Al Seer Marine acquires Very Large Crude Carriers valued at AED 404m for growing global crude oil market

5

Acquisition on target with Al Seer Marine’s strategic expansion plans to become major global player, acquiring up to 15 ships in 2022

  • New vessels have a combined carrying capacity of 640,000 DWT
  • Tankers expected to provide IRR of greater than 20%

Abu Dhabi, UAE: Al Seer Marine PJSC (ASM), a global player across multiple marine sectors and subsidiary of International Holding Company (IHC), has acquired two Very Large Crude Carriers (VLCC) for its growing fleet.

With a total value of AED 404 million, the crude oil tankers, MV Twin Castor and MV Twin Pollux, each have a carrying capacity in the upper range of 320,000 deadweight tonnage (DWT), allowing for crude oil cargo, provisions, lubricant and fuel.

Under current market conditions, these newly acquired tankers are expected to provide estimated returns of more than 20%. This is largely due to a forecasted global increase in tonne mile demand fueled by an uptick of crude oil production by 4% in 2022, and the declining global VLCC orderbook, which is down to 5.8% of the global fleet of 440 million DWT of crude oil tankers.

Al Seer Marine has increased its fleet by acquiring 9 ships and is analyzing expansion initiatives in crude and product tankers, gas tankers, and dry bulk shipping sectors, with short-term plans of acquiring 10 to 15 ships in 2022. The company recently acquired two liquified petroleum gas (LPG) tankers valued at a combined AED 246 million, and has two 86,000 cubic meters Very Large Gas Carriers (VLGC) currently under construction as part of a joint venture with BGN International.

Guy Neivens, CEO of Al Seer Marine, said: “This acquisition of two new crude oil tankers is strategically driven given the current market conditions, and we expect to see strong returns as oil demand recovers and ship recycling returns to normal levels. With 19% of existing global crude carrier supply dated at over 18 years old, they will be due for scrapping or recycling in the next few years. This will cause the global fleet numbers to shrink even further, presenting an opportune time for Al Seer Marine to expand and continue our trajectory in becoming one of the largest commercial shipping fleets in the Middle East and Asia regions.”

Al Seer Marine is already a leader in marine services in the region and has been expanding rapidly in the commercial shipping segment. Earlier in the year, Al Seer Marine launched its additive manufacturing business unit, leveraging the latest additive manufacturing technologies for the company’s in-house manufacturing of unmanned vessels and vehicles. The business unit will also develop large-scale additive manufacturing (LSAM) products and parts that are in high-demand regionally and globally.

About Al Seer Marine:

Al Seer Marine (ASM), founded in 2003, is listed on ADX and a leader in marine services with 1 billion paid-in capital and over 1,200 employees. For its Full Year 2021 financial results, the company reported a net profit of AED 2.5 billion, driven by a significant rise in income from investments and acquisitions in support of its diversification strategy in the commercial maritime industry and new management and production services. It has a portfolio of services, including: management and training, construction of vessels, high-tech boatbuilding, unmanned systems development, and manufacturing. These are spread across its assets, namely: ASM Boat Building Sole Proprietorship, ASM Training Institute, and ASM Services Company.

About International Holding Company:

IHC was founded in 1998, as part of an initiative to diversify and develop non-oil business sectors in the UAE, and has grown to become the most valuable listed holding company in the Middle East with a market cap of USD 140 billion. The company endeavours to implement sustainability, innovation, and economic diversification initiatives across what is now one of the region’s largest conglomerates. IHC is included in FTSE ADX 15 Index (FADX 15), which represents the top 15 largest and most liquid companies on the ADX.

IHC has a clear objective of enhancing its portfolio through acquisitions, strategic investments, and business combinations. Comprising more than 30 entities and 22,345 employees, IHC seeks to expand and diversify its holdings across a growing number of sectors, including Real Estate, Agriculture, Healthcare, Food and Beverage, Utilities, Industries, IT and Communications, Retail and Leisure, and Capital.

With a core strategy to enhance shareholder value and achieve growth, IHC drives operational synergies and maximizes cost efficiencies across all verticals – it also continues to evaluate investment opportunities through direct ownership and entering partnerships in the UAE and abroad. As the world changes, and new opportunities arise, IHC remains focused on resilience, innovation and redefining the marketplace for itself, its clients, and its partners.