GulfNav's $871M Deal Signals Strategic Shift in Energy Logistics
Dubai-listed Gulf Navigation Holding PJSC has secured shareholder approval for a AED 3.2 billion acquisition of Brooge Energy Ltd.'s assets, marking a significant expansion into the midstream oil and gas sector. The transaction, involving cash, newly issued shares, and mandatory convertible bonds , is expected to close in the second quarter of 2025, pending regulatory approvals.
The acquisition encompasses Brooge Petroleum and Gas Investment Company FZE, Brooge Petroleum and Gas Investment Company Phase III FZE, and BPGIC Phase 3 Limited. These entities operate advanced storage facilities in Fujairah, a strategic oil storage and export hub. GulfNav plans to integrate these assets to enhance its storage and logistics capabilities, aligning with its long-term vision to become a dominant player in the energy sector.
The deal's financial structure includes the issuance of 358,841,476 new shares to Brooge Energy at AED 1.25 per share, with a one-year lock-up period. Additionally, MCBs worth AED 2.336 billion will be issued to Brooge, convertible at the same price and subject to a similar lock-up period post-conversion. An extra AED 500 million in MCBs, priced at AED 1.10 per share, will be allocated to existing GulfNav shareholders, with major shareholders covering any unsubscribed bonds. A cash payment of AED 460 million completes the settlement.
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CEO Ahmad Kilani stated that the acquisition is expected to generate significant operational synergies, including cost savings from integrated logistics and increased storage capacity. Financially, the deal is projected to enhance GulfNav's revenue streams and improve EBITDA margins over the next few years. The issuance of new shares and MCBs will increase GulfNav's share capital by approximately 320%.
Brooge Energy, founded in 2013 and based in the Cayman Islands, operates through subsidiaries focused on clean petroleum products, biofuels, and crude oil storage. Its facilities in Fujairah are among the most technologically advanced in the sector, adhering to international standards. The company's strategic location outside the Strait of Hormuz positions it advantageously in global oil logistics.
The acquisition aligns with GulfNav's commitment to sustainable growth and operational excellence. Post-acquisition, the company plans to expand its storage and logistics capabilities to meet the growing demand for midstream oil and gas services in the region. By leveraging Brooge's advanced infrastructure, GulfNav aims to improve operational efficiencies, diversify its service offerings, and unlock new revenue opportunities. Additionally, the company will continue to support the UAE's sustainability goals by exploring innovative solutions, such as alternative fuel storage and reduced carbon emissions.
The transaction is subject to customary closing conditions and regulatory approvals. GulfNav's Board of Directors has been authorized to take all necessary actions to finalize the acquisition, including completing regulatory approvals, amending the Articles of Association, and overseeing capital increase procedures.
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