ADIB marks its 1st Sharia-based financing of $135mn to build 2 VLGCs

By Arya M Nair, Official Reporter
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Abu Dhabi Islamic Bank (ADIB), a leading financial institution, has arranged and structured a Sharia-compliant transaction of $135 million for ABGC DMCC, a joint venture between Al Seer Marine and BGN, for the construction of two Very Large Gas Carriers (VLGCs).

The deal marks ABGC’s first Sharia-based financing using an ‘Istisna-Ijarah’ structure, as well as ADIB’s ongoing commitment to and ability to fund significant assets in the marine and energy sectors.

ADIB acted as the Mandated Lead Arranger and Bookrunner on the deal, with the Commercial Bank of Dubai (CBD) and National Bank of Fujairah (NBF). The vessels will be constructed by Hyundai Heavy Industries for ABGC DMCC.

The first vessel, Lucky Gas, will be completed in March 2022, followed by the second vessel in May 2022. The vessels will be dual-fuel efficient, with Liquefied Petroleum Gas (LPG) engines providing operational, economic, and environmental benefits.

Gunther Alvarado
Gunther Alvarado
COO – Al Seer Marine

“We are delighted to work together with ADIB and collaborate on achieving the completion of this financing. We are aiming to increase our fleet by acquiring a further 15 ships this year and having demonstrated consistent success in executing on attractive opportunities, we will seek out the right structure and financing to ensure the best equity returns for our shareholders, all the while managing the associated risk.”

LPG engine technology is a step towards zero-carbon propulsion of vessels and the shipping industry achieving its ambitious greenhouse gas emission reduction goals.

This is another landmark financing for the shipping industry arranged by ADIB demonstrating the Bank’s expertise and ability to finance significant assets in the marine and energy sectors.

ADIB has a long track record of delivering several award-winning transactions for high-profile Corporate and Institutional customers from across the region. In 2021, ADIB concluded a number of high-profile transactions across structured and syndicated finance, Sukuk, M&A and advisory products.

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