Vela and Bahri Plan Merger to Create Kingdom Maritime Hub
Dear Colleagues,
I am pleased to announce that our wholly owned subsidiary, Vela International Marine Limited, has entered into a nonbinding memorandum of understanding (MOU) with Bahri (the National Shipping Company of Saudi Arabia) to merge the fleets and operations of both companies.
Earlier today, we hosted a ceremony at Saudi Aramco at which Bahri Chairman Mr. Abdullah Al-Rubaian and I signed an agreement to pursue a merger of ships, personnel and business systems along with management responsibility. Vela will continue as a company responsible for oversight of operations of the combined entity.
The merged entity will become the fourth-largest owner of Very Large Crude Carriers (VLCCs) in the world, and will have 77 vessels in the combined fleet of VLCCs, product and dry-bulk tankers. It will help Saudi Aramco meet the transport needs for our expanding downstream businesses, and it will help Bahri create long-term value for its shareholders. Everyone benefits, from customers who will have access to a larger fleet that meets the highest standards, to the employees who will have tremendous opportunities in a growing organization with growing ambitions.
Some of you may ask how the proposed merger would benefit Saudi Aramco in the long term.
The merger will create a national champion that will promote the development of a thriving national maritime industry, and it is entirely consistent with the company’s Accelerated Transformation Program and the 2020 Strategic Intent because it expands both Saudi Aramco’s and the Kingdom’s ability to meet future transport needs while preserving reliability and efficiency for existing customers.
As we expand our downstream presence in-Kingdom and globally, there’s a need for greater scale and reach across our businesses and operations to support our integration efforts. Saudi Aramco will continue to manage all crude oil marketing and sales directly with its customers, and Bahri will provide reliable transportation services to Saudi Aramco on commercial terms.
I am optimistic for the future of the merged company and the benefits it will bring to our company, our employees, our customers and our country. I hope you will join me in congratulating our colleagues who have worked tirelessly to reach this milestone.
With kind regards,
Khalid G. Al-Buainain,
Senior Vice President, Downstream
http://announcements.aramco.com.sa/
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