Abu Dhabi Islamic Bank (ADIB) has announced the successful closure of a sharia compliant syndicated transaction worth AED865 million ($235 million) for BGN and Al Seer Marine to finance new and energy-efficient gas carriers. 

 

This financing marks the second tranche of a larger syndication amounting to $370 million, which will be used to finance the construction of three state-of-the-art Very Large Gas Carriers (VLGCs) in South Korea and Japan.

 

ADIB acted was as the Mandated Lead Arranger, Coordinator, Bookrunner, Shari’a Advisor, Investment and Security Agent on the deal, and was supported by several mandated arrangers specialised in the maritime and energy sectors including Abu Dhabi Commercial Bank (ADCB), National Bank of Fujairah (NBF), Commercial Bank of Dubai (CBD), and a strategic partner from KSA The Islamic Corporation for the Development of the Private Sector (ICD), a multilateral development financial institution and the private sector arm of Islamic Development Bank (IsDB) Group. 

 

The documentation and coordination of the transaction were handled by leading global law firms Dentons, as the Syndicate’s Legal Counsel, and Holman Fenwick Willan (HFW) as the Company’s Legal Counsel. 

 

Three new energy-efficient VLGCs

The financing, conducted through ABGC, a joint venture between energy and commodities trader BGN and Al Seer Marine, will facilitate the construction of three new energy-efficient VLGCs, with two vessels slated for delivery in 2025 and the third vessel expected in 2026. 

 

The vessels will be dual-fuel efficient, and will enjoy operational, economic and environmental efficiencies through their Liquefied Petroleum Gas (LPG) engines. LPG engine technology is a step towards zero-carbon propulsion of vessels and the shipping industry achieving its ambitious greenhouse gas emission reduction goals.

 

Mohammed Ali AlFahim, Acting Global Head of Wholesale Banking at ADIB, commented: "We are delighted to lead this syndication, which underscores our commitment to supporting strategic initiatives that promote sustainable development and innovation in the maritime sector. The completion of these VLGC vessels will not only enhance the UAE's maritime position but also contribute to the nation's role as a critical maritime hub on the global stage and will contribute to decarbonisation efforts in the marine industry." 

 

Financial health and prospects

Nitin Mathur, Head of Commercial Maritime Management at Al Seer Marine, said: "This landmark deal underscores Al Seer Marine’s leadership and vision in the maritime sector. Through the closure of the syndicated financing for ABGC and our strategic partnership with BGN, our position as a leading commercial vessel owner is being realised. This success showcases the increasing confidence and willingness of local and regional banks to invest in the commercial marine sector, reflecting positively on our financial health and prospects."

 

Ozan Turgut, Head of Shipping at BGN, emphasised the trader’s long-term commitment to developing and maintaining a modern fleet to support its global physical trading platform: "We are growing our logistics capability to create much-needed capacity for our traders who continue to supply the world with transitional fuels such as LPG (liquefied petroleum gas), ammonia and other commodities. We are proud to have collaborated closely with Al Seer Marine, our banking partners in the GCC region, and legal partners Dentons and HFW to bring this syndicate to completion. This collaboration highlights the power of partnership in achieving complex financial arrangements and reflects the UAE's pivotal role as an energy, maritime, and financing hub."

 

The vessels, equipped with cutting-edge technology and superior emissions performance features, will help to advance the global energy transition and will significantly contribute to enhancing the UAE's maritime position.--TradeArabia News Service