DFM-listed Gulf Navigation Holding’s shareholders approved the firm’s AED 3.29 bn acquisition of three of Nasdaq-listed Brooge Energy subsidiaries, after reviewing two separate valuation reports last week, according to a press release published on Friday. GulfNav’s board greenlit the acquisition of Brooge Petroleum and Gas Investment Company from Brooge Energy last September.

What we know: The acquisition will be settled through a mix of funds, new shares and mandatory convertible bonds (MCBs), resulting in a 220% capital hike, GulfNav CEO Ahmed Kilani said in the press release. The transaction includes an AED 460 mn payment, and GulfNav plans to issue some 358.84 mn shares to Brooge at AED 1.25 apiece, along with AED 2.3 bn in MCBs at the same price with a one-year lock-up post conversion. That is in addition to AED 500 mn in MCBs to existing shareholders at AED 1.1 per share.

The rationale: “The acquisition is expected to generate significant operational synergies, including cost savings from integrated logistics and increased storage capacity. Financially, the deal is projected to enhance GulfNav’s revenue streams and improve EBITDA margins over the next few years,” Kilani added.

What’s next? The acquisition is expected to be completed in 2Q 2025, subject to regulatory approvals.

Patchy financials: Brooge Energy incurred net losses of USD 3.5 mn in 1H 2024, down from profits of USD 37.4 mn the previous year. Meanwhile, GulfNav posted an 11.2% y-o-y decline in net income to AED 24.7 mn in 1H 2024.

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