Gulf Navigation has dismissed an attempt by a group of shareholders to increase the company’s authorised capital to Dh5 billion during the company’s general assembly meeting on Wednesday.
The Dubai shipping company said on Thursday that a group of shareholders representing 30.39 per cent of the company’s share capital requested a special resolution to increase the company’s authorised capital – the upper ceiling of share capital a company can issue to shareholders – to Dh5bn from the current level of Dh551.7 million.
However the company did not approve the resolution, highlighting that to do so would be in contravention of Federal law. Article 193 of the new UAE Companies Law, introduced last year, stipulates that a company is allowed to set an authorised capital limit that may not exceed double the value of its issued capital.
Gulf Navigation’s authorised share capital has instead been set at Dh1bn.
Company shareholders also approved resolutions to amend Gulf Navigation’s articles of association as per the requirements of the Companies Law, and that its activities be “in accordance with Islamic Sharia”.
The company reduced its issued share capital to Dh551.7m from Dh1.66bn in January 2014, as a means of writing off its accumulated losses.
In spite of a growth in revenue and profits during the first quarter, Gulf Navigation had net current liabilities of Dh604m at the end of March and accumulated losses of Dh235.9m, and remains in default on a number of loan facilities.
The company plans to pay some US$35m of outstanding debt this year, according to the group chief executive Khamis Juma Buamim.
Gulf Navigation shares, among the best performing on Dubai’s index this year, opened around 0.9 per cent lower on Thursday.
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