Amwal AlKhaleej, which earlier this year sued Damas in a $22-million (Dh81 million) claim, is satisfied with the recently concluded out-of-court settlement, its top executive said.
Ammar AlKhudairy, managing director of the Saudi-based private equity firm said they were able to get their “money back” in a deal that was in line with the initial compensation sought by the firm.
Part of the settlement was the transfer of 20 million shares to Amwal AlKhaleej on August 19 at a price of 16 cents a share or a total value of $3.2 million and an increase in Amwal’s shareholding in the company to 13.26 per cent from 11.23 per cent after the transaction.
“That is only a part of a bigger settlement, which was done to our satisfaction,” AlKhudairy said, during the sidelines of the SuperReturn conference yesterday. He declined to comment on the wider settlement.
Emirates 24/7 in March reported that Amwal was asking the DIFC Court for Damas to send back the 22 million shares it sold to Damas or for the Abdullah brothers to pay the full sum of $22 million plus interest rates at the rate of 12 per cent plus damages. Damas contested the court’s jurisdiction but in April, the DIFC Court ruled in favour of Amwal.
AlKhudairy said the firm has learned from that experience as well as in dealings with other family businesses. “While family businesses are great partners especially during the 2005-2008 period, conflicts of interests between families and private equity funds have started to surface,” he said.
“Each relationship with a family business is different but what is important is to study the financial requirements and parameters of the investment and to ensure that you reflect in the shareholders agreement or in the purchase agreement the terms and conditions to allow you to influence and control the way cash is handled within the business,” he added.
AlKhudairy said the company is looking at doing a Saudi IPO by the end of this year and another IPO in Egypt in the first quarter of next year. The companies were initially intended to be IPO’d in the last quarter of last year and first quarter this year. He projects the IPO pipeline in Saudi will double by next year from the current level. Citing figures from Zawya, he said, the number of IPOs in the GCC (excluding Saudi insurance listings) have dropped from 23 in 2007 to five in 2009 and five year to date.
AlKhudairy said the company is looking at acquisition opportunities and is “likely to go to market within the next few months.”
Despite talks of distressed assets sales, he said, there has actually been no distressed sales opportunity.
“There were a few things that came up in the market but they were abused asset and not distressed so they did not make sense. In 2008 till 2010, we are waiting for great opportunity in distressed assets but that did not materialise,” he added.