Aabar lifts Arabtec stake to 34.9% in off-market

Reuters

Dubai

 Abu Dhabi state fund Aabar Investments raised its stake in Dubai-listed construction firm Arabtec to 34.93% from 18.94% with an off-market trade yesterday, the bourse said in a statement.

The trade, which made Aabar the biggest shareholder in Arabtec, was done at a price of 5 dirhams per share, compared to the stock’s closing market price of 4.26 dirhams.

Aabar bought the shares from former Arabtec chief executive Hasan Ismaik, who abruptly resigned in June after differences of opinion with Aabar. The stake held by Ismaik and companies related to him has now dropped to 11.8%, the bourse said.

The sale appears to reduce a major source of uncertainty for Arabtec, one of the region’s biggest construction firms, which is involved in projects including a $40bn plan to build 1mn homes in Egypt.

Its share price soared to a record high of 7.74 dirhams in May after deep-pocketed Aabar increased its involvement with Arabtec and steered billions of dollars of business its way.

But the stock then plunged as low as 2.35 dirhams in July, dragging down the entire stock market, after Aabar sold part of its stake and Ismaik’s resignation caused investors to fear the Abu Dhabi fund might cut its support of Arabtec.

Aabar’s decision to rebuild its holding in Arabtec is now likely to be taken as a sign that it will use its resources to continue developing the construction firm as a top regional player.

After Ismaik resigned, he held weeks of talks with Aabar on selling part of his stake; in late August he told Reuters that he wanted over 5 dirhams per share in any deal. He has not said what he will do with his remaining stake in Arabtec.