#GCC and #MiddleEast Finance News: 20 Dec 2011

Tuesday 20 December 2011

Al Rahji Steel to Issue IPO on Saudi Stock Exchange Using BNP Paribas - Arabianomics

Trade Arabia reports that Al Rahji Steel is preparing a $3 billion IPO for the Saudi Stock Market using the financial services of French financial giant BNP Paribas.
The report notes that the timing of the IPO is still unclear.
The $3 billion will finance a new steel complex north of Jeddah at the King Abdullah Economic City (KAEC).

Aldar of Abu Dhabi Drops to Record Amid Bets on Delisting; Yield Declines - Bloomberg

The shares dropped 2.3 percent to 85 fils, the lowest since their listing in April 2005, at the 2 p.m. close in Abu Dhabi. Sorouh Real Estate Co. (SOROUH), the emirate’s second biggest developer, retreated 1.2 percent to a record low of 81 fils. Abu Dhabi’s benchmark ADX General Index (ADSMI) lost 0.8 percent to 2,373.11, closing at the lowest since March 2009.
“Investors are concerned about a possible scenario of delisting” after a bond conversion by state-owned Mubadala Development Co., Tariq Qaqish, deputy head of asset management at Dubai-based Al Mal Capital, said by e-mail today.
Aldar, grappling with tumbling property prices in Abu Dhabi, last week converted bonds valued at 2.1 billion dirhams ($572 million) held by Mubadala, its largest shareholder and an investor with stakes in Carlyle Group and General Electric Co. (GE), into shares of 1.75 dirhams each. That was at the bottom end of the agreed range of 2.30 dirhams to 1.75 dirhams.

MENA stock markets close - December 20, 2011

Exchange

Status

Index

Change

TASI (Saudi Stock Market)

6288.28

0.20%

DFM (Dubai Financial Market)

1360.8

-0.98%

ADX (Abudhabi Securities Exchange)

2373.11

-0.84%

KSE (Kuwait Stock Exchange)

5822.8

0.17%

BSE (Bahrain Stock Exchange)

1144.21

-1.28%

MSM (Muscat Securities Market)

5633.53

-0.67%

QE (Qatar Exchange)

8780.45

0.41%

LSE (Beirut Stock Exchange)

1196.27

0.49%

EGX 30 (Egypt Exchange)

3706.3

-2.52%

ASE (Amman Stock Exchange)

1975.81

-0.14%

TUNINDEX (Tunisia Stock Exchange)

4683.1

-0.28%

CB (Casablanca Stock Exchange)

11310.5

1.86%

PSE (Palestine Securities Exchange)

472.06

0.07%

Dubai shipyard firm looks to joint ventures | DailyComet.com

The head of Dubai's state-run shipbuilding company said Tuesday the firm is in talks with potential partners about sharing control of some of its Asian businesses.

The joint venture partnerships could be a way for DryDocks World, a division of troubled state conglomerate Dubai World, to generate extra cash as it looks to close a $2.2 billion debt restructuring process hanging over the company.

DryDocks World Chairman Khamis Juma Buamim told reporters he hopes to have a deal in place with lenders on the drawn-out restructuring by March.

Qatar to Pay 2.19 Percentage Points Over Libor for Barzan - Bloomberg

Qatar Petroleum will pay an interest rate of 2.19 percentage points over Libor for $3.34 billion in bank loans to help finance the Barzan natural-gas project, Finance Director Abdul Rahman Al Sheebi said.
Qatar Petroleum, the Gulf country’s state-run energy company, said on Dec. 13 it had completed financing arrangements for Barzan with a $7.2 billion syndicated loan. The project will be funded with as much as 30 percent equity, while banks together with export credit agencies from Japan, Korea and Italy will provide debt, the company said at the time in an e-mailed statement.
Interest on the bank-loan component will be charged at the spread over Libor, or the London interbank offered rate, Al Sheebi said today in Mesaieed, Qatar.

Dubai Shares Rise a Third Day as Emaar Pays Less on $980 Million - Businessweek

Dubai shares rose for a third day, led by Emaar Properties PJSC after the builder of the world’s tallest skyscraper paid a lower price than for its existing debt to raise $980 million.

Emaar, which has a weighting of 17 percent in Dubai’s benchmark, gained the most in a week. Tamweel PJSC, a Dubai- based company offering mortgage financing, advanced the most since Nov. 30. The benchmark DFM General Index increased 0.2 percent to 1,377 at 10:56 a.m. in the emirate. The Bloomberg GCC 200 Index, which tracks the biggest 200 companies in the region, lost less than 0.1 percent.

The Emaar loan “will put less pressure on financing expenses,” said Samer Darwiche, an analyst at Gulfmena Investments in Dubai.

European Goldfields mulls Qatari fallback option | Reuters

European Goldfields , which has agreed a C$2.5 billion ($2.4 billion) takeover by Canadian group Eldorado Gold, is hoping to keep an investment deal with Qatar's sovereign wealth fund as a fallback option.

Qatar Holdings agreed in October to provide a $600 million project financing loan to European Goldfields, which has development stage assets in Greece and Romania, in its first investment in a gold miner. It also provided a $150 million loan note and a related warrant issue, and became a major shareholder, with a 9.9 percent stake.

Eldorado's strong balance sheet means European Goldfields is unlikely to need the cash from Qatar if the takeover goes through -- but it does need two-thirds of shareholders to back the deal when they vote in February.

Qatari royals, Luxembourg to buy Dexia's BIL | Reuters

Qatar's royal family and Luxembourg are to buy Dexia's (DEXI.BR) private banking arm Banque Internationale Luxembourg for 730 million euros ($950 million), as part of the Franco-Belgian group's bailout plan.

"Precision Capital, a Qatari investment group, will acquire 90 percent of the stake, the remaining 10 percent will be acquired by the Grand Duchy of Luxembourg," Dexia said on Tuesday.

Luxembourg-based Precision Capital, owned by members of Qatar's al-Thani royal family, has previously invested in European banks, among them British lender Barclays (BARC.L) in an emergency fundraising three years ago.

Emaar Properties lifts Dubai; Abu Dhabi extends drop - Stocks - ArabianBusiness.com

Dubai's Emaar Properties rose from Monday's three-week low after saying it signed a $1bn financing deal, helping lift the emirate's index.
Shares in Emaar climbed 2.3 percent to trim their year-to-date losses to 26.2 percent.
"[The] deal could alleviate concerns related to Emaar's short-term liquidity and reduce the overhang on the stock resulting from these concerns," EFG-Hermes said in a note.

Dubai World unit sees US$2.2 billion debt restructuring deal in March - bi-me.com

Drydocks World LLC, the ship-repair unit owned by state-controlled Dubai World, expects to reach a deal on restructuring US$2.2 billion of debt with creditor banks in March, Chairman Khamis Juma Buamim said.

“We have not asked for government guarantees’’ for the restructuring, Buamin told reporters in Dubai today. The company has proposed to pay back the loan in five to eight years, he said.

Drydocks World borrowed US$1.7 billion for three years in August 2008 from a group of banks at 170 basis points over the London interbank offered rate to fund an acquisition, according to data compiled by Bloomberg.

Oman records $2.15b surplus - Emirates 24/7

High crude output allied with a sharp rise in oil prices to allow Oman to record one of its largest budget surpluses in the first 10 months of 2011 despite a sharp rise in expenditure, according to official data.

After registering a deficit of around RO91.2 million ($510 million) in the first 10 months of 2010, the Gulf country’s budget balance turned into a massive surplus of RO830.1 million ($2.15 billion) in the first 10 months of 2011, showed the figures by the Omani ministry of national economy.

The massive surplus was mainly a result of a 60 per cent rise in oil export earnings to nearly RO7.15 from RO4.45 billion due to a sharp rise in crude prices and Oman’s oil production to nearly 882,000 barrels per day from 860,000 bpd in the same period. High oil income boosted the country’s total actual revenue by about 44 per cent to RO9.31 from RO6.44 billion.

Emaar’s $1bn loan shows refinancing should not be a problem for Dubai in 2012 « ArabianMoney

The ability of Emaar Properties to close a $980 million syndicated loan from three banks yesterday suggests that refinancing a $10 billion debt pile for Dubai Government and related entities should not be a problem in 2012.

Emaar pledged the Dubai Mall as collateral for the five-to-eight year loan package from Dubai Islamic Bank, National Bank of Abu Dhabi and Standard Chartered Bank, and will pay just five per cent interest. Corporates around the world have been rushing to fix loan deals at current low interest rates that may not last in another financial crisis.

Buying Air Berlin stake is a clever game changer by Etihad Airways to get to the heart of Europe « ArabianMoney

Abu Dhabi’s state-owned airline Etihad is cleverly expanding its feeder network in Europe’s richest nation through the acquisition of a 29.2 per cent stake in Air Berlin, a massive jump on its previous 2.99 per cent interest in the low-cost carrier.

For Air Berlin this means a $225 million cash infusion to pay for five-years of fleet development. Together the two airlines carry 40 million passengers a year in 233 aircraft and have annual revenues in excess of $9 billion.

gulfnews : Iraq will collapse if oil and gas law is not put in place

In a nutshell: Iraq needs an oil and gas law badly — right now — but the Iraqi central government and provinces are unable agree on the way to go about signing oil contracts.
I have no doubt that this law will be the glue that holds the country together and prevents it from splintering and collapsing into 100 pieces before everyone's eyes. We don't need or want another Humpty Dumpty in Iraq, as we have had our share of broken hearts and heads over the past 40 plus years.
Why the law has been so long in the making may well be another indicator of the inability of all Iraqi blocs, government entities and provinces to reach a basic agreement about a life-threatening issue.

Saudi King Abdullah Calls for a Closer Arab Gulf Union - Bloomberg

Saudi Arabia’s King Abdullah called on leaders of the six-nation Gulf Cooperation Council to strengthen their alliance into a united “single entity” as they confront threats to national security.
“I ask you today to move from a stage of cooperation to a stage of union in a single entity,” Abdullah said at the opening session of a GCC meeting in Riyadh in comments aired on Saudi state television. “No doubt, you all know we are targeted in our security and stability.”
The GCC leaders’ two-day summit may focus on measures needed against Iran and the impact of unrest in Syria. The gathering of the group, led by Saudi Arabia and allied to the U.S., comes amid rising tensions between Iran and the U.S., which is increasing pressure over the Iranian nuclear program.

Abu Dhabi's Burooj in on Cairo project - The National

Palm Hills Developments has hired Orascom Construction Industries to build a US$93 million (Dh341.56m) residential complex outside Cairo, its first project in a partnership with Abu Dhabi's Burooj Properties.

Village Gardens Katameya covers 285,600 square metres in east Cairo, near the American University.

Burooj, the property investment arm of Abu Dhabi Islamic Bank, has already purchased 425 units in the complex, with a total value of 286m Egyptian pounds (Dh175.4m).

Gulf states urged to make petrochemical goods - FT.com

Gulf states can create jobs by moving downstream into advanced petrochemical technologies and using their deep pockets to buy companies in Europe and the US with valuable intellectual property rights, according to KPMG, the consultants, and the Gulf Petrochemical and Chemical Association.
KPMG argues that for every $1m of investment in a large ethylene cracker, which produces so-called first generation petrochemicals, only one job is typically created. But if the ethylene is converted into styrene, a downstream derivative, and then further into rubber goods, up to 20 jobs may be created per $1m of investment, the consultants say.

Qatar injects $2bn to revive finance hub dream - FT.com

Qatar’s sovereign wealth fund is quietly putting up as much as $2bn in an effort to tempt asset management companies to beef up the country’s stubbornly small financial services industry.

Bankers say the Qatar Investment Authority plans to invest the money in global and regional asset managers setting up in the Gulf state, whose bespoke Qatar Financial Centre has failed so far to draw large volumes of custom.

The Qatar initiative faces competition from other Gulf Co-operation Council states which are trying to win more financial services business by exploiting capital piling up in the oil-rich region and in emerging Asian economies conveniently located to the east.
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