Bahri, APICORP Set Up USD 1.5 Bn Fund to Buy 15 VLCCs

The National Shipping Company of Saudi Arabia (Bahri) and the Arab Petroleum Investments Corporation (APICORP) have inked an agreement on July 17 to launch the USD 1.5 billion APICORP Bahri Oil Shipping Fund (ABOSF) aimed at acquiring 15 Very Large Crude Carriers (VLCCs).

The fund will assist Bahri in increasing its VLCC fleet and will be realized in three phases with the total investments composed of debt and equity, according to Bahri.

APICORP will be the main investor and fund manager, whilst Bahri will be exclusive commercial and technical manager. In addition, APICORP will invest 85 percent in the fund, with Bahri investing the remaining 15 percent.

“This fund will not only reduce Saudi Arabia’s dependence on external crude carriers but also its earnings will be reinvested in the local economy. As with any other initiative, our growth strategy for this investment, firmly falls in line with Saudi Arabia’s plans for future development as laid out in the Kingdom’s Vision 2030,” Abdulrahman Mohammed Al Mofadhi, Chairman of Bahri, said.

The ABOSF is to be a closed-end fund with a ten-year life period and will deliver returns derived from the commercial employment of the VLCCs.

Bahri’s fleet currently consists of 36 VLCCs and ten newbuild orders scheduled for delivery in 2017/18.