In the long history of disastrous leveraged buyouts, a place must be reserved for Travelodge, the 500-strong budget hotel chain which has escaped administration only because its landlords approved one of those company voluntary arrangement proposals where they agree to suffer a lot of pain rather than excruciating pain. Or, to use the estimate of KPMG, acting as supervisor of the CVA, affected landlords will get 23p in the pound versus 0.2p in administration. Yes, that's the sort of choice that gets a 96% majority.
It is not, however, an outcome that draws an explanation, let alone an apology, from the folk who imposed the calamitous high-debt financing structure on Travelodge in 2006. That outfit was Dubai International Capital. DIC long ago wrote off its investment in Travelodge and is reckoned to have lost £400m, which perhaps explains its reluctance to rake over the coals.
Tuesday, 4 September 2012
MIDEAST STOCKS-Saudi dips for 4th day; Egypt at 14-mth high - Yahoo! News Maktoob
Saudi Arabia's bourse closed lower for a fourth day on Tuesday and other Middle East markets were mixed as investors waited for cues on policy action from European central banks to tackle slowing economic growth. The kingdom's index lost 0.4 percent, edging further away from Wednesday's 16-week high.
Petrochemical stocks were the main drag, with Saudi Basic Industries Corp (SABIC), the world's largest chemicals producer, falling 1.7 percent. National Industrialization dipped 0.9 percent and Saudi Kayan Petrochemical declined 1.1 percent.
Petrochemical stocks were the main drag, with Saudi Basic Industries Corp (SABIC), the world's largest chemicals producer, falling 1.7 percent. National Industrialization dipped 0.9 percent and Saudi Kayan Petrochemical declined 1.1 percent.
Travelodge Creditors Vote Through Debt Deal
Travelodge's landlords have backed a controversial rescue plan to help the budget hotel chain overcome its crippling debt burden.
The arrangement will see the company offload 49 of its poorer-performing hotels to other operators, and slash rent payments by 25% across 109 other hotels.
The deal - known as a company voluntary arrangement (CVA) - was voted through by the chain's creditors, despite them having to take a significant financial hit as a result.
The arrangement will see the company offload 49 of its poorer-performing hotels to other operators, and slash rent payments by 25% across 109 other hotels.
The deal - known as a company voluntary arrangement (CVA) - was voted through by the chain's creditors, despite them having to take a significant financial hit as a result.
MENA stock markets close - September 4, 2012
| Exchange | Status | Index | Change | ||||
 | TASI (Saudi Stock Market) | 7050.34 | -0.40% | ||||
 | DFM (Dubai Financial Market) | 1554.11 | 0.42% | ||||
| ADX (Abudhabi Securities Exchange) | 2552.36 | -0.17% | ||||
 | KSE (Kuwait Stock Exchange) | 5891.64 | -0.29% | ||||
 | BSE (Bahrain Stock Exchange) | 1070.55 | -0.17% | ||||
 | MSM (Muscat Securities Market) | 5533.64 | 0.19% | ||||
 | QE (Qatar Exchange) | 8469.93 | 0.09% | ||||
 | LSE (Beirut Stock Exchange) | 1127.95 | 0.09% | ||||
 | EGX 30 (Egypt Exchange) | 5541.46 | 1.49% | ||||
 | ASE (Amman Stock Exchange) | 1914.83 | 0.12% | ||||
 | TUNINDEX (Tunisia Stock Exchange) | 5209.42 | -0.02% | ||||
 | CB (Casablanca Stock Exchange) | 9900.91 | -0.54% | ||||
 | PSE (Palestine Securities Exchange) | 428.98 | -0.04% | ||||
Saudi Arabia May Become Oil Importer by 2030, Citigroup Says - Businessweek
Saudi Arabia, the world’s biggest crude exporter, risks becoming an oil importer in the next 20 years, according to Citigroup Inc.
Oil and its derivatives are used for about half of the kingdom’s electricity production, which at peak rates is growing at about 8 percent a year, the bank said today in a an e-mailed report. A quarter of the country’s fuel production is used domestically, more per capita than other industrialized nations, as the cost is subsidized, according to the note.
“If Saudi Arabian oil consumption grows in line with peak power demand, the country could be a net oil importer by 2030,” Heidy Rehman, an analyst at the bank, wrote. The country already consumes all its natural-gas production and plans to develop nuclear power, which pose execution risk amid a lack of available experts, safety issues and cost overruns, Rehman said.
Oil and its derivatives are used for about half of the kingdom’s electricity production, which at peak rates is growing at about 8 percent a year, the bank said today in a an e-mailed report. A quarter of the country’s fuel production is used domestically, more per capita than other industrialized nations, as the cost is subsidized, according to the note.
“If Saudi Arabian oil consumption grows in line with peak power demand, the country could be a net oil importer by 2030,” Heidy Rehman, an analyst at the bank, wrote. The country already consumes all its natural-gas production and plans to develop nuclear power, which pose execution risk amid a lack of available experts, safety issues and cost overruns, Rehman said.
Dubai Group sells Turkey insurance arm - Yahoo! News Maktoob
Dubai Group has sold its Turkish insurance arm to a company owned by former AIG chief executive Maurice "Hank" Greenberg and a unit of Dubai lender Mashreq Bank, as the state investment firm looks to cut its debt pile.
Oman Insurance Co, the unit of Mashreq, said on Tuesday it had bought a 51 percent stake in Dubai Group Sigorta, an insurance company based in Istanbul which does non-life insurance business. The remaining 49 percent was acquired by Starr Insurance and Reinsurance Ltd, part of Greenberg's Starr International Co, OIC
said. No financial details of the transaction were provided.
Dubai Group, part of Dubai Holding, the personal investment firm of
Sheikh Mohammed bin Rashid al-Maktoum, was hit hard by the global financial crisis and has seen the value
of most of its holdings decline.
Oman Insurance Co, the unit of Mashreq, said on Tuesday it had bought a 51 percent stake in Dubai Group Sigorta, an insurance company based in Istanbul which does non-life insurance business. The remaining 49 percent was acquired by Starr Insurance and Reinsurance Ltd, part of Greenberg's Starr International Co, OIC
said. No financial details of the transaction were provided.
Dubai Group, part of Dubai Holding, the personal investment firm of
Sheikh Mohammed bin Rashid al-Maktoum, was hit hard by the global financial crisis and has seen the value
of most of its holdings decline.
STOCKS NEWS MIDEAST-UAE mkts end mixed, Qatar flat in thin trade - Yahoo! News Maktoob
UAE bourses end mixed and Qatar's indexcloses near-flat in range-bound trading, with investors finding little reason to increase positions due to a lack of catalysts. Dubai's benchmark climbs 0.4 percent to close at
1,554 points, trading within a 14-point range over the last six sessions.
UAE and Qatar's markets are trapped in sideways trading on low volumes. Some investors are holding their positions, waiting for a catalyst to lift stocks, while some retail traders are speculating for short-term gains.
"Everyone regionally is positioned or is positioning for being long in these markets (but) investors need to be
reasonably convinced it's a good investment story," says Ibrahim Masood, senior investment officer at Mashreq bank. "I don't think there is a room to be tactical and reduce positions to buy back later."
1,554 points, trading within a 14-point range over the last six sessions.
UAE and Qatar's markets are trapped in sideways trading on low volumes. Some investors are holding their positions, waiting for a catalyst to lift stocks, while some retail traders are speculating for short-term gains.
"Everyone regionally is positioned or is positioning for being long in these markets (but) investors need to be
reasonably convinced it's a good investment story," says Ibrahim Masood, senior investment officer at Mashreq bank. "I don't think there is a room to be tactical and reduce positions to buy back later."
TEXT-S&P affirms Mubadala Development Co. 'AA/A-1+' rtgs; otlk stble - Yahoo! News Maktoob
Rationale
The ratings on Mubadala, the Abu Dhabi government's principal agent for diversifying the local economy away from hydrocarbon revenues, are based on an equalization with the ratings on the Emirate of Abu Dhabi (AA/Stable/A-1+).
This reflects Standard & Poor's view of an "almost certain" likelihood of extraordinary government support for Mubadala in the event of financial distress.
The ratings on Mubadala, the Abu Dhabi government's principal agent for diversifying the local economy away from hydrocarbon revenues, are based on an equalization with the ratings on the Emirate of Abu Dhabi (AA/Stable/A-1+).
This reflects Standard & Poor's view of an "almost certain" likelihood of extraordinary government support for Mubadala in the event of financial distress.
Citi: how to invest in petrostates | beyondbrics
Petrostates are often authoritarian, oil dependent, with indulged elites, and have low market liquidity. Want to invest?
Perhaps you should. According to a Citi research note, from equity analysts led by Kingsmill Bond, money is flowing into petrostates at a rate of nearly $2tn a year - “greater in real terms than they saw at the peak of the last oil boom”, prompting the question: Is this “the greatest peacetime transfer of wealth in history?”
Citi’s analysts identify a bunch of petrostates, many in the Middle East and Africa, and then whittle it down to eight investable ones on the basis of market liquidity: Russia, Saudi Arabia, Norway, Kazakhstan, Qatar, Kuwait, the UAE, and Nigeria. Only Norway is a developed market.
Perhaps you should. According to a Citi research note, from equity analysts led by Kingsmill Bond, money is flowing into petrostates at a rate of nearly $2tn a year - “greater in real terms than they saw at the peak of the last oil boom”, prompting the question: Is this “the greatest peacetime transfer of wealth in history?”
Citi’s analysts identify a bunch of petrostates, many in the Middle East and Africa, and then whittle it down to eight investable ones on the basis of market liquidity: Russia, Saudi Arabia, Norway, Kazakhstan, Qatar, Kuwait, the UAE, and Nigeria. Only Norway is a developed market.
Egypt share index climbs to 14-month high - Yahoo! News Maktoob
Egypt's benchmark share index rose 1.7 percent on Tuesday to its highest since June 2011 after a U.S. official said Washington was close to a deal with Egypt for $1 billion in debt relief.
U.S. diplomats and negotiators for Egypt's new Islamist President Mohamed Mursi, who took office in June after the country's first free presidential election, were working to finalize an agreement, the official said.
The index was at 5,552.67 points at 0837 GMT. It has surged 36 percent as Mursi emerged as winner of the election and his new government stepped up efforts to secure aid from foreign donors to shore up an ailing economy.
U.S. diplomats and negotiators for Egypt's new Islamist President Mohamed Mursi, who took office in June after the country's first free presidential election, were working to finalize an agreement, the official said.
The index was at 5,552.67 points at 0837 GMT. It has surged 36 percent as Mursi emerged as winner of the election and his new government stepped up efforts to secure aid from foreign donors to shore up an ailing economy.
Dubai's Limitless to sign $1.2 bln debt deal in Sept - paper | Reuters
Limitless, the indebted property arm of Dubai World, will seal a final deal with creditors in September to restructure its $1.2 billion debt pile, the chairman of state property firm Nakheel told a local newspaper on Tuesday.
"The company got the approval of all lending banks on the restructuring terms and no objection was received from any bank," Ali Rashid Lootah told Al-Ittihad newspaper.
Nakheel and Limitless, which were earlier property arms of Dubai World, are now moved under the control of Dubai government.
"The company got the approval of all lending banks on the restructuring terms and no objection was received from any bank," Ali Rashid Lootah told Al-Ittihad newspaper.
Nakheel and Limitless, which were earlier property arms of Dubai World, are now moved under the control of Dubai government.
POLL-UAE business activity almost flat in August - Yahoo! News Maktoob
Business activity in the United Arab Emirates' non-oil private sector was almost flat in August from the previous month, but growth of new orders climbed to a three-month high, a purchasing managers' survey showed on
Tuesday.
The HSBC UAE Purchasing Managers' Index, which measures the performance of the manufacturing and services sectors, fell marginally to 53.3 points last month from 53.4 in July. The adjusted index is above the
50-point mark which separates growth from contraction, the survey of 400 private sector firms showed.
"It's a very solid number compared with much of the world, and what's particularly encouraging is the bounce in the new export orders index, after a somewhat worrying drop in July," said Liz Martin, senior economist for the Middle East and North Africa at HSBC.
Tuesday.
The HSBC UAE Purchasing Managers' Index, which measures the performance of the manufacturing and services sectors, fell marginally to 53.3 points last month from 53.4 in July. The adjusted index is above the
50-point mark which separates growth from contraction, the survey of 400 private sector firms showed.
"It's a very solid number compared with much of the world, and what's particularly encouraging is the bounce in the new export orders index, after a somewhat worrying drop in July," said Liz Martin, senior economist for the Middle East and North Africa at HSBC.
Bahrain set to receive GCC aid
Bahrain is set to receive the first tranche of a GCC development package aimed at helping boost vital housing, roads, electricity, water, industrial and social development projects.
The money - Kuwait's share of a $10 billion total grant - will be sent in batches of $250 million per year.
It signals the first practical step towards implementation of the GCC Development Programme, ratified by the GCC leaders.
The money - Kuwait's share of a $10 billion total grant - will be sent in batches of $250 million per year.
It signals the first practical step towards implementation of the GCC Development Programme, ratified by the GCC leaders.
icLiverpool - Travelodge rescue deal goes to vote
Budget hotel chain Travelodge is fighting to secure its future as it asks landlords to back a vital rescue deal.
Creditors - including a raft of landlords across the UK - will vote on a plan that will see rent payments slashed across more than 100 hotels.
The group, which operates more than 500 hotels across the UK, Ireland and Spain and employs more than 6,000 staff, is proposing a plan to offload 49 hotels to other operators, while the landlords of a further 109 are being asked to accept a 25% cut in rent. The remaining 347 will be unaffected.
Creditors - including a raft of landlords across the UK - will vote on a plan that will see rent payments slashed across more than 100 hotels.
The group, which operates more than 500 hotels across the UK, Ireland and Spain and employs more than 6,000 staff, is proposing a plan to offload 49 hotels to other operators, while the landlords of a further 109 are being asked to accept a 25% cut in rent. The remaining 347 will be unaffected.
GCC Bond Yields Drop a Third Month on Scarcity | GulfNews.com
Gulf Islamic bond yields fell for a third month as a scarcity of sukuk and Europe’s debt crisis prompted local investors to favour the oil-rich region.
Average yields on sukuk from the six-nation Gulf Cooperation Council slid 20 basis points, or 0.2 percentage points, last month to 3.18 per cent August 31, according to the HSBC/Nasdaq Dubai GCC US Dollar Sukuk Index. That compares with a nine basis-point drop to 4.74 per cent for emerging market bonds, according the JPMorgan Chase & Co’s EMBI Global Diversified Blended Yield index. Ten-year US Treasuries yielded 1.55 per cent on August 31.
Economic growth in the GCC, home to about half of the world’s proven oil reserves, will reach 5.3 per cent this year compared with a contraction of 0.3 per cent in the 17-country euro area, the International Monetary Fund forecasts. The Islamic finance industry is set to expand to $2.8 trillion (Dh10.2 trillion) by 2015, according to the Kuala Lumpur-based Islamic Financial Services Board. Gulf sukuk have also benefited from appetite for higher-yielding assets, according to Union Investment Privatfonds.
Average yields on sukuk from the six-nation Gulf Cooperation Council slid 20 basis points, or 0.2 percentage points, last month to 3.18 per cent August 31, according to the HSBC/Nasdaq Dubai GCC US Dollar Sukuk Index. That compares with a nine basis-point drop to 4.74 per cent for emerging market bonds, according the JPMorgan Chase & Co’s EMBI Global Diversified Blended Yield index. Ten-year US Treasuries yielded 1.55 per cent on August 31.
Economic growth in the GCC, home to about half of the world’s proven oil reserves, will reach 5.3 per cent this year compared with a contraction of 0.3 per cent in the 17-country euro area, the International Monetary Fund forecasts. The Islamic finance industry is set to expand to $2.8 trillion (Dh10.2 trillion) by 2015, according to the Kuala Lumpur-based Islamic Financial Services Board. Gulf sukuk have also benefited from appetite for higher-yielding assets, according to Union Investment Privatfonds.
Egyptian banks find favour with investors - The National
Egyptian equities closed at the highest level all year as the country’s foreign currency reserves rose and investors bet on the country’s banks. The EGX30 Index of Egyptian equities rose 0.6 per cent to 5,459.92.
The market measure has gained 50.6 per cent since the start of the year, making Egypt the world’s second-best performing stock market after Venezuela.
Lenders led the gains, with National Société Générale Bank, the Egyptian unit of France’s second-biggest bank, rising 10 per cent to 38.24 Egyptian pounds each, having risen by the same amount on Sunday following the announcement of takeover talks with Qatar National Bank.
The market measure has gained 50.6 per cent since the start of the year, making Egypt the world’s second-best performing stock market after Venezuela.
Lenders led the gains, with National Société Générale Bank, the Egyptian unit of France’s second-biggest bank, rising 10 per cent to 38.24 Egyptian pounds each, having risen by the same amount on Sunday following the announcement of takeover talks with Qatar National Bank.
Production resumes at Libya's largest refinery - The National
Libya's largest refinery has restarted for the first time since the fall of Qaddafi after delays stemming from a dispute between the national oil company and its UAE-based partner.
Trasta, the energy arm of Dubai's Al Ghurair Group, owns half the Ras Lanuf refinery alongside Libya's National Oil Corporation (NOC), a share it secured in 2009 in exchange for agreeing to lead a US$2 billion (Dh7.34bn) upgrade of the plant.
The refinery, which accounts for nearly two thirds of Libya's refining capacity with 220,000 barrels per day, resumed operations on Friday after lying dormant since February last year, the beginning of the uprising against Muammar Qaddafi.
Trasta, the energy arm of Dubai's Al Ghurair Group, owns half the Ras Lanuf refinery alongside Libya's National Oil Corporation (NOC), a share it secured in 2009 in exchange for agreeing to lead a US$2 billion (Dh7.34bn) upgrade of the plant.
The refinery, which accounts for nearly two thirds of Libya's refining capacity with 220,000 barrels per day, resumed operations on Friday after lying dormant since February last year, the beginning of the uprising against Muammar Qaddafi.
Saudi home lending rises at a rapid rate - The National
Saudi home lending is growing at its fastest pace in four years as the government pumps US$67 billion (Dh246.08bn) into the construction of 500,000 new homes across the kingdom.
Property financing soared 83 per cent to about 48bn riyals (Dh47.01bn) during the second quarter, compared with a year earlier, according to central bank data.
The housing market has emerged as a big beneficiary of a massive infrastructure programme aimed at reducing unemployment in Saudi Arabia, where about 40 per cent of 16 to 24-year-olds do not have a job.
Property financing soared 83 per cent to about 48bn riyals (Dh47.01bn) during the second quarter, compared with a year earlier, according to central bank data.
The housing market has emerged as a big beneficiary of a massive infrastructure programme aimed at reducing unemployment in Saudi Arabia, where about 40 per cent of 16 to 24-year-olds do not have a job.
Al Baraka revives debut sukuk on record-low yields | GulfNews.com
Nine months after cancelling its debut sale of Islamic bonds because yields were too high, Al Baraka Banking Group’s Turkish unit is back approaching investors as borrowing costs tumble to record lows.
Al Baraka Turk Katilim Bankasi AS will offer as much as $250 million (Dh917 million) of seven-year dollar-denominated sukuks this year, the group’s Chief Executive Officer Adnan Yousuf said by phone on August 27 from Alexandria, Egypt. The average sukuk yield globally has fallen 91 basis points this year to an all-time low of 3.09 per cent, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index. The premium to own Islamic debt rather than US Treasuries has narrowed 81 basis points to 204.
Al Baraka Turk Katilim Bankasi AS will offer as much as $250 million (Dh917 million) of seven-year dollar-denominated sukuks this year, the group’s Chief Executive Officer Adnan Yousuf said by phone on August 27 from Alexandria, Egypt. The average sukuk yield globally has fallen 91 basis points this year to an all-time low of 3.09 per cent, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index. The premium to own Islamic debt rather than US Treasuries has narrowed 81 basis points to 204.
UAE businesses fast-track plans for Saudi presence | GulfNews.com
For UAE and GCC business houses all roads are currently leading to Saudi Arabia as they bid to pursue the many untapped opportunities in the Gulf’s largest economy. It is a process that will speed up further with the gradual easing up of licensing requirements and the kingdom’s stated intention to bring in more overseas investments.
This means GCC businesses will not feel under pressure to go in with a Saudi partner if they decide that is not the best option.
“Saudi authorities have been emphasising that a GCC-owned venture will be treated on par with a local company and that’s an ideal situation for a regional business,” said Peter Walichnowski, CEO at Majid Al Futtaim (MAF) Properties, who developed Mall of the Emirates and has a wide regional footprint. So far the company has not made an entry into Saudi Arabia, though that could change in the near term, the CEO added.
This means GCC businesses will not feel under pressure to go in with a Saudi partner if they decide that is not the best option.
“Saudi authorities have been emphasising that a GCC-owned venture will be treated on par with a local company and that’s an ideal situation for a regional business,” said Peter Walichnowski, CEO at Majid Al Futtaim (MAF) Properties, who developed Mall of the Emirates and has a wide regional footprint. So far the company has not made an entry into Saudi Arabia, though that could change in the near term, the CEO added.
HSBC, BNP Paribas Said to Extend Profit-Sharing Loan to Drydocks - Bloomberg
HSBC Holdings Plc (HSBA) and BNP Paribas SA (BNP) are among banks extending a $1.5 billion so-called profit participating loan to Dubai-based Drydocks World LLC as it restructures debt, a person with knowledge of the talks said.
The 15-year loan, part of $2.25 billion for the Middle East’s biggest shipyard, will pay creditors profit or cash from asset sales, said the person, who asked not to be identified because details haven’t been made public. Dubai World-controlled Drydocks also agreed on a new $800 million five-year term loan paying a market interest rate, the person said.
The 15-year loan, part of $2.25 billion for the Middle East’s biggest shipyard, will pay creditors profit or cash from asset sales, said the person, who asked not to be identified because details haven’t been made public. Dubai World-controlled Drydocks also agreed on a new $800 million five-year term loan paying a market interest rate, the person said.
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