GulfNav Settles with NAT over Nordic Harrier Case

Dubai-listed tanker operator Gulf Navigation Holding has signed a settlement agreement with one of its major creditors, Nordic American Tankers Limited, Bermuda (NAT), over a 2014 arbitration award.

The arbitration case related to the 6-year bareboat charter with GulfNav of the Suezmax vessel Gulf Scandic (now named Nordic Harrier) covering the period 2004 to 2010.

When the vessel was redelivered to NAT by GulfNav in October 2010, it was in very poor technical condition. The vessel had not been technically operated according to sound maintenance practices by the charterer. NAT had the vessel repaired in the autumn of 2010/spring 2011, and made a claim against GulfNav for costs incurred. A London arbitration panel ruled in favour of NAT back in 2014, and awarded the company USD 10.2 million plus direct costs and calculated interest.

Under the terms of the agreement with NAT, GulfNav will now issue mandatory convertible bonds with a face value of AED 37.34 million (USD 10.16m) as full and final settlement for claims made by NAT. The bonds will be issued prior to August 20, 2015, subject to regulatory approvals.

The settlement follows the company’s recent report of a net profit growth of 172 per cent to AED 10.042 million (USD 2.74 million) in the first half of 2015 amidst intensive efforts to address creditor issues. GulfNav now has a total capital of AED 551.7 million.

Hazza Baker Al Qahtani, Founder and Chairman of Gulf Navigation Flolding PJSC, said: ”We appreciate the full support given by our shareholders, investors and government regulators in our efforts to resolve pending creditor concerns. They were all instrumental to our successful negotiations with Nordic American Tankers Limited and will definitely be crucial to similar ongoing talks with other creditors. Our exceptional profit for the first half of this year validates our improving financial position and we expect to direct our focus more on future growth in the coming months.”