arabtec plans 13bn 2 phase rights issue
Last Updated : GMT 08:42:25
Arab Today, arab today
Arab Today, arab today

Arabtec plans $1.3bn 2 phase rights issue

Arab Today, arab today

Arab Today, arab today Arabtec plans $1.3bn 2 phase rights issue

Abu Dhabi - Arabstoday

Dubai-based Arabtec Holding, a leading Mena construction company specialising in complex projects, will raise its share capital through a two-phase rights issue worth Dh4,771 million ($1.3 billion), the company announced today. “We have adopted a phased approach to raising capital over the next two years. We aim to raise up to $650 million in rights issue this year and a further rights issue of up to $650 million in 2014 , if needed,” said Hasan Abdullah Ismaik, managing director and CEO. The company may also issue non-convertible bonds of up to $450 million at the end of the year if needed, he said. The proposal to increase capital has received approval from the Securities and Commodities Authority (SCA), a statement said. The company will issue up to 3,180,666,667 shares with a nominal value of Dh1 and an issuance premium of Dh0.50 per share. The first phase is expected to be by the end of June, 2013 for an amount of up to Dh2,385.50 million or 1,580.333 million shares and the second phase is for an amount of up to Dh2,385.50 million or 1,580.333 million shares, if and when required, during 2014, it said. The capital increase is essential to help the company achieve its strategy, said Ismaik. “It will also provide our shareholders the opportunity to be part of our growth and value creation over the coming years.” The construction industry in the Mena region is forecast to grow in the next 7-10 years, and Arabtec is well-placed to benefit from it. Arabtec is currently working on some of the most prestigious projects in the Middle East, such as the Midfield Terminal development at Abu Dhabi International Airport and a regeneration project in the centre of the Qatari capital, Doha, and is also expanding into other regions, the statement said. The company’s pipeline is strong with Dh21.5 billion backlog of ongoing and future projects. The Board of Arabtec has approved a detailed growth strategy for the next five years, which is underpinned by organic as well as acquisitive growth, and the formation of world-renowned joint ventures. With increasing competition in Arabtec’s traditional construction markets, competitiveness for new contracts is intensifying. Therefore, it is necessary to focus on higher-margin sectors and new geographic areas in order to achieve growth. The strategy is focused on expanding Arabtec into new high margin sector and markets with significant growth opportunities, it said.   The Board sees the main opportunities for the next phase of growth as being characterised by: • Certain sectors will dominate construction expenditure: infrastructure, power, oil & gas and affordable housing • Regional “hotspots” – Middle East and India will experience higher construction market growth than other regions For the next two years, the GCC construction market in Saudi Arabia, Kuwait, Qatar and the UAE is forecast to grow at rates between 6 per cent and 8 per cent. Arabtec is already a construction leader in these core markets with iconic projects such as the Burj Khalifa, Emirates Palace, the Louvre Abu Dhabi and Msheireb Downtown in Doha, Qatar, said the statement. The Middle East’s major projects market in oil and gas, power and infrastructure is gaining momentum with the region’s 100 biggest schemes currently under construction accounting for more than $304 billion of capital spending. Activity, in these sectors, in 2013 and beyond is set to increase with the top 50 projects planned or under way across the region valued at $1.56 trillion, a 42 per cent increase on the previous year. Affordable housing in the region is another key growth area with an estimated shortage of 3.6 million affordable houses in key Mena markets. This shortfall is expected to increase as the supply of homes fails to keep pace with the demand. Use of proceeds Having identified the key growth opportunities, the total proceeds from the two right issues are expected to be applied across four key areas over the next two years. These include the following; 1. Affordable housing (25% of total) : Arabtec is a leader in building affordable housing.  In Dubai the company is building 1,500 villas and in Saudi Arabia 5,000 villas.  Using its advanced Tunnel Form technology, which is a cost and time efficient way to build homes by pouring cement in to steel moulds, Arabtec is currently completing the equivalent of 55 villas per day in Saudi Arabia. Arabtec plans to rapidly expand in this field, in geographies, which include Saudi Arabia, UAE, Kuwait, Oman, Bahrain, Morocco and India. This expansion will require capital expenditure to purchase the plant and machinery and put in place the required labour force. 2. Oil & gas, infrastructure and power (55% of total): The company is looking to expand its current Engineering, Procurement and Construction (EPC) subsidiary, Target Engineering, through geographic growth and certain acquisitions which will enhance the company’s engineering expertise and capabilities. Arabtec is already in advanced discussions reviewing partnership options with leading global EPC companies. The company aims to form a joint venture partnership with a leading firm that will provide Arabtec the engineering expertise to win contacts for large scale projects which can be worth up to $7 billion in contract value. This will involve a large initial investment in heavy equipment, advanced technology, personnel and training. 3. Strengthening existing businesses (15% of total): Arabtec’s Mechanical, Electrical and Plumbing (MEP) division is a key business, which produces gross margins of between 13%-18%.  On average, 25%-40% of build cost is MEP.  EFECO, Arabtec’s MEP subsidiary, requires funds to increase its capital base and improve material integration so that it can compete with larger players.  At the moment, EFECO’s limited capital base restricts the size of projects it can carry out.  By strengthening its capital base it will now be able to compete with the larger players in the industry.   4. Systems Restructuring  (5% of total) : Arabtec plans to carry out group wide system enhancements, which is focused on implementing Enterprise Resource Planning (ERP) and creation of a Shared Service Centre (SSC) at the holding level.  This will involve an investment in software and hardware to cover 42,000 people across all group companies, with regard to Finance, Treasury, IT, Legal, Audit, HR, Compliance and Communication and investor relations.  The creation of a SSC will centralize key functions and reduce overall costs to the group, enhancing margins and overall shareholder value. As part of this overall process, it will also include a centralised office space to facilitate vertical integration across the Arabtec group of companies to reduce costs and improve margins. TradeArabia News

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

arabtec plans 13bn 2 phase rights issue arabtec plans 13bn 2 phase rights issue

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

arabtec plans 13bn 2 phase rights issue arabtec plans 13bn 2 phase rights issue

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today Prince's vision spurs new Cornwall village

GMT 03:12 2017 Saturday ,18 November

Prince's vision spurs new Cornwall village
Arab Today, arab today Keep kids busy at Thanksgiving gatherings

GMT 11:14 2017 Friday ,10 November

Keep kids busy at Thanksgiving gatherings
Arab Today, arab today Israel ready to cooperate with Saudi

GMT 06:31 2017 Friday ,17 November

Israel ready to cooperate with Saudi
Arab Today, arab today Airbnb raided by Japan

GMT 01:55 2017 Saturday ,18 November

Airbnb raided by Japan
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Australian academic's book pulled

GMT 15:20 2017 Monday ,13 November

Australian academic's book pulled
Arab Today, arab today May under Brexit pressure at EU reform summit

GMT 02:14 2017 Saturday ,18 November

May under Brexit pressure at EU reform summit
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Tesla unveils its all-electric semi truck

GMT 02:59 2017 Saturday ,18 November

Tesla unveils its all-electric semi truck
Arab Today, arab today Baidu speeds up AI progress

GMT 11:46 2017 Friday ,17 November

Baidu speeds up AI progress
Arab Today, arab today Ayten Amer happy for “The Flood” success

GMT 08:06 2017 Wednesday ,15 November

Ayten Amer happy for “The Flood” success
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 08:21 2017 Tuesday ,14 November

Nelly Karim focuses on humanitarian roles

GMT 11:15 2017 Thursday ,16 November

Angola oil boss sacked by father's protege

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 11:49 2017 Thursday ,17 August

Egyptian artist presents new collection of designs

GMT 06:13 2017 Friday ,17 November

Pope denounces healthcare inequality

GMT 05:18 2017 Thursday ,16 November

Boeing announces $27bn from flydubai

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday