Arabtec to list shares of unit in Abu Dhabi

Electronic boards displaying stock information are seen as investors look on the floor of the Abu Dhabi stock market. Arabtec, in which Abu Dhabi state fund Aabar owns a major stake, is trying to evolve from a local contractor into a multinational development company.

Reuters/Abu Dhabi

Dubai contractor Arabtec Holding plans to list a portion of its construction unit in an initial public offering (IPO) on the Abu Dhabi bourse next year, the group chief executive said yesterday.

IPOs dried up in the UAE when its financial crisis erupted five years ago but a recovery in the economy, especially in Dubai, has led to some firms announcing plans to list shares in the coming months.

Arabtec, in which Abu Dhabi state fund Aabar owns a major stake, is trying to evolve from a local contractor into a multinational development company as its finances are boosted by a recovery in Dubai’s property market. CEO Hasan Ismaik said the plan was to float about 40% of the company’s construction subsidiary, which he valued at 10bn dirhams ($2.7bn).

Dubai-listed Arabtec announced plans in February to set up five new subsidiaries to focus on areas including new geographic markets, the real estate sector and infrastructure projects.

Ismaik, speaking at a press conference after the company’s annual shareholders meeting in Abu Dhabi, added Arabtec also had plans to list parts of the firm on the London, Hong Kong and US markets in the coming years, but did not elaborate.

The contractor, which built the emirate’s famous palm islands, would also engage in multiple acquisitions and mergers by 2018, Ismaik said without giving any more details.

He however denied that it planned to acquire Kuwaiti construction firm Kharafi National. Sources had said the company was in talks to fully acquire the Kuwaiti firm. At the shareholder meeting, the company’s board scrapped previous plans for a cash dividend to shareholders for 2013 and raised its stock dividend to 40%. The company’s board had earlier proposed a cash dividend of 0.1 dirhams ($0.03) per share plus bonus shares worth 30% of its share capital.