Arabtec denies move to delist; says position strong
Dubai, June 12, 2014
United Arab Emirates construction firm Arabtec said on Thursday that it had no intention of delisting from the Dubai stock market, and was seeking with market officials to establish who spread rumours that it might delist.
In a brief statement, the company also repeated that its financial position remained strong and that it would continue expanding in the construction industry.
Arabtec shares have plunged 30 percent in the last four days as a major shareholder, Abu Dhabi state fund Aabar Investments , has cut its stake in the company to 18.85 percent from 21.57 percent.
The decrease in the stake has raised questions over whether Aabar might change its strategy of supporting Arabtec by awarding it business contracts. The Arabtec statement on Thursday did not address this issue; Aabar was not available to comment.
Having failed in an earlier takeover bid, Aabar spent 827.6 million dirhams ($225.32 million) buying up 21.6 percent of Arabtec's shares in 2012 and later led an overhaul of the contractor's board and senior management.
Aabar's buying helped Arabtec's shares rebound. The stock hit an all-time high of 7.4 dirhams on May 15 to be up more than eight-fold since the start of 2012.
Arabtec's shares fell 7.8 percent on Wednesday, taking its losses to 30 percent in four days.
"Is there more to be sold in Arabtec by Aabar and, if not, what is Aabar's investment strategy centred round Arabtec in the longer term?" asked Allen Sandeep, director of research at Naeem Holdings in Cairo. "If yes, then would it affect Arabtec's anticipated growth going forward?"
In February, Arabtec said it would build 37 towers worth 22.44 billion UAE dirhams ($6.11 billion) in the United Arab Emirates for Aabar, while a month later it agreed a $40 billion housing project in Egypt.
The latter project was seen as part of the UAE's support for Egypt following the army's overthrow of former Islamist President Mohamed Mursi.
Arabtec will need Aabar support to fulfil some of these projects, said Naeem's Sandeep.
In an earlier statement on Wednesday, Arabtec said its share price moves had nothing to do with its financial position and that its ambitious expansion plans remained in place.
In May, the company's chief executive Hasan Ismaik raised his own stake in Arabtec to 21.46 percent.
Four of Arabtec's nine board members are associated with Aabar and its parent firm International Petroleum Investment Company, including the chairman Khadem Abdulla Al-Qubaisi. - Reuters