Author: Almaskan/Tuesday, June 17, 2014/Categories: General
Shares in Arabtec, one of the most heavily traded stocks in Dubai, have plunged 48% from their May peak to close at 4.05 dirhams on Monday, dragging down the entire Dubai market.
One factor behind Arabtec's slide was the decision of Aabar, an Abu Dhabi state fund, to cut its stake in the company to 18.85% from 21.57% between 8 and 11 June. The stake is now 18.94%, according to bourse data.
The divestment raised fears among investors that Aabar, which has played a key role in steering billions of dollars of contracts to Arabtec, might be reducing its commitment to the firm.
Aabar has declined to comment on its strategy.
In an interview with Al Arabiya television on Monday, Arabtec's chief executive Hasan Ismaik said recent rumours of a conflict between the managements of Aabar and Arabtec were untrue.
"What is happening to Arabtec's share price has no basis and does not reflect the fair value of the stock," Ismaik said, speaking after the stock plunged its 10% daily limit on Monday.
As Aabar has cut its stake, Ismaik has raised his own holdings in the company. In late May, Arabtec said Ismaik had raised his stake to 21.46% from 8.03%; on Sunday, bourse data showed his stake had risen further to 28.85%.
Ismaik said on Monday that the recent changes in Arabtec's ownership structure had nothing to do with its huge project pipeline, which he put at AED215bn ($58.6bn) around the region. This apparently includes a $40bn deal announced earlier this year to build one million homes in Egypt.
The chief executive added he had no intention of increasing his stake in Arabtec any further and repeated there was no intention to delist Arabtec from the Dubai Financial Market.
In early June, Forbes magazine said Ismaik, 37, had become the first Jordanian billionaire - and the third-youngest billionaire in the Middle East - because of his Arabtec stake, estimating his net worth at $1.4bn. Forbes said it was not clear where Ismaik raised the money to boost his Arabtec stake.
Arabtec announced on Sunday that its board would meet on 18 June to discuss the company's projects, among other issues.
Four of Arabtec's nine board members are associated with Aabar and Aabar's parent firm International Petroleum Investment Co, including Arabtec chairman Khadem Abdulla al-Qubaisi. The board meeting will take place at IPIC headquarters in Abu Dhabi.
Number of views (2479)/Comments (0)
AL MASKAN Engineering Consultants in UAE's Ras Al Khaimah and Abu Dhabi branch is one of the outstanding private sector institutions in the consulting sector architecture and civil engineering and project management. Date of the first establishment of the Foundation 27/11/2004.
For more details please click here
Please Click Here to See our catalog