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Dubai / Reuters
National Shipping Company of Saudi Arabia (Bahri) has announced on Sunday it had signed a murabaha facility with Riyad Bank valued at whopping 1.425 billion riyals ($380 million). This facility is aimed at financing the construction cost of five very large crude carriers (VLCCs).
According to the concerned authorities, the facility lasts for a period of 10 years and six months, and includes a maximum two-year grace period, the firm known as Bahri said in the bourse statement.
Riyad Bank is one of the largest financial institutions in Saudi Arabia, ranked third in assets. It was established in 1957 and the Saudi government owns 51 percent of the shares of the firm. The company is regulated by the Saudi Arabian Monetary
Association.
A murabaha is a cost-plus-profit arrangement which complies with Islamic finance standards.
The exclusive oil-shipper for Saudi Aramco last year signed a deal to buy five very large crude tankers from ship builders Hyundai Heavy Industries.
Bahri was formed by a Royal Decree in the year 1978 as a Public Company, 22 percent ownership held by the Public Investment Fund (PIF) of the Saudi Government, 20 percent by Saudi Aramco Development Company and the remaining is widely held in public shares by Saudi Nationals.