(MENAFN - Arab News) The national shipping company of saudi arabia (bahri) the saudi flag carrier shipping line is finalizing its merger deal with vela's fleet and operations. vela is a subsidiary of the world's largest producer and exporter of oil saudi arabian oil company (aramco).
the two national companies signed a landmark merger agreement in 2012 to make the joint fleet the fourth largest company in the world in terms of ownership of 77 giant ships vlccs industry.
at a press conference bahri ceo saleh al-jasser said after completion of the merger deal estimated to be worth sr12 billion they will have the biggest fleet in the kingdom.
'we will have a long-term accord with sr5 billion. we are going to pay them part of it in the form of shares and the balance in cash (sr3200 million)" he added.
he said the deal includes shifting the whole fleet of vela consisting of 14 vlccs used for floating storage 5 refined petroleum product tankers all crew of vela's carriers employees and part of its business systems so that they can be integrated within bahri's structure.
'this process is the result of a long-term vision and the hard work and commitment of all parties in addition to our leadership and image in the industry" al-jasser said describing it as valuable contribution to the national economy.
he added: "the deal by itself can be a real example of cooperation between national companies in the kingdom. bahri will become the exclusive maritime carrier of crude oil sold by saudi aramco on the basis of delivery to the client by vllcs."
'bahri is one of the biggest shipping companies in the world and biggest fleet-owner (17 vllcs) in the middle east. it occupies a preeminent position among its industry peers at national regional and international levels in all sectors of its business" al-jasser noted.
"we also own the fleet of 24 tankers the fourth in the world in terms of chemical shipments under the national chemical carries (ncc) with saudi basic industries corporation (sabic) partnership" he added.
on general cargo (gc) the official disclosed that sr1500 million has been invested in the company which operates six gc vessels covering north america the middle east the mediterranean and india.
the partnership of this size gives the two national companies a greater ability to compete in the world markets for maritime transport and to achieve further reduction in operating and maintenance expenses. he said that the vela was able to increase the saudi employees on board to 20 percent of their work force.
they will work under a long-term shipping contract according to the agreed terms and conditions. bahri enjoys protection when freight rates fall below the minimum agreed limit. should freight rates increase above a certain agreed limit (the compensation limit) bahri in turn will compensate saudi aramco for the amounts that might have already been paid to bahri when freight rates were below the minimum.