Inovest in new water technology venture
Manama, March 30, 2009
Inovest, a Bahrain-based shariah compliant investment company, has launched a new water technology venture in partnership with a US company.
Inovest, (previously Al Khaleej Development Company – Tameer) said the launch of the product would ensure the company’s first step towards widening its Islamic investment pool through shariah compliant transactions favoured by investors in today’s markets.
The product launch is subject to approval from Central Bank of Bahrain and other statutory approvals, the company added.
The prospect is for a manufacturing facility with a short gestation, designed to produce water filter cartridges for use in the household, industrial and commercial sectors, as well as in desalination plants across the Middle East North Africa (Mena) region.
The manufacturing knowledge to be deployed is based on proven world renowned melt blown technology brought by the company’s technology partners who are themselves established pioneers in the field, as well as suppliers of similar technology to recognised US and European manufacturers, it said.
In illustration of their confidence in the project, Inovest’s technology partners are taking up a 20 per cent stake in the venture and are also offering firm buyback of 50 per cent of the production.
The remaining 50 per cent will be sold in the open Mena market. The project, which is likely to be based at Bahrain Investment Wharf, will use environmentally clean, efficient technology without any emissions, a top company official said.
“Our planned facility caters to a specific niche market; with a project at a size of $32 million. The net equity offering will be $24 million of which $7.2 million is being subscribed to by Inovest and its technology partners, leaving a net $16.8 million for high net worth individuals and institutional investors,” Inovest CEO Dr. Khalid Abdulla explained.
Stressing on the eminent need for the facility, Dr Abdulla pointed out that Saudi Arabia alone spent $6 billion on investments in desalination.
The project has been structured with risk mitigation on sale through a firm off-take agreement, while also ensuring long term raw material supply at a favorable price, based on a strategic long-term buying agreement with a top Saudi petrochemical supplier.
According to experts, water technology ventures are likely to provide lucrative returns to investors even in the most conservative of scenarios.
Inovest will continue to structure and introduce innovative products that satisfy the market and investor needs for shariah compliant transactions that are ethical, transparent, risk adjusted and offer attractive returns, he added.-TradeArabia News Service
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