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July 21, 2016

King & Spalding Advises Bahri on US$1.5 Billion Shipping Fund Agreement

RIYADH, July 21, 2016 — King & Spalding advised the National Shipping Company of Saudi Arabia (Bahri), the second largest oil shipping firm in the world, on its framework agreement with the Arab Petroleum Investments Corporation (APICORP) to establish an investment fund to acquire very large crude carriers (VLCCs).

Bahri and APICORP announced their intention to establish up to three investment funds, with a total investment of up to US$1.5 billion (US$500 million each). The funds will be used to acquire approximately 15 VLCCs, with each fund owning approximately five vessels.

Bahri will own 15 percent of the interests in the funds and APICORP will own 85 percent. APICORP will be the loan arranger and will control the fund manager while Bahri will be appointed as technical and commercial manager of the fleet of VLCCs owned by the funds.

The VLCCs to be acquired by the funds will enable Bahri to expand its participation in the global crude shipping industry, in furtherance of the Kingdom of Saudi Arabia’s long-term economic plans.

The King & Spalding team on the matter was led by Dubai- and Riyadh-based senior associate Osama Audi. Dubai- and Riyadh-based partners James Stull and Nabil Issa advised on the fund aspects of the transaction, and Houston-based partner Archie Fallon advised on the oil & gas shipping aspects.

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