Ex-Arabtec CEO plans sale of remaining stake

The former chief executive of Dubai-listed construction firm Arabtec Holding plans to sell his remaining stake in the company, a source with knowledge of the matter told Reuters on Wednesday.

However, Hasan Ismaik will only offload the shares, representing 11.8 per cent of the company and worth around $540 million at current market prices, if he is paid at least the price he received when he sold a stake of about 16 per cent to Abu Dhabi's Aabar Investments earlier this month, the source added.

That price, of Dh5 per share, is a significant premium to where the stock currently trades. Arabtec shares closed at Dh3.74 on Wednesday and have not closed at or above Dh5 since June 12.

"Ismaik will not sell the shares in the market which is still weak. But if he gets an offer at a good price, he will sell," the source said, declining to be named due to the sensitivity of the issue.

Asked if Dh5 per share was a good price, the source said "that is the minimum".

Ismaik did not respond to calls seeking comment. An Aabar spokesman declined comment when asked if the company would consider buying Ismaik's remaining stake in Arabtec.

A stock market announcement on November 11 said Aabar had become Arabtec's largest shareholder after hiking its stake to 34.93 per cent through the purchase of shares from Ismaik.

The move helped end some of the uncertainty around the company's ownership, prompted by the sudden resignation of Ismaik in June amid talk of a fall-out between the former chief executive and state-owned Aabar, which had been using its influence to secure the contractor a number of major projects.

This included a $40 billion contract with the Egyptian government to build 1 million homes in the North African country.

Aabar is owned by Abu Dhabi state investment fund International Petroleum Investment Co.

Arabtec board changes slows Egypt project talks

Negotiations to implement a $40 billion scheme for one million new homes in Egypt have been slowed by board changes at the Dubai-based contractor Arabtec Holding, Egypt's housing minister said on Thursday.

But Mostafa Madbouly said he believed that would only have a minor impact on the project's delivery, seen as vital in easing the country's housing shortage in a state that has experienced major political and economic upheaval in recent years.

"The process slowed down a bit with the changes in the board but now we have a new board and are starting active negotiations with Arabtec," the minister told an investment event in Abu Dhabi.

"I think what happened with Arabtec will only delay things one month or two but it won't be a big delay," he told  reporters at the event, noting the original timetable had been to conclude talks by the end of November.

In October, Arabtec said it planned to launch the first phase of the huge housing project by the end of the year.

Arabtec had previously said the first homes in the project backed by both the Egyptian and UAE governments would be delivered in early 2017, with the whole project to be completed by 2020.

Arabtec endured a period of turmoil in mid-2014 as the sudden resignation of Hasan Ismaik in June undermined the growth prospects of the company.

This came amid talk of a fall-out between the former chief executive and state-owned Aabar Investments, which had been using its influence to secure the contractor a number of major projects.

Madbouly said his housing ministry had started to discuss the price of the units in the scheme and the final feasibility study would be presented to it in the next couple of weeks.

"As soon as we reach an agreement with Arabtec and have the approval of cabinet, we will make this a model for future public private partnerships," Madbouly added.  

 

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