1.3-billion-dollar merger between Bahri and Vela creates one of the world’s largest oil shipping fleets
Saleh Al-Jassir, left, speaks, during a news conference to announce the conclusion of a corporate merger deal between the National Shipping Company of Saudi Arabia (Bahri) and the Saudi Aramco-owned crude oil tanker company Vela International Marine Limited (Vela), on Monday, June 16, 2014, in Riyadh Saudi Arabia. (Asharq Al-Awsat/Iqbal Hussein)
Riyadh, Asharq Al-Awsat—Saudi Arabia on Monday announced the conclusion of due diligence measures for its biggest private sector corporate merger to date, valued at 4.8 billion Saudi riyals (1.3 billion US dollars).
The deal, between the National Shipping Company of Saudi Arabia (Bahri) and the Saudi Aramco-owned crude oil tanker company Vela International Marine Limited (Vela), will create the world’s fourth-largest oil shipping fleet.
Bahri Chief Executive Saleh Al-Jasser said the merger will increase Bahri’s oil fleet of giant oil tankers to 31, after adding the 14 tankers from Vela’s fleet to the 17 already owned by Bahri, raising its share of the world’s shipping market—which he said consists of some 640 giant tankers—to five percent.
Bahri will now become the exclusive provider of crude oil shipping services for Aramco, Saudi Arabia’s state-owned oil and gas company.
The merger—first announced in November 2012—will see Bahri pay 3.1 billion riyals (8.3 million dollars) in cash and issue 7.87 million shares valued at 22.25 riyals (5.9 dollars) per share via a capital mechanism—Saudi Vela–Aramco—allowing it to acquire 20 percent of Bahri’s capital.
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