The National Shipping Company of Saudi Arabia (Bahri) has signed a Murabaha Facility Agreement, an Islamic financing using Murabaha Structure, with Riyad Bank that will be used to finance the construction cost of five Very Large Crude Carriers (VLCC) ordered in May 2015.
The value of the Murabaha Facility is equivalent to SAR 1.4 billion (USD 380 million) and the facility has a tenure for a period of 10 years and 6 months including a maximum of 2 years grace period.
Under the arrangement, the five vessels will be mortgaged to Riyad Bank as the essential collateral for the financing.
Bahri ordered the quintet from Hyundai Samho Heavy Industries (HSHI) on May 21, 2015 and the company has an option to order five more VLCCs.
According to Eng. Ibrahim Abdulrahman Al-Omar, Bahri’s Chief Executive Officer, the order is in line with Bahri’s plans to renew and expand its fleet to meet the requirements of both local and international markets.
The fixed five VLCCs are due for delivery during 2017.