Gulf Navigation (GulfNav), one of the leading Maritime and Shipping companies in the region, has successfully completed its share buyback process on the 26th February 2010, buying a total of 42 Million Shares. The company has bought the shares with a price range between AED 0.56 and 0.63 per share.
GulfNav has had the approval on the buyback process since last year, on February 2009, and the approval was given for the maximum limit rate at 10%. Yet the board of directors decided to use 5% only and consider additional purchases later in the year.
GulfNav has been seizing the opportunity to buy-back its shares since last year, and it has been carefully observing the market since 2009 in order to capture the right chance, and has successfully achieved that target by purchasing its shares back at a relatively lower price than its par value, which is at AED 1.00.
Per Wistoft, CEO of Gulf Navigation Holding, explained the reasons behind the company's decision to perform a share buyback saying: "I would like to acknowledge that we are satisfied with buying our shares back at quite somewhat a lower price than its original cost. We believe that our stock price is undervalued, the company is rich in cash, and this decision was made by the Board of Directors after which we had carefully studied the market and decided to act upon the situation".
He also added: "We have been unnecessarily affected by the economic drop that hit Dubai in the last 6 months. Investors considered us as part of this area, not realizing that we are highly independent from local markets and mainly focus on the International level of the business. We were thus faced with several situations where investors have pulled back their investments, and this of course resulted in a lower share price in the stock market".
Wistoft explained that the company is yet to decide on the future of the stocks bought, and considering that this is the first time that GulfNav performs a share buyback operation, and the management and the Board of Directors will have to study the options thoroughly before taking any decision about the bought stocks.
GulfNav is one of the leading shipping and maritime companies in the region. The company owns and operates modern ships for crude oil and petrochemicals to a large number of clients globally, with its 11 specialized subsidiaries and 15 owned tankers including new buildings and charters. GulfNav is the only shipping and maritime company listed in the Dubai Financial Market.
