Mubadala posts Dh4.2bn loss

Investment vehicle hit by hit by volatile markets; says 2012 investments to be "slightly lower"

Mubadala, the Abu Dhabi government's investment vehicle, expects its investment outlay in 2012 to be slightly lower than last year's after saying its overall annual loss surged due to volatile global markets.

The state-owned fund, which has stakes in General Electric and private equity firm Carlyle, made an overall loss of Dh4.2 billion ($1.14 billion) in 2011, compared with a loss of 338 million dirhams in 2010, it said in a statement.

Mubadala, which set a capital and investment expenditure of $16.3 billion for 2011, said that amount is expected to be lower in the current year.

"It is likely to be slightly less this year. It is still a significant amount," Chief Financial Officer, Carlos Obeid said in a conference call, without specifying a figure.

Cash contribution from the government more than doubled to Dh28 billion ($7.62 billion) from Dh13 billion a year-ago, Mubadala's detailed financial statements showed.

Mubadala, which recently bought a $2 billion stake in Brazilian conglomerate EBX Group, incurred a loss of Dh3.03 billion from its financial investments compared with a profit of 355 million dirhams a year earlier, the company's financial statements showed.

"While our financial investments' performance was impacted by the volatility in the global market place during 2011, we continue to maintain a long-term financial investment perspective," Khaldoon al Mubarak, chief executive and managing director said in the statement.

Unlisted Mubadala saw its 2011 revenues surge 77 per cent to Dh27.9 billion due to high energy prices last year and consolidation of its semi-conductor unit Advanced Technology Investment Company (ATIC). This compared with revenues of Dh15.8 billion in 2010.

Total assets also grew 73 per cent to Dh177 billion ($48.19 billion) in 2011, Mubadala said.

ALDAR STAKE CUT

Mubadala, one of few state-controlled vehicles to publish results, also owns stakes in local companies including indebted developer Aldar Properties and cooling firm Tabreed which it helped recapitalise last year.

The fund, which holds a near-majority position in indebted Aldar, plans to transfer a 14 per cent stake in the developer to secure a Dh500 million loan facility from Abu Dhabi Commercial Bank.

After the stake transfer, Mubadala holds about 35 per cent of Aldar's shares, Obeid said in the call.

Last month, Mubadala said it would buy a $2 billion stake in Brazil's EBX Group, providing fresh capital to the Brazilian conglomerate of billionaire Eike Batista.

"Mubadala will continue to assess geographical opportunities and multiple sectors, we are looking at other geographies and positions news to Mubadala," Waleed al Muhairy, chief operating officer said on the call.

Mubadala also remains a supportive shareholder of Carlyle Group, viewing the upcoming IPO as a "positive step" and taking a long-term perspective of its investment in the private equity firm, he said.

Carlyle Group is eyeing a market valuation of $7.5 billion to $8 billion in an initial public offering, a source with knowledge of the situation told Reuters on Tuesday.

Mubadala initially bought a 7.5 per cent stake in Carlyle for $1.35 billion at the top of the cycle four years ago, valuing the private equity firm at $18 billion.

The 10-year old firm's total outstanding debt as of January this year is Dh38 billion with Dh5 billion due in the short-term, said Obeid, adding Mubadala has ample cash to cover it.

Still, Mubadala is engaging with banks, export credit agencies and the capital markets to secure the best funding to finance its projects, he added.

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