Qatar crisis delays sale of Gulf shipping firm

LONDON/DUBAI: Qatar’s diplomatic crisis is holding up the sale of a shipping company it part owns, one of the latest signs of an emerging corporate fall-out that Doha is facing after Arab countries cut relations in June, sources familiar with the matter said.

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic, trade and transport ties with Qatar in June, accusing it of supporting terrorism - a charge Doha denies.

The dispute has hit Qatar’s financial sector, with banks in neighboring Arab states withdrawing billions of dollars from Qatari lenders. Now there are signs that deal-making in the region is also running into difficulties. Qatar was the biggest shareholder in Gulf container line United Arab Shipping Company (UASC), followed by Saudi Arabia. UASC merged with Germany’s Hapag Lloyd in May, to create the world’s fifth biggest container group.

Dubai-based United Arab Chemical Carriers (UACC) - in which UASC held the biggest stake - was to be sold as part of the terms of the merger. But four finance sources say the cut in trade ties between Qatar and Saudi Arabia is holding up the sale of UACC, which is estimated to have a company valuation of $200 million. For Qatar, the sale of UACC is the responsibility of the Qatar Investment Authority (QIA). But for any sale to go ahead, the UACC board would need to discuss the matter together with Saudi partners, and that is not happening, the sources said.

“The sale of UACC is now in the hands of QIA,” one source said. “There is no indication of any movement towards a sale as there is no dialogue between the Qataris and the Saudis.”

Another source added: “Until the sale is done, UACC cannot start on any new projects or buy any new ships. At the moment, everything is on hold and the focus (for UACC) is on cost savings.” —Reuters