The National Shipping Company of Saudi Arabia
Annual Report 2008
Notes To The Consolidated Financial Statements For the year ended December 31, 2008 (InThousands Saudi Riyals)
Murabaha Financing and LongTerm Loans
The Company and Subsidiaries obtained long-term loans from local and international banks to finance the purchasing and building
of carriers & others. The balance of these loans as at December 31 comprises the following:
1.864.714 2.070.589 3.935.303 )225.362( 3.709.941
1.234.328 1.199.812 2.434.140 )204.849( 2.229.291
Loans to the Company Loans to the subsidiaries
Current portion of long-term loans
Islamic Murabaha financing agreement with Samba Financial Group of SR 1.5 billion (USD 392 million) for financing ten new carriers under construction. Islamic Murabaha financing agreement with Riyad Bank of SR 937.5 million (USD 250 million) for financing six new carriers under construction. The loans balance includes a Murabaha financing agreement amounting to SR 23.3 million granted by Mideast Ship Management Company Ltd. for acquiring new office in Dubai. Total financing charges on loans amounted to SR 163.64 million for the year 2008 (2007: SR 155 million), out of which SR 90.41million related to the subsidiary (NCC) loans (2007: SR 44.96 million) and SR 1.4 million related to the subsidiary Mideast Ship Management Ltd. loans (2007: Nil). Financing charges related to financing of VLCCs, petrochemical carriers and new office apartment loans for a sum of SR 58 million (2007: SR27million) was capitalized, see (Note 11).
The Company’s loans include the Murabaha financing of VLCCs (Wafrah and Layla) amounting to SR 570 million (USD 151.92 million) as of December 31, 2008, out of the total financing that amounting to SR 633 million (USD 168.8 million). Also included Murabaha financing for 6 NewVLCCs of SR 789.5 million (USD 210.5 million). Out of 6VLCCs, 2 VLCCs (Jana & Habari) have been recieved in 2008. These loans will be paid in installments after the date of receiving the carriers and vessels. The cost of financing is calculated as per the respective financing agreements. The loan agreements contain covenants related to liquidity, indebtedness and other conditions. Moreover, the financed carriers and vessels are mortgaged in favor of the lending banks. The Company’s loans include the loans granted to the subsidiary (NCC) during the year 2007 for financing building of new petrochemical carriers as follows: Islamic Murabaha agreement with Riyad Bank for SR 787.5 million (USD 210 million) for refinancing of all loans. Financing agreement with Public Investment Fund of SR 435.8 million (USD 116.2 million) for financing four carriers under construction out of which two carriers were received during 2007.
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