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Tuesday, 13 April 2010

Dubai's Utility DEWA To Sell 5-Yr, Benchmark Size Bond-Banker -

Dubai's Utility DEWA To Sell 5-Yr, Benchmark Size Bond-Banker -

State-utility Dubai Electricity & Water Authority, or DEWA, will sell five-year, dollar-denominated bonds in a benchmark-sized issue this week, a banker familiar with the deal said Tuesday.

DEWA, which started a series of fixed-income investor meetings last week, will wrap up its road show on Wednesday and a bond issue is expected this week, the banker told Zawya Dow Jones.

Exact size and pricing of the issue is yet to be determined, the banker said.

Saeed Mohammad Al Tayer, Dewa's managing director, said last month that the company plans to raise up to $1.5 billion through a bond issue, which he expects to go ahead in the second quarter of this year.

The bond sale will mark the first deal out of Dubai, which is restructuring debt at its conglomerate Dubai World, since the emirate itself issued a two-part sukuk offer last October.

DEWA is rated 'Ba2' by Moody's Investors Service and BBB- by Fitch Ratings.END

Dubai Dept Finance Repays AED840M Sukuk Installment -

Dubai Dept Finance Repays AED840M Sukuk Installment -

Dubai's Department of Finance has repaid a 840 million U.A.E. dirham ($229 million) Islamic bond installment for Dubai Civil Aviation, according to a statement from the government Tuesday.

The payment is the first of three equal installments of a $635 million multi-currency Ijara facility maturing in April 2011 for Dubai Civil Aviation, the statement said.

Abdulrahman Al Saleh, Director General of the Department of Finance in Dubai said in the statement that the payment reaffirms the Dubai government's commitment to honor all its financial obligations.

Dubai spooked international markets in November last year by suddenly announcing the need to restructure $26 billion of debt for one of its largest state-owned companies Dubai World. The emirate and its related companies is estimated to have debts of about $100 billion.END

Kuwait Stocks Fall Most in Two Months After Agility Indictment

Kuwait’s benchmark index retreated the most in two months, led by Agility after a U.S. federal grand jury indicted two affiliates of the Middle East’s largest storage and logistics company. Bahrain’s measure also fell.

Agility dropped the most in three months. Zain, the country’s largest telecommunications company, declined to the lowest since March 16. In Bahrain, Ahli United Bank BSC fell for the third time in four days after the central bank said it doesn’t have details about a proposed share sale in the lender. The Kuwait Stock Exchange Index lost 0.8 percent, the most since Feb. 17, to 7,487.2. Bahrain’s All Share Index declined 1.6 percent.

“It’s not getting better for Agility, and the potential fallout from the indictment is significant,” said Ibrahim Masood, a Dubai-based fund manager at Mashreqbank PSC, who helps manage about $400 million. “It is difficult to say how long the legal process will end up taking.”

Conoco Said to Bet on U.A.E. Alliance in Caspian Oil Race

ConocoPhillips plans to team with Abu Dhabi-backed Mubadala Development Co. to bid for oil and gas fields in the Caspian Sea off Turkmenistan after an attempt with Russia’s OAO Lukoil foundered, a person familiar with the strategy said.

ConocoPhillips, the third-biggest U.S. oil producer, has worked with Mubadala in the Turkmen part of the sea for the past six months after Lukoil’s attempt to gain Block 21 failed in September, said the person, who declined to be identified during the bidding process.

The Houston-based company and Mubadala won access to Block N in Kazakhstan’s sector of the Caspian in 2008 and plan to drill an exploration well in the third quarter. ConocoPhillips may find a partnership with an Arab oil producer to be a preferable route to Caspian resources than with Lukoil, Russia’s largest non-state oil company, Julia Nanay, an oil analyst at PFC Energy, said by e-mail.

Dutch Court Rejects DIC's Almatis Petition - Sources

A Dutch court on Monday turned down Dubai International Capital's petition to allow it more time to finalize and implement a refinancing plan for German aluminium company Almatis, people familiar with the matter said Monday.

The Amsterdam Court of Appeals' decision means that distressed debt investor Oaktree Capital, which is trying to take over the company through a debt restructuring, will now go ahead with its plans to file for U.S. Chapter 11 bankruptcy for Almatis, one the people said.

Oaktree plans to use the Chapter 11 procedure to instigate a debt-for-equity swap that will more than halve Almatis' $1 billion debt to around $422 million. Subordinated-mezzanine and second-lien lenders and DIC's equity stake will all be wiped out under the plan.

Oaktree holds 46% of Almatis' senior debt and had support from at least an additional 22% of senior lenders.

Oaktree is expected to make the Chapter 11 filing for Almatis on Thursday.

Almatis's management supported Oaktree's plan in court, saying it is the only credible and viable option, as did the worker's council, which represents Almatis employees, and the company's senior lender coordinating committee.

However, another person familiar with the matter said DIC will continue to pursue its plans to refinance Almatis, which it is entitled to do under the Chapter 11 procedure.

DIC's refinancing plan consisted of a $350 million high-yield bond, $165 million to $240 million of subordinated debt and a $100 million equity injection from DIC, people previously told Dow Jones Newswires.END

U.A.E. Bankruptcy Law Needed to Prevent Problems, Official Says

The United Arab Emirates must pass a bankruptcy law to help mitigate future financial difficulties of the type being experienced by some of the region’s largest companies, a Dubai Chamber of Commerce official said today.

“Proper due diligence must be conducted to know what is the health of the companies and their suppliers and what kind of difficulties the companies are going through,” Hisham Al Shirawi, vice chairman of the chamber said today in an interview in Sharm El-Sheikh, Egypt. “Once we have all of those factors addressed properly, then we can have a proper bankruptcy law.”

The law would involve stricter criteria than current U.S. legislation, he said. Passage of the new law will probably coincide with a move to raise foreign ownership limits from the current 49 percent, he said.

U.S. slaps new fraud indictment on Kuwait's Agility

The new indictment contained no new charges against Agility, the Gulf's biggest logistics firm and the main food supplier to the U.S. military in Iraq and Kuwait.

Instead, it extended existing charges to include two company affiliates: U.S.-based Agility DGS Holdings Inc and Agility DGS Logistics Services K.S.C., which is based in Kuwait.

The reason for doing so was to "cure" a technical problem with the original indictment, said parent company Agility, formerly Public Warehousing Company K.S.C. (PWC).

IFC, sovereign wealth funds partner in $800 mln fund

IFC, the World Bank's private-sector lender, said it had invested $200 million in the fund and additional commitments were from Dutch pension fund manager PGGM, Korea Investment Corp, State Oil Fund of the Azerbaijan Republic and a fund investor from Saudi Arabia.

The fund will be managed by IFC Asset Management Company, a wholly-owned subsidiary of IFC, which will buy equity stakes in companies in Africa, Latin America and the Caribbean.

World Bank President Robert Zoellick in 2008 called on state-owned wealth funds to invest some of their cash in potentially lucrative markets in developing countries to boost economic growth through investment in companies.

Dubai Forms Finance Team For New Strategy

Debt-laden Dubai Sunday took its latest step to reorganize its economy by creating a new team of policymakers to develop a fresh financial plan for the sheikdom.

Known as the Dubai Government Finance Team, the organization will develop a new medium-term financial strategy for Dubai up to 2014 after its overweight real estate industry exposed its previous plan during global downturn.

According to a government statement Sunday, the team will be led by Jamal Hamed Al-Marri, director of central accounts at the Department of Finance and include representatives from the Department of Finance, Dubai Police, Dubai Municipality, the Roads and Transport Authority, Dubai Customs, Dubai Health Authority and Dubai Airports Authority.

"This step comes as part of a series of financial reforms aimed at enhancing efficiency of government spending, both capital and operational, and bolstering the rules that form the basis of Dubai's fiscal policy," the Dubai government statement said.END

Hopes rise for return of private equity deals

Last year, many regional private equity executives, though shocked at the scale of the financial crisis, were confidently forecasting a “vintage year” for investments in the Middle East.

Firms, after all, had plenty of “dry powder” to take advantage of the economic downturn and subsequent drop in asset valuations. Between 2006 and 2008, 85 funds concentrating on the Middle East and north Africa raised $18.2bn, according to Preqin, a data provider, and much of it had yet to be invested when the crisis struck.

Yet a bumper crop of transactions failed to materialise. Apart from a few smaller deals – such as Investcorp, Eastgate Capital and The National Investor’s club deal to acquire a 70 per cent stake in Saudi jeweller L’Azurde – regional private equity houses largely stayed on the sidelines.