Abu Dhabi-listed Waha Capital, which has recently bought 50 per cent of AerVenture, a unit of AerCap Holdings, is looking at closing more investment deals in the next six months.

These deals, says Waha Capital CEO Salem Rashid Al Noaimi, need not necessarily be confined in the form of acquisitions. "We want to grow through either acquisitions or aggressive organic growth or creating joint ventures," Al Noaimi said.

"For example in Waha Land, we started by doing things by ourselves. Down the line, we will be looking for possible joint venture partners to get involved in it. In Waha Leasing, we are doing it differently – we were growing organically and then we had the opportunity of doing a joint venture. We were actually looking at some acquisitions but the joint venture opportunity came up and we took it. So it depends which sector we are talking about."

Albeit still young, the investment and leasing company has already beefed up its portfolio thanks to the emirate of Abu Dhabi's stable liquidity. Last year, it had bought 49 per cent of Dubai-based Gmmos, a Dubai-based company, which provides maritime services for the oil and gas sector, ship repair and crane leasing in the Gulf and Caspian area.

It had also established Dunia, a financial services company that targets SMEs and individuals. In the area of leasing, it acquired several aircrafts at a time when several companies in the aviation sector have postponed their investment decisions. In June this year, it bought AerVenture, which has $2.4 billion (Dh8.8bn) in assets that include 22 A320s and firm orders for another 32.

And it does not stop there, as the pipeline of investments remains active. In fact, the Dh20bn investment budget for the 2009 to 2011 period can now be a "conservative" estimate, says Al Noaimi.

"In this market, we are opportunistic investors… we have the general funding strategy so we are very much focusing on achieving the targets we said we will achieve," he added.

Waha Capital was created by restructuring Oasis International Leasing Company in February 2008. Its current business portfolio includes big-ticket leasing, financial services, maritime and property development. Waha Capital's main institutional shareholders are Mubadala Development Company and Abu Dhabi Investment Company.


Al Waha Capital seems to be very aggressive at a time when everyone in the business circle is very bearish. Does that signify that Abu Dhabi is still very much liquid and has even deeper pockets than was initially surmised?

It signifies that Abu Dhabi is very much liquid and it signifies that we in Waha Capital are strategic investors. I wouldn't say we are aggressive. I would say Waha Capital is capable of clearly taking advantage of the current economic environment. We are keen on becoming a major player in the aviation leasing business and the other three sectors, where we are involved in – real estate development, financial services and maritime sector. So clearly we are still going with the strategy that we have put in place, with opportunities such as the transaction with AerVenture is something that we have touched this time and this is something that we will touch upon in the future hopefully.

Last year Waha Capital announced it would invest Dh20bn in three years. How much has already been invested?

The announcement was made in February last year and now it's approximately one year after the announcement… approximately $400 million-$500m has been invested since then.

And how much will be invested by the end of this year?

In this market, we are opportunistic investors because the market is one where there are too many variables. It would be a bit pre-mature for me to say how much do we intend to invest in the next six months. But we are still on target to be large players in the sectors and fields that we are involved in. We have the support, we have the strategy, we have the general funding strategy as well so we are very much focusing on achieving the targets we said we will achieve.

In April, the former CEO of Waha Capital said the company may announce acquisitions worth $500m to $1bn this year and might have to borrow to finance its purchases. Any update on this plan? Can you say what company or which sector are you looking at?

We have an acquisition plan. When we want to go as Waha Capital, we want to proceed either through acquisitions or aggressive organic growth or creating joint ventures. We're looking at all three of them.

Of these three strategies, where is the company putting more priority on?

All three of them equally. It depends on which area are we focusing on. For example in Waha Land, we started by doing things by ourselves. Down the line, we will be looking for possible joint venture partners to get involved in it. In Waha Leasing, we are doing it differently; we were doing it organically and then we had the opportunity of doing a joint venture. We were actually looking at some acquisitions but the joint venture opportunity came up and we took it. So it depends which sector we are talking about.

Are you looking at closing another or some more deals within this year?

We have a couple in the pipeline but you see… deals are deals. Deals can always be cancelled in the last moment. But we believe that we will be closing a couple of deals before the end of the year.

Is the plan to make Dh20bn in investments by 2011 a strict timeline that you have to follow?

Over the next three years we will be involved in many different types of investments. Recently we announced the Dh11bn funding for the UAE Armed Forces… that's a whole thing by itself, so definitely the Dh20bn assumption over the next three years is a bit conservative nowadays.

With so many distressed assets all over the world, there might be quite a number of companies wooing for financial aid from you?

I think the people who come to us are from all over the world. There are a lot of people who are keen on trying to tap into the liquidity here. We are focused on what asset classes we look at – aviation leasing, real estate, financial services and maritime. We are capable of taking up, in certain cases, distressed assets if they are available but that's not a market that we are aggressively looking after. We are strategic investors and strategic investors are more interested in building long-term value than from picking up value from buying distressed assets.

Are you looking at buying some US distressed assets?

No.

Which regions are monitoring very closely?

Very much Abu Dhabi, the UAE and the Middle East. But Waha Leasing is a global company – leasing is global business so you cannot be a regionally-focused business.

You are focused on the four sectors you have just mentioned – aviation leasing, real estate, financial services and maritime. Real estate, financial services and maritime have been somewhat hammered by the crisis. Which sector could be the star performer, which has the highest growth potential?

They all have growth potentials. We are seeing some good opportunities in the maritime sector; in the leasing sector we are capitalising today on a good opportunity; in the financial services we have a couple of company that we have rolled out and they are starting to grow. Real estate is something that we will be very much involved in down the line.

With regard to maritime and offshore, day-rates and shipping rates have fallen significantly. This sector, like the real estate, is a highly cyclical sector. With the decrease in rates, decrease in asset prices has also occurred. When you are a strategic investor you don't look for short term. You have to be building value, adding something.

How much growth are you expecting for 2009?

The short term is very rough to talk about because global markets are still very constrained. So it's easier for me to talk about the medium and the long term than it is to talk about the short term. We have not discussed short term targets.

So what are your medium and long-term projections?

For the medium and long-term Waha Capital will get involved in different opportunities that will ensure our subsidiaries gain market share and presence. All subsidiaries and the sectors that we are involved in also need to make their mark in Abu Dhabi and in the global economy.

You are also the chairman of Dunia, which has been created by Waha Capital together with Mubadala, Fullerton Financial Holdings and Al Mousa Enterprises. Dunia cannot take retail deposits, right?

Yes.

Is this model sustainable?

The business model is based on not getting retail deposits. The business model is of course sustainable. Opportunities and options will be looked at down the line if and when Dunia is in a position where it needs to attract more deposits.


FOCUS ON THE UAE

Al Waha Capital is further aiming at diversifying sources of income, while meticulously considering emerging business opportunities, especially in the UAE.

"We are committed to keeping shareholder and partner interest paramount in all our business dealings continues to bear fruit," said Salem Rashid Al Noaimi, Waha Capital's CEO.

The company's net profit for the first half of 2009 dropped by 69 per cent from Dh67million to Dh21m. Revenues were up slightly by 0.9 per cent from Dh246m to Dh248m. Total assets were up 6.3 per cent to Dh5bn and total liabilities were up 12 per cent to Dh2.9bn.

Al Noaimi said Waha Capital has achieved significant milestones during the first half of this year, including a mandate to manage a Dh11 billion facility to finance the purchase of military transportation aircraft by the UAE Armed Forces.

He added that Waha Land, the real estate arm of the diversified company, had unveiled its inaugural project Al Markaz – the first fully-fledged, multi-purpose project in Abu Dhabi with an investment of Dh4bn.

"The recent agreement to acquire 50 per cent of AerVenture is yet another achivement," Al Noaimi said. "AerVenture's fleet of 22 Airbus A320 are valued at Dh8.8bn, with 32 confirmed orders for the same aircraft."



PROFILE: Salem Rashid Al Noaimi CEO of Waha Capital

Al Noaimi previously served as Deputy CEO of the company and CEO of Waha Leasing, a wholly-owned subsidiary of Waha Capital.

Waha Capital is focused on economic diversification via the launch of new companies, joint ventures and acquisitions. The company is firmly committed to Abu Dhabi's economic vision through the business operations of its four subsidiaries: Waha Leasing, Waha Land, Waha Maritime, and Waha Financial Services.

Al Noaimi joined the Oasis team in August 2004 as the Director of Business Development and Investor Relations and became the CEO of the company in 2008.

His previous work experience includes stints at Dubai Islamic Bank, the UAE Central Bank, the Abu Dhabi Fund for Development and Kraft Foods.

He is a member of the board at a number of companies including Abu Dhabi Ship Building, Dunia Finance, Siraj Finance, Mena Infrastructure Fund and Bahrain's Addax Bank. Al Noaimi has a Bachelor's Degree in Finance and International Business from the Northeastern University in the United States.

 

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