Gulf Navigation Holding will not be proceeding with its plans to buy a stake in Singapore-listed OSV player Atlantic Navigation Holdings.
“The board wishes to update shareholders that after extensive discussions between the major shareholder, the company and Gulf Navigation, the parties have been unable to come into agreement on the definitive terms of the proposed transaction,” Atlantic said in a statement.
“Accordingly, the parties have agreed to terminate further discussions on the proposed transaction.”
Gulf Navigation emerged as a potential investor in Atlantic at the start of this year as it looked to expand its offshore arm.
Atlantic is listed on Singapore’s sponsor-supervised listing board Catalist, which is modeled on the London Stock Exchange's Alternative Investment Market (AIM).
The company owns a young fleet of over 25 offshore support vessels and operates out of the UAE, serving customers in the Middle East and India.
If the deal had gone ahead it would have given Gulf Navigation a significant position in the Gulf Cooperation Council (GCC) regional OSV oil and gas market.
Separately, Atlantic said its Dubai-based subsidiary Atlantic Maritime Group Fze had secured a $8.5m loan from Mubarak Abdullah Al-Suwaiket, Atlantic’s country representative in the Middle East.
The five-year loan has an interest rate of 10% and will go towards the partial settlement of the cash portion and mobilization costs of five OSV newbuildings from China.
Conditions tied to the loan include the issuance by Atlantic of a $9.35m promissory note issued in the favour of the lender, made up of the principal amount of the loan plus “financial charges” of $850,000, which will mature 12 months after Atlantic receives the loan.
In addition, Atlantic chief executive Wong Siew Cheong has pledged 50m of his own shares held in Atlantic, equivalent to 19.2% of the total issued share capital of the company to Al-Suwaiket as security for the loan.
Atlantic will also issue a corporate guarantee and a second lien on the OSVs AOS Valliant, AOS Valor, AOS Eagle, AOS Venture, and AOS Emerald as part of the deal.
The five OSVs were part of an order for seven vessels ordered at China’s Wuhan Shuangliu Wuchang Shipbuilding Industry Co in June 2016 to support long-term charter ontracts worth $236m awarded by an unnamed Middle Eastern national oil company.
The first batch of five new vessels out of seven new vessels have been delivered to Atlantic for loading on to a dry-tow vessel to prepare for mobilisation to the Middle East.
In addition, Atlantic said it had received a $20.4m term loan from the company’s UAE bank to fund the oputstanding purchase price of the five vessels.
