KSA: Aramco sells Vela to Bahri

The National Shipping Company of Saudi Arabia (Bahri) is set to become the fourth largest owner of very large crude carrier (VLCC) if a proposed merger of fleets and operations between them and Saudi Aramco’s own subsidiary called Vela International Marine Limited is finalized after the successful signing of a non-binding memorandum of understanding. The deal is worth $1.3 billion and will be paid for by Bahri through cash and stocks and will see the incorporation of business systems and the shifting of management responsibilities, personnel and ships to Bahri.
The consideration will comprise a cash payment of $832.75 million in addition to 78,750,000 new Bahri shares to be issued to Vela at an agreed price of SR 22.25 per share, representing a 20 percent shareholding in Bahri after the proposed share issuance on a fully diluted basis. Bahri will now be Saudi Aramco’s exclusive transporter and both companies have voiced their desire to further their cooperation in the maritime business.
Saudi Aramco’s president and CEO hopes the deal will help in building “a strong company that can leverage its capabilities in the shipping sector and would meet its growing business portfolio” while Bahri’s Chairman described it as “a transformational step for Bahri to strengthen its strategic partnership with Saudi Aramco and offers expanded future growth opportunities to create long-term value for our shareholders.”
Saudi Aramco posses the biggest crude oil reserves and boasts of the highest daily oil production in the world. It also operates the largest single hydrocarbon network and owns the largest oil field. Bahri now has 32 VLCCs, 20 chemical tankers, five product tankers, four roll-on roll-offs and 16 vessels under-construction making it one of the biggest maritime service providers in the Middle East.

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