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Publish Date : 13-Jun-2014

The National Shipping Company of Saudi Arabia (Bahri), the Saudi flag carrier shipping line, is finalizing its merger deal with Vela’s fleet and operations. Vela is a subsidiary of the world’s biggest producer and exporter of oil, Saudi Arabian Oil Company (Aramco).

A landmark merger agreement was signed by the two national companies in 2012 to make the joint fleet the fourth largest company in the world in terms of ownership of 77 giant ships VLCCs industry.

Bahri CEO Saleh Al-Jasser said after completion of the merger deal estimated to be worth SR12 billion, they will have the biggest fleet in the Kingdom.

He said, "We will have a long-term accord with SR5 billion. We are going to pay them part of it in the form of shares and the balance in cash (SR3,200 million)".

He said the deal includes shifting the whole fleet of Vela, consisting of 14 VLCCs used for floating storage, 5 refined petroleum product tankers, all crew of Vela’s carriers, employees and part of its business systems, so that they can be integrated within Bahri’s structure.

Al-Jasser, describing it as valuable contribution to the national economy said, "This process is the result of a long-term vision and the hard work and commitment of all parties, in addition to our leadership and image in the industry".

He added: "The deal by itself can be a real example of cooperation between national companies in the Kingdom. Bahri will become the exclusive maritime carrier of crude oil sold by Saudi Aramco on the basis of delivery to the client by VLLCs."

Al-Jasser mentioned, "Bahri is one of the biggest shipping companies in the world and biggest fleet-owner (17 VLLCs) in the Middle East. It occupies a preeminent position among its industry peers at national, regional and international levels in all sectors of its business".

He said, "We also own the fleet of 24 tankers, the fourth in the world in terms of chemical shipments under the National Chemical Carries (NCC) with Saudi Basic Industries Corporation (SABIC) partnership".

On general cargo (GC), the official revealed that SR1,500 million has been invested in the company, which runs six GC vessels covering North America, the Middle East, the Mediterranean and India.

The partnership of this size provide the two national companies a greater ability to compete in the world markets for maritime transport and to achieve further reduction in operating and maintenance expenses. He said that the Vela was able to increase the Saudi employees on board to 20 percent of their work force.

As per to the agreed terms and conditions they will work under a long-term shipping contract. Bahri enjoys protection when freight rates fall below the minimum agreed limit.

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