The National Shipping Company of Saudi Arabia (Bahri) has secured Murabaha financing – a Shari’a compliant structure in which an intermediary buys a property before selling to the prospective buyer at an agreed price – for the takeover of Saudi Aramco’s Vela International shipping subsidiary. JP Morgan Chase, NA (Riyadh Branch), Samba and the Saudi British Bank (SABB) will provide SR3.18bn ($850mn) to finance the cash consideration of the Vela takeover and the associated costs.
Bahri says the bridge financing is for 12 months, during which time it will mortgage Vela vessels in favor of the financing banks. The company will also arrange for Shari’a compliant long-term financing to repay the bridge loan. Bahri announced the loan deal to Saudi Arabia’s Tadawul stock exchange on 22 June, after the company’s extraordinary general assembly voted in favor of the fleet merger. The vote was the last regulatory hurdle before the takeover. (CONTINUED - 312 WORDS)