Abu Dhabi's GHC unveils $10bn expansion plans
Abu Dhabi, May 9, 2010
Abu Dhabi conglomerate General Holding Corporation (GHC), the parent of Emirates Steel, will invest $10 billion over the next 'few years' to grow its business through acquisitions and internally, a top executive said.
'Our cash flow is very positive, very strong,' Hussain al-Nowais, vice chairman of General Holding, told Reuters in an interview. 'We have over $4 billion in cash and we are going to invest on an average that much every year over the next few years.'
Abu Dhabi government's industrial investment arm, GHC on Sunday registered a 61 per cent jump in its 2009 net profit which rose to Dh1.13 billion ($307.7 million). The firm's total assets rose 16 per cent to Dh18.4 billion during the period.
The total investable amount will be made available from cash flow, bank borrowing, and contributions from potential partners, said Nowais. Expansion will be achieved through co-operation with local and international partners, he added.
'It's a combination of growing existing businesses, building new ones, and acquisitions of businesses that can compliment and expand our portfolio,' Nowais said.
Nowais said the company is eyeing an engineering company and another firm in the steel sector for acquisitions.
The latter is based in the Gulf Arab region, he said, but declined to be more specific. A decision on the deal will be made in the next one or two months, he said.
The company is also considering two projects in aluminium and steel worth more than $1.5 billion to be implemented through partnership with a global player and likely to be announced in the second half of the year, he said.
'We are also looking at other opportunities in the chemical and polymer businesses,' he added.
Emirates Steel Industries, part of GHC, which is planning to refinance $1.5 billion for the expansion of its steel plant in January, may reach a deal in the next few weeks according to the executive.
'The initial indication will be oversubscribed. There are more banks willing to give us money than we need and we have also been able to achieve for the first time export credit finance through Italian export credit agency for our steel plant,' said Nowais.
Refinancing will be through a combination of credit export finance, Islamic project finance funding, and commercial bank funding, he added.
'This will be announced in the next few weeks but the initial structuring is there,' Nowais said.
The steel company is on track with its plan to double its existing capacity, he added.
The firm, the UAE's largest integrated steel plant, exports steel to Iraq, Sudan and Jordan with a 60 percent share in the local market.
The plant's production is set to reach 3 million tonnes by the fourth quarter of 2010 and it aims to produce 6.5 million tonnes annually by 2014.-Reuters
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