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Arabtec eyes Azerbaijan property deal: report

Arabtec is working on a $2.7bn contract in Russia. (EB FILE)

By Reuters

Dubai contractor Arabtec Holding is bidding for a major property development in Azerbaijan, the Meed magazine reported.

Arabtec, which earlier yesterday said its board had agreed to raise its stake in UAE-based House of Equipment, is expected to release its full-year results today.

Arabtec was vying for the deal to build the Crescent — a complex of five high-rise residential and commercial towers and a 360-room five-star hotel on the shores of the Caspian Sea.

Meed did not give the source of the information.

The move into Azerbaijan represents Arabtec's latest foray into the former Soviet states. It is working on a $2.7 billion contract to build a 400-metre tower for Russia's Gazprom Neft, the world's biggest gas producer.

The largest UAE contractor by market value posted a 35 per cent fall in net profit for the third quarter. It made Dh511.7m in the first nine months of 2009.

Analysts polled by Reuters have on average forecast a Q4 result of Dh172.4m, down 6.7 per cent from Dh184.8m on the year earlier period.

The firm's full-year profit for 2008 was Dh945m.

"We forecast full year 2009 revenue of Dh8.2bn and profit (pre-writedowns) of Dh779m," said Ian Munro, MAC Capital head of research. "There is potential for auditors to request that Arabtec takes receivable writedowns of Dh100m to Dh200m, which may affect the underlying quality of the result," he said.

Arabtec will more than double its stake in House of Equipment, which sells, manages, rents and services construction equipment, to 66.7 per cent.

Arabtec this week extended the due diligence to sell a 70 per cent stake to Abu Dhabi's Aabar Investments to April 16.


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