Maritime Cluster – Dubai Holding, the only listed crude oil tanker operator in Dubai, achieved a much improved result last year, with losses narrowing from Dh237 million (US$ 64.6 million) in 2010 to Dh73 million (US$19.87 million) in 2011. The ongoing weakness of the shipping market globally saw revenues fall by around 18%, however, compared with the previous year, as freight rates declined. Speaking at the announcement of these results, Gulf Navigation chairman Abdullah Al Shuraim said it had been a tough year for the company. However he added: ”We remain focused on the key strategic targets that we have set ourselves and, in particular, the continued expansion of the VLLC fleet.” Gulf Navigation has said it aims to add two more VLCC tankers, taking its fleet to nine ships, and also to expand the number of chemical tankers it operates to 12. Drydocks World Dubai
One of the biggest shipping companies to have an operational base in Dubai is United
US$751 million, 67 per cent up on 2010. “Since
for the year to December 2011 was 65%
Arab Shipping Company (UASC). In May this
the decline in global container volumes in 2009,
above expectations and it achieved a net profit
year, the company took delivery of the ninth and
DP World has worked hard to build a more
of around US$118 million. In addition, strong
last vessel in a new fleet of 13,500teu container
robust and profitable portfolio. Our 2011 results
growth has been witnessed by the group in
ships, an initiative that will greatly strengthen
reflect this,” adds Sultan bin Sulayem.
recent months with DWD winning contracts said
the company’s position within the liner shipping
to be worth more than US$250 million since the
trades. The vessels, all built at Samsung
turn of the year.
Heavy Industries in South Korea, represent an
Another shipping-related business that is effectively controlled by the government of Dubai
investment of around US$1.5 billion.
is the region’s leading shiprepair and conversion
Key contracts in-hand include a deal
yard, Drydocks World Dubai (DWD). An ill-timed
signed with Singapore-based AET to convert
The nine new ships will be deployed on
expansion overseas left DWD with a substantial
two newbuild 107,000dwt aframax tankers
UASC’s main trade routes between the Far East,
amount of debt, around US$2.2 billion, but there
into Modular Capture Vessels (MCVS).The
Arabian Gulf, Red Sea and Northern Europe.
now appears to be light at the end of the tunnel.
two vessels, Eagle Texas and Eagle Louisiana,
According to Jorn Hinge, president and chief
DWD has reached agreement with a majority
arrived in Dubai in early 2012 and will both be
executive officer of UASC: “The ships that are in
of the group’s syndicated lenders, giving it the
completed before the end of this year.
service already are living up to expectations and
necessary level of support to implement the
DWD has also secured an order from the
are providing substantial savings in operational
restructuring of its debt over a five year period.
Norwegian firm, Aibel, to build a platform
costs. Combined with recent freight rate
While a minority of the lenders have still to
structure to receive power generated by offshore
increases, this has resulted in a substantial
indicate their backing for the plans, the group
wind farms in the German sector of the North
improvements in results for UASC.”
says it is confident the absence of support from
Sea. Work starts this July at DWD on building the
The investment in the so-called A13
this minority will have no impact on the process
new platform and is expected to be completed
class vessels is expected to yield significant
of getting the business back on a secure
by December 2013.
economies of scale, substantially reducing
Shipping companies based in Dubai are
per teu transportation cost. This should allow
However, to ensure the restructuring goes
also seeing signs of a recovery and a return
UASC to compete more effectively on the main
ahead without any threat from the minority
to greater financial stability. Gulf Navigation
east-west trades over the next few years.
long-term financial footing.
of debtors that have still to agree, the company has filed for protection under Dubai’s Decree 57. The Government of Dubai passed Decree No. 57 in 2009 to allow groups such as DWD, a Dubai World Group subsidiary, to implement restructuring where proposals have the support of a significant majority of lenders, but where there is an absence of the 100% buy-in needed to implement its plans successfully. The DWD Plans now will go before a special Tribunal, but with over 75% of lenders now reported to be behind the plans, the restructuring is expected to get the go-ahead. DWD points out its as yet unaudited EBITDA
One of UASC’s latest newbuildings
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