Kuwaiti companies buy Aston Martin

A consortium led by Dave Richards, John Singers, Investment Dar and Adeem Investment acquired the sports car manufacturer Aston Martin, ending almost 20 years as part of Ford Motor Company.

Dave Richards is a former British racing champion and the founder and chairman of Prodrive, a motorsport and automotive engineering company. John Singers is a US banker in finance and shipping. Richards will become the non-executive chairman of Aston Martin at the end of the month.

The US automotive manufacturer Ford Motor announced in August it was looking to spin off the UK-based automaker, whose cars have been made famous by the James Bond movies.

The Aston Martin transaction was valued at $925 million. The terms and conditions of the deal were not disclosed but Investment Dar confirmed they had acquired a slightly over 50% stake worth $464.16 million while Ford will retain a $77 million operating stake in the company. The other three consortium partners will share payment for the remaining $384 million.

"The purchase of Aston Martin is central to our strategy of diversifying our holdings in key markets and international brands," Investment Dar told Oxford Business Group.

Investment Dar said the deal was partly financed by international banks, which agreed to a $393 million sharia-compliant loan.

Investment Dar and Adeem Investment, both sharia-compliant companies, share Efad Holding as a stockholder. Investment Dar, with assets of $3.66 billion, is one of the largest investment firms in the region, with interests in a variety of sectors, including banking, real estate and logistics. Adeem Investment, with assets worth $1.5 billion in the hotel, transport and telecom industries, is one of the fastest growing finance companies in Kuwait.

The new owners, who have promised long-term support of Aston Martin, said they expect the 1800-strong workforce at Aston-Martin's UK plant will grow by 200 within the next few years.

Ford has been struggling recently, with registered losses of $12.7 billion in 2006 and an operating deficit estimated at $17 billion until at least 2009. Ford owns a number of luxury brands in addition to Aston Martin, including Jaguar and Land Rover but those units have not made a profit since 2003. Aston Martin was thee only one to turn a profit in the past several years.

The purchase of Aston Martin underlines the growing global clout of Kuwaiti investors. With the second highest capitalisation in the region and one of the largest equity markets in the Gulf Cooperation Council, Kuwait's private investment companies are well placed to expand their already lengthy reach. Furthermore, with the price of crude oil remaining high, both local and regional companies have had continued access to additional capital.

Although 2006 was a difficult year for the financial sector, there was a noticeable increase in the number of Kuwaiti firms providing specialised capital market services. For example, National Bank of Kuwait, the country's largest bank, recently launched NBK Capital in order to strengthen their position in the investment and equity markets. Meanwhile, the Kuwait Investment Authority (KIA), which is estimated to control over $250 billion worth of assets, recently bought Istanbul's Cevahir shopping centre for a reported $750 million and confirmed a 10% stake in the Industrial & Commercial Bank of China.

(C) Oxford Business Group - www.oxfordbusinessgroup.com

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