GBCorp to inject cash into oil and gas companies
The new company, Global Energy Financial Services Company (Gefsco), will be advised by international energy financial advisory firm Taylor-DeJhong and will be looking for investment opportunities in oilfield services, exploration and production, natural gas processing, refining, petrochemicals and power generation.
Mark Hanson, CEO of GBCorp, said the energy subsidiary will be the first step in building a comprehensive portfolio of Shariah-compliant services specific to the energy industry.
"In the next three to four years, we would like to be a dominant global Islamic investment bank. And currently, we see the energy sector as among the most promising ones," Hanson told Emirates Business.
He declined to say how much investment they would be earmarking. Ajmed Al Khan, Investment banking head at GBCorp, said the deals they would be undertaking could range from $20 million (Dh73.4bn) "up to a few hundred million dollar".
"We have no capital restraints as regards to the deals we will undertake," Terry Newendorp, Chairman and CEO of Taylor-DeJhong, said. He added that with the continuous rise in energy demand, the profitability on energy deals is guaranteed.
"I have been in the oil and gas business for the past 35 years. I have seen the up and down cycle but I have seen profits even when oil was priced at $40," he said.
GBCorp began operations in June last year with an issued capital of $250m and an authorised capital of $500 m. A source close to the company said GBCorp, fuelled by the liquidity of its wealthy GCC investors, has the "enormous" ability to raise the money for any deal it plans to invest in.
"The energy sector is a multi-billion dollar business and there are many opportunities especially in service sector, such as privately-held companies in Dubai, which do not have the capital to expand internationally," Newendorp said.
"There are also plenty of opportunities in the equipment and supply sector," he said, but added investment in the upstream and power sectors are better sourced out outside the GCC.
He said: "We would not be able to do upstream deals in Saudi Arabia or Abu Dhabi but there are plenty of opportunities outside the region. Power sector is also less likely to be our target, there is not much opportunity in there. The Sub-Saharan Africa region, however, offers good opportunities in these sectors."