Saudi Arabia’s Bahri is targeting acquisitions in Asia and the Middle East as the exclusive oil shipper for state energy giant Saudi Aramco seeks to expand its reach, the chief executive said on Wednesday.
Bahri is the world’s largest owner and operator of very large crude carriers (VLCCs). Saudi sovereign wealth fund the Public Investment Fund (PIF) owns 22 percent of the company and Aramco has a 20 percent stake.
“We are looking at multiple acquisitions in the Middle East and Asia worth tens of millions of dollars,” Bahri CEO Abdullah Aldubaikhi told Reuters.
“We want to tap into a new area related to the maritime sector by acquiring companies offering services that are not currently available within Bahri’s portfolio,” he said, without specifying what services would be added.
The company aimed to buy a listed firm in Asia in a deal that would probably be completed in the third quarter of 2019, he said, without elaborating.
Bahri transports Saudi Aramco’s VLCC cargoes on a cost, insurance and freight (CIF) basis, making it the world’s busiest oil shipper.
It transports crude oil, chemicals and dry bulk. It also offers ship management services. In 2014 it merged with the former shipping arm of Aramco, Vela Marine International.
Acquisitions in the pipeline will be financed from the company’s own funds and banking finance, Aldubaikhi said.
The company, which has 45 VLCCs, plans to add 15 more to its fleet through a $1.5 billion investment fund it launched in 2017 with Arab Petroleum Investments Corp (APICORP).
The APICORP Bahri Oil Shipping Fund (ABOSF) will raise $1.5 billion in three stages raising $500 million each time. APICORP will contribute 85 percent of the funds and Bahri the rest.
The first $500 million phase would be raised in the first quarter of 2019 and the second tranche would probably be completed in the second quarter of 2020, Aldubaikhi said.
Bahri reported a 34.4 percent increase in third quarter net profit to 81.3 million riyals ($22.7 million) after zakat and tax, versus 60.5 million riyals a year earlier.
“We are expanding and growing, and although the shipping industry is cyclical, I think it has bottomed out in 2018,” Aldubaikhi said. “The cycle of the shipping industry in 2019 will improve, and the years 2020 and 2021 will be the golden years for this industry.”