday evening that Sheikh Khalifa, the President, had issued Law Decree No 9 for 2016 on bankruptcy, after the Cabinet approved the new law early last month.

A copy of the new law seen by The National says it was approved from September 20.

The new bankruptcy law provides, for the first time, a comprehensive legal framework to help distressed companies in the UAE avoid collapse.

While the UAE’s commercial transactions law has more than 250 articles dealing with insolvency, such provisions offer few options to companies threatened with insolvency beyond liquidation, and are therefore hardly ever used.

The law will establish the Committee of Financial Restructuring (CFR).

This new regulatory body will oversee the procedures of financial restructuring outside the scope of the courts and have responsibility for the appointment of restructuring experts. Under the terms of the new law, creditors will be able to initiate insolvency proceedings against companies or traders in cases where debts of Dh100,000 or more are unpaid for more than 30 days.

Insolvent companies will be able to avoid liquidation via four pathways set out in the law, namely financial reorganisation, a pre-emptive settlement, financial restructuring and the raising of new funds.

The law also contains provisions blocking creditors from applying criminal charges against executives of insolvent companies for bounced cheques, when the company is undergoing a court-mandated restructuring process.

The passage of the new law has been welcomed by the legal and financial communities.

“Having a proper bankruptcy framework in place is very important for corporate restructurings, as it provides a burning platform that can precipitate action if need be,” said Paul Leggett, a director of reorganisation services at Deloitte in Dubai.

“Having such a framework gives greater clarity about potential outcomes of distressed situations for both creditors and debtors, giving them options of how to proceed and allowing them to make rational decisions, which has been largely missing from the local restructuring process.”

Such a law is likely to improve the perception of the UAE as a place to do international business, provided that it is implemented properly.

“At the high level a modern insolvency law is always a good thing, in that it helps investor confidence in that jurisdiction by reducing uncertainty about restructuring and bankruptcy,” said Rehan Akbar, an assistant vice president-analyst with ratings agency Moody’s in Dubai. “As always the devil is in the details of how it’s implemented on the ground.”

Key to the law’s success will be the capacity of the local courts system to process insolvency cases, with judges hitherto advising lawyers not to pursue court-driven insolvency cases due to the deficiencies of the current law.

“In a nutshell [the new law] says that companies and traders have to pay what they owe or face consequences, while also giving them options for rescue and restructure where there is a realistic and constructive plan in place,” said Essam Al Tamimi, senior partner at Al Tamimi and Company.

“However, it places a lot of responsibility on the shoulders of the local courts, who are charged with supervision and oversight of a lot of these restructuring and insolvency processes. It could put a huge load on the local justice system.”

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UAE bankruptcy law could to come into effect by end of this year

The new bankruptcy law could come into effect by the end of the year, amid concerns that the court system may struggle to implement it effectively.

The bankruptcy law was published in the country’s official legal gazette on September 29, stating that it will come into effect three months later, according to a senior Abu Dhabi lawyer and a senior executive at the Ministry of Finance.

The state news agency Wam said on Monday evening that Sheikh Khalifa, the President, had issued Federal Law Decree No 9 for 2016 on bankruptcy, after the Cabinet approved the new law early last month.

A copy of the new law seen by The National says it was approved from September 20.

The new bankruptcy law provides, for the first time, a comprehensive legal framework to help distressed companies in the UAE avoid collapse.

While the commercial transactions law has more than 250 articles dealing with insolvency, such provisions offer few options to companies threatened with insolvency beyond liquidation, and are therefore hardly ever used.

The law will establish the Committee of Financial Restructuring (CFR).

This new regulatory body will oversee the procedures of financial restructuring outside the scope of the courts and have responsibility for the appointment of restructuring experts.

Under the terms of the new law, creditors will be able to initiate insolvency proceedings against companies or traders in cases where debts of Dh100,000 or more are unpaid for more than 30 days.

Insolvent companies will be able to avoid liquidation via four pathways set out in the law, namely financial reorganisation, a pre-emptive settlement, financial restructuring and the raising of new funds.

The law also contains provisions blocking creditors from applying criminal charges against executives of insolvent companies for bounced cheques, when the company is undergoing a court-mandated restructuring process.

The passage of the new law has been welcomed by the legal and financial communities.

“Having a proper bankruptcy framework in place is very important for corporate restructurings, as it provides a burning platform that can precipitate action if need be,” said Paul Leggett, a director of restructuring services at Deloitte Financial Advisory in Dubai.

“Having such a framework gives greater clarity about potential outcomes of distressed situations for both creditors and debtors, giving them options of how to proceed and allowing them to make rational decisions, which has been largely missing from the local restructuring process.” Such a law is likely to improve the perception of the UAE as a place to do international business, provided that it is implemented properly.

“At the high level a modern insolvency law is always a good thing, in that it helps investor confidence in that jurisdiction by reducing uncertainty about restructuring and bankruptcy,” said Rehan Akbar, an assistant vice president-analyst with ratings agency Moody’s in Dubai. “As always the devil is in the details of how it’s implemented on the ground.”

Key to the law’s success will be the capacity of the local courts system to process insolvency cases, with judges hitherto advising lawyers not to pursue court-driven insolvency cases due to the deficiencies of the current law.

“In a nutshell [the new law] says that companies and traders have to pay what they owe or face consequences, while also giving them options for rescue and restructure where there is a realistic and constructive plan in place,” said Essam Al Tamimi, senior partner at Al Tamimi and Company.

“However, it places a lot of responsibility on the shoulders of the local courts, who are charged with supervision and oversight of a lot of these restructuring and insolvency processes.

“It could put a huge load on the local justice system.”

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UAE bankruptcy law could to come into effect by end of this year

The new bankruptcy law could come into effect by the end of the year, amid concerns that the court system may struggle to implement it effectively.

The bankruptcy law was published in the country’s official legal gazette on September 29, stating that it will come into effect three months later, according to a senior Abu Dhabi lawyer and a senior executive at the Ministry of Finance.

The state news agency Wam said on Monday evening that Sheikh Khalifa, the President, had issued Federal Law Decree No 9 for 2016 on bankruptcy, after the Cabinet approved the new law early last month.

A copy of the new law seen by The National says it was approved from September 20.

The new bankruptcy law provides, for the first time, a comprehensive legal framework to help distressed companies in the UAE avoid collapse.

While the commercial transactions law has more than 250 articles dealing with insolvency, such provisions offer few options to companies threatened with insolvency beyond liquidation, and are therefore hardly ever used.

The law will establish the Committee of Financial Restructuring (CFR).

This new regulatory body will oversee the procedures of financial restructuring outside the scope of the courts and have responsibility for the appointment of restructuring experts.

Under the terms of the new law, creditors will be able to initiate insolvency proceedings against companies or traders in cases where debts of Dh100,000 or more are unpaid for more than 30 days.

Insolvent companies will be able to avoid liquidation via four pathways set out in the law, namely financial reorganisation, a pre-emptive settlement, financial restructuring and the raising of new funds.

The law also contains provisions blocking creditors from applying criminal charges against executives of insolvent companies for bounced cheques, when the company is undergoing a court-mandated restructuring process.

The passage of the new law has been welcomed by the legal and financial communities.

“Having a proper bankruptcy framework in place is very important for corporate restructurings, as it provides a burning platform that can precipitate action if need be,” said Paul Leggett, a director of restructuring services at Deloitte Financial Advisory in Dubai.

“Having such a framework gives greater clarity about potential outcomes of distressed situations for both creditors and debtors, giving them options of how to proceed and allowing them to make rational decisions, which has been largely missing from the local restructuring process.” Such a law is likely to improve the perception of the UAE as a place to do international business, provided that it is implemented properly.

“At the high level a modern insolvency law is always a good thing, in that it helps investor confidence in that jurisdiction by reducing uncertainty about restructuring and bankruptcy,” said Rehan Akbar, an assistant vice president-analyst with ratings agency Moody’s in Dubai. “As always the devil is in the details of how it’s implemented on the ground.”

Key to the law’s success will be the capacity of the local courts system to process insolvency cases, with judges hitherto advising lawyers not to pursue court-driven insolvency cases due to the deficiencies of the current law.

“In a nutshell [the new law] says that companies and traders have to pay what they owe or face consequences, while also giving them options for rescue and restructure where there is a realistic and constructive plan in place,” said Essam Al Tamimi, senior partner at Al Tamimi and Company.

“However, it places a lot of responsibility on the shoulders of the local courts, who are charged with supervision and oversight of a lot of these restructuring and insolvency processes.

“It could put a huge load on the local justice system.”

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Shares in Dubai broke a five-day winning streak on Tuesday as investors booked profits, with bank shares closing lower after poor results.

Abu Dhabi shares also fell, while Saudi equities continued to rise.

The Dubai Financial Market General Index ended the day 0.6 per cent lower at 3,336.76.

The index bellwether Emaar Properties ended the day down 0.7 per cent at Dh6.85, while DXB Entertainments closed 1.8 per cent lower at Dh1.60.

Shares in Mashreq fell 3 per cent to Dh63. The bank announced a 25 per cent fall in third-quarter profit on Sunday.

Dubai Islamic Bank, which also this week announced disappointing results, closed 0.3 per cent lower at Dh5.28.

Tabreed was the pick of a handful of gainers, closing up 2.7 per cent at Dh1.89.

The Abu Dhabi Securities Market General Index closed 0.5 per cent lower at 4,264.44.

Gains by Etisalat were cancelled out by FGB shares, which fell 3.2 per cent to Dh10.55 ahead of the bank’s third-quarter results announcement on Thursday.

Abu Dhabi Islamic Bank shares fell 0.5 per cent to Dh3.49, after the bank announced a 1 per cent increase in quarterly profit on Monday.

Shares in Saudi Arabia, meanwhile, advanced for a fifth consecutive day, driven by gains at Al Rajhi Bank, Sabic and Saudi Mining (Ma’aden), as investor sentiment remained positive following last week’s US$17.5 billion bond issue.

The Tadawul closed up 1.4 per cent at 5,582.44, its highest level in about a month.

In Doha, the Qatar Exchange ended the day virtually unchanged, closing 0.02 per cent lower. QNB led gainers, rising 0.4 per cent to 162.40 riyals.​

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Sheikh Khalifa decrees bankruptcy law

Sheikh Khalifa, President of the UAE, yesterday issued the long-awaited new federal bankruptcy law by decree, according to the state news agency Wam.

The new law, which was approved by cabinet in September, will come into effect three months after being published in the official gazette.

The law, which contains elements of bankruptcy protection laws from jurisdictions including France, Germany and the Netherlands, provides, for the first time, a comprehensive legal framework to help distressed companies in the UAE avoid bankruptcy and liquidation.

It contains provisions to safeguard the rights of both creditors and debtors in insolvency situations, including measures that prioritise secured creditor rights and enable companies to restructure without unanimous creditor approval.

The law applies to companies established under the commercial companies law, companies that are partly or fully owned by the federal or the local government, and companies and institutions established in free zones that are not governed by existing bankruptcy provisions.

It does not apply to companies registered in the DIFC and the Abu Dhabi Global Market, or to private individuals.​

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Samsung discusses Note 7 recalls and refunds with ministry

Top UAE government officials met with Samsung yesterday to discuss a recall of the troubled Note 7 handsets following consumer complaints over cash refunds.

The Ministry of Economy told Aletihad, The National’s Arabic language sister newspaper, that the meeting was in response to complaints it had received from customers who were refused cash refunds for the popular Dh2,999 device,

The handsets were recalled for the second time this month following a series of battery fires.

Aletihad reported that some customers were declined a cash refund at unnamed service centres, being asked to provide their bank account details to receive a refund via bank transfer or credit card refund instead.

Refunds to bank accounts take up to two workings days on average, while refunds to credit cards take between 7 and 10 working days.

A representative for Samsung confirmed that officials had met with the Ministry of Economy yesterday morning to discuss the recall process for the Note 7, and that the two entities would issue a statement “in the next few days”, declining to give further details.

Samsung permanently halted production of its Note 7 earlier this month, after an initial worldwide recall of 2.5 million units failed to solve problems with the handsets’ batteries.

More than 500 Korean Note 7 owners have filed lawsuits against Samsung demanding compensation for the time spent returning their handsets and transferring data to replacement smartphones, according to local media reports. Several US customers have also filed class action lawsuits against the Korean manufacturer.

The Ministry of Economy promised Note 7 owners based in the UAE they would get a full refund if they returned their handset to the place of purchase, instructing owners to stop using their handsets and power them down.

UAE retailers yesterday said that the recall process had been running relatively smoothly, with no reports of customer disgruntlement at a lack of cash refunds.

“The recall process has been extremely busy but has gone fairly smoothly so far,” said Ashish Panjabi, chief operating officer of Jacky’s Retail, which runs Samsung stores in five loca­tions.

“We installed queuing systems in our stores and nearly tripled our staff strength to manage the extra load during this period.”

Mr Panjabi said that simple cash flow issues at certain stores may have been behind customer complaints.

“With credit cards being close to 60 per cent of sales today, they may not have had sufficient cash on hand,” he said.

“We have been smoothly processing refunds for all customers who have purchased a Note 7 device from Sharaf DG, and offering customers the option to buy another device immediately at our stores,” said Nilesh Khalkho, chief executive at Sharaf DG.

“While a majority of our customers have already taken the refund, there are a few who ­haven’t yet come back with their devices, and we are proactively contacting them to visit us and complete the refund process.”

* With reporting by Andrew Scott

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