Gulf Nav Faces Shareholder Resistance Over Brooge Acquisition Pricing
Deal News | Mar 04, 2025 | Zawya
Gulf Navigation Holding (Gulf Nav) is set to acquire Brooge Petroleum and Gas Investment Company (BPGIC) from Brooge Energy Limited (BEL), yet faces discontent from minority shareholders regarding the proposed share and bond conversion price. The conversion price, at AED 1.25 ($0.34), is significantly lower than the AED 3 suggested by the Securities and Commodities Authority (SCA), creating tensions among shareholders who fear excessive dilution of their holdings. The board has called for approval of the acquisition at an upcoming general assembly. The deal involves issuing AED 500 million in mandatory convertible bonds, prioritizing minority shareholders, alongside an AED 460 million cash payment and issuance of AED 359 million in new shares and AED 2.3 billion in convertible bonds to BEL. These terms have heightened concerns about dilution in favor of Brooge. This transaction comes at a time of scrutiny for BEL, amid controversies including past penalties for financial discrepancies.
Sectors
- Maritime and Oil Storage
- Financial Services and Regulatory
Geography
- United Arab Emirates – The involved companies, Gulf Navigation Holding and Brooge Energy, are based in the UAE, and the acquisition is subject to UAE regulatory scrutiny.
- United States – Brooge Energy Limited is listed on NASDAQ and has faced legal and regulatory issues in the US, such as SEC penalties and lawsuits.
Industry
- Maritime and Oil Storage – The article primarily discusses Gulf Navigation Holding, a key player in maritime logistics and oil storage, and its acquisition target, Brooge Petroleum and Gas Investment Company.
- Financial Services and Regulatory – The involvement of the Securities and Commodities Authority (SCA) in valuing the acquisition highlights the influence of financial regulation in corporate transactions.
Financials
- AED 1.25 – Proposed conversion price per share for the acquisition by Gulf Navigation.
- AED 3 – Conversion price suggested by the Securities and Commodities Authority (SCA).
- AED 500 million – Total mandatory convertible bonds to be issued to current shareholders.
- AED 460 million – Cash payment component of the acquisition deal.
- AED 359 million – Value of new shares to be issued to Brooge Energy Limited.
- AED 2.3 billion – Value of convertible bonds to be issued to Brooge Energy Limited for the acquisition.
- AED 5.50 – Gulf Nav's actual share price as of the last closing.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Gulf Navigation Holding | Acquiring Company | Company | Gulf Navigation is a UAE-based maritime services provider acquiring Brooge Petroleum and Gas Investment Company. |
| Brooge Petroleum and Gas Investment Company (BPGIC) | Target Company | Company | The oil storage subsidiary of Brooge Energy Limited being acquired by Gulf Navigation. |
| Brooge Energy Limited (BEL) | Selling Company | Company | Parent company of BPGIC, owning the target entity and listed on NASDAQ. |
| Securities and Commodities Authority (SCA) | Regulatory Body | Government | UAE's financial regulatory authority that provided an independent valuation of the acquisition. |
| Ziad Qaimari | Analyst | Person | Published analysis of the transaction and discussed shareholder concerns. |