Saudi Arabia’s national shipping company Bahri inked a Murabaha financing agreement with Alinma Bank for $756m. The aim is to secure financing to support its fleet modernization program.
Under the terms of the deal, Alinma Bank will extend a credit facility worth $756m (SAR 2.835bln) to partially finance the purchase of nine very large crude carriers (VLCCs) intended to streamline the process of phasing out older vessels.
The objective is to finance approximately 70% of the purchase value for acquiring nine VLCCs, which was announced on Saudi Exchange website on August 20, 2024.
According to the Saudi Exchange announcement, “the National Shipping Company of Saudi Arabia (Bahri) finalized a purchase agreement on 19 August 2024 with Capital Maritime and Trading Corporation to acquire nine Very Large Crude Carriers (VLCCs) for an approximate amount of SAR 3.75 billion (USD 1 billion).”
The majority of the nine VLCCs are built in South Korea, with an average age of 5.9 years.
These are scrubber-fitted VLCCs and the average deadweight tonnage of each VLCC is around 311,500.
As it is reported on the Saudi Exchange website, the vessels are expected to be delivered to Bahri in multiple batches before the end of the first quarter of 2025.
Meanwhile, the transaction announced in late August is expected to significantly advance Bahri’s fleet modernization plans.
Basil Abulhamayel, chief financial officer at Bahri, said: “We are delighted to partner with Alinma Bank to finance one of our significant fleet modernization drives.
“The enhanced financial capabilities from this collaboration will fuel our efforts to improve our overall fleet competitiveness that will lead to enhancing the company’s revenues and profitability, aligning with our long-term strategic goals. With these strengthened capacities, we are confident in supporting the Kingdom’s vision to become a global leader in maritime and logistics in line with Vision 2030.”
