PROSPECTUS The National Shipping Company of Saudi Arabia A Saudi Joint Stock Company with Commercial Registration No. 1010026026 dated 01/12/1399H (corresponding to 22/10/1979G) Relating to the proposed merger of the fleets and operations of The National Shipping Company of Saudi Arabia and Vela International Marine Limited. The National Shipping Company of Saudi Arabia ("Bahri" or the "Company") was established by Royal Decree No. M/5 dated 12/02/1398H (corresponding to 22/01/1978G) as a Joint Stock Company in Saudi Arabia with commercial registration number 1010026026 dated 01/12/1399H (corresponding to 22/10/1979G) and an initial share capital of SAR 500,000,000, consisting of 5,000,000 shares with a nominal value of SAR 100 per share. On 10/08/1402H (corresponding to 02/06/1982G), the share capital of the Company was increased to SAR 2,000,000,000, consisting of 20,000,000 shares with a nominal value of SAR 100 per share. On 29/01/1419H (corresponding to 25/05/1998G), the share capital of the Company was divided into 40,000,000 shares with the value of SAR 50 per share. Pursuant to Resolution No. 40 of the Council of Ministers dated 27/02/1427H (corresponding to 27/03/2006G), the nominal value per share was reduced from SAR 50 per share to SAR 10 per share and accordingly the number of shares in the Company increased from 40,000,000 shares with the value of SAR 50 per share to 200,000,000 shares with the value of SAR 10 per share. On 12/03/1427H (corresponding to 10/04/2006G), the share capital of the Company was increased through the capitalisa- tion of retained earnings to SAR 2,250,000,000, consisting of 225,000,000 shares with a nominal value of SAR 10 per share. Last, on 04/11/1427H (corresponding to 25/11/2006G), the share capital of the Company was increased through a rights issue to SAR 3,150,000,000, consisting of 315,000,000 Shares with a nominal value of SAR 10 per share. As at the date of this prospectus (the "Prospectus"), the share capital of the Company is SAR 3,150,000,000 consisting of 315,000,000 shares with a nominal value of SAR 10 each (each a "Share" and collectively, the "Shares"), all of which are fully paid. The Company and Vela International Marine Limited ("Vela"), a wholly-owned subsidiary of the Saudi Arabian Oil Company ("Saudi Aramco"), entered into a business and asset purchase agreement dated 19/12/1433H (corresponding to 4/11/2012G) as amended ( the "BAPA") relating to the merger of Vela's entire fleet of vessels (comprising 14 double-hull very large crude carriers (or VLCC), a single-hull floating storage VLCC, one Aframax tanker and four product tankers (together, the "Vela Vessels"), along with certain assets relating to such Vela Vessels including vessel IT systems, historical equipment and maintenance data and certain books and records (together with the Vela Vessels, the "Target Assets") and operations related to these vessels with the Company, as well as the entry by the Company into a contract of affreightment (the "Contract of Affreightment") and a time charter agreement (the "Time Charter Agreement", together with the Contract of Affreight- ment, the "Shipping Agreements") with certain subsidiaries of Saudi Aramco (together with Saudi Aramco, the "Saudi Aramco Group") (the "Transaction"). Under the terms of the Transaction, the Company will have exclusivity in relation to the carriage of all VLCC-sized Crude Oil cargoes sold on a Delivered Basis by members of the Saudi Aramco Group which are shipped from certain locations that Saudi Aramco uses to ship Crude Oil in accordance with the terms of the Contract of Affreight- ment. The Contract of Affreightment is a long-term arrangement with Bolanter Corporation N.V. ("Bolanter"), a wholly-owned subsidiary of Saudi Aramco. As such, the Contract of Affreightment has an initial term of 10 years, terminable by either party giving not less than five years' notice at any time after the fifth anniversary of the agreement becoming effective (which will be the date that the first Vela VLCC is delivered to the Company pursuant to the BAPA). Under the terms of the Time Charter Agreement, Saudi Aramco Products Trading Company ("SAPTC"), a wholly-owned subsidiary of Saudi Aramco, will hire the four product tankers, the Aframax tanker and the floating storage VLCC (forming part of the Target Assets) from the Company for a minimum period of five years (or, in the case of the floating storage VLCC, until 31 December 2016 as further explained in Section 12.1.2.3 "Summary of the principal terms of the Time-Charter Agreement"). In addition, Vela's vessel-based personnel and a number of shore-based personnel will transfer to the Company or its subsidiaries. Under the terms of the Transaction, the Company will pay a total consideration of an amount equal to SAR 4,875,000,000 (equivalent to US$1,300,000,000) to Vela. This will be satisfied by the Company (i) issuing 78,750,000 new Shares to be adjusted, in certain circumstances, to ensure that such shares represent 20 per cent. of the issued share capital of the Company on a fully diluted basis, as further explained in Section 1.2 "The Transaction" (the "Adjustment") (the "Consideration Shares") at an agreed price of SAR 22.25 per new Share to Saudi Aramco Development Company ("SADC"), a wholly-owned subsidiary of Saudi Aramco, with an aggregate value equal to SAR 1,752,187,500 (equiva- lent to US$467,250,000) and (ii) making a cash payment to Vela of an amount equal to SAR 3,122,812,500 (equivalent to US$832,750,000) (the "Cash Considera- tion"). Following approval from the Capital Market Authority of Saudi Arabia (the "CMA" or the "Authority") in relation to the publication of this Prospectus and the receipt of the relevant approvals from the Ministry of Commerce and Industry (the "MOCI"), the Company will hold an extraordinary general assembly meeting ("Transaction EGM") to approve, amongst other things, (i) an increase in the Company's share capital from SAR 3,150,000,000 to SAR 3,937,500,000 subject to the Adjustment through the issuance of the Consideration Shares (the "Capital Increase"); (ii) the Transaction; and (iii) certain amendments to the Company's By-Laws. Following careful and thorough consideration of the terms of the Transaction and the Transaction EGM Resolution, the Board of Directors by meeting number 7/12, held on 29/11/1433H (corresponding to 15/10/2012G) unanimously authorised the Chairman and CEO of the Company to finalise and approve the Transaction and sign all documents relating to the Transaction. Based on this authorisation from the Board, the Chairman and CEO signed the Transaction Agreements on 19/12/1433H (corresponding to 4/11/2012G). All the members of the Board believe that the Transaction is in the best interests of the Company and the shareholders of the Company (the "Shareholders") as a whole and should contribute to the Company's future success by improving the commercial and financial position of the Company and fulfilling its strategy of growth with the potential of long-term value creation for the Shareholders. Accordingly, the Board unanimously recommends that all Shareholders vote in favour of the Transaction EGM Resolution to be proposed at the Transaction EGM to approve the Transaction (which are described further in Section 1.15 "Extraordinary General Meeting"). The Company has one class of shares. Each holder of Shares (a "Shareholder") with at least 10 Shares has the right to attend and vote at a general assembly (the "General Assembly"). No Shareholder benefits from any preferential voting rights. An application has been made to the CMA for the admission of the Consideration Shares to the Official List, all supporting documents required by the CMA have been supplied and, subject to the Transaction EGM Resolution being passed at the Transaction EGM, all relevant approvals pertaining to this Prospectus and the Transac- tion, including the approval of the Supreme Council for Petroleum and Mineral Affairs of Saudi Arabia (the "SCPMA"), have been granted. The "Important Notice" and Section 2 "Risk Factors" should be considered carefully prior to making a decision whether to vote in favour of or against the Transaction EGM Resolution. THIS PROSPECTUS IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in doubt as to the contents of this Prospectus or the action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker or other appropriate independent financial advisor duly authorised by the CMA. Financial Advisor J.P.Morgan This Prospectus includes information given in compliance with the Listing Rules of the Authority. The Directors, whose names appear on page v, collectively and individually accept full responsibility for the accuracy of the information contained in this Prospectus and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading. The Authority and the Saudi Stock Exchange do not take any responsibility for the contents of this Prospectus, do not make any representation as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this Prospectus. This Prospectus is an English Translation of the Official Arabic Language Prospectus. In case of any differences between the two, the Arabic version shall prevail.