Abu Dhabi's Aabar eyes bond issue

BOND ISSUE: Abu Dhabi's Aabar Investments is considering a proposal by an Abu Dhabi-based strategic investor to buy convertible bonds in the company. (Getty Images)

Shares in Aabar Investments surged on Thursday after the energy firm said it was considering issuing a convertible bond to an Abu Dhabi-based strategic investor.

Aabar's board would discuss the strategic offer at a meeting on July 7 but any decision was subject to approval from shareholders at an extraordinary shareholders' meeting, it said in a statement on the bourse website. Aabar's Abu Dhabi-listed shares were up 9.78 percent at 08:40 am GMT.

Aabar did not name the potential investor or give the size of the proposed offer. A spokesman was not immediately available to comment. "Aabar is sitting on a lot of cash. We haven't seen Aabar do anything with their cash," Amr Diab at EFG-Hermes told Reuters.

Abaar is partly owned by the Abu Dhabi government. It sold the the $460 million of four-year Islamic bonds in 2006. Abaar allows foreigners to hold as much as 40 percent if its stock. Aabar said in May its chief executive officer had resigned to join Mubadala Development Co, after the state-owned company bought 90 percent of Aabar's Pearl Energy unit, generating an estimated profit of $100 million.

Abaar said in May that part of the proceeds from the sale of Pearl would go toward the early redepmtion in full of its sukuk certificates while the rest would be used as funds towards new investment opportunities. Aabar said separately on Thursday that it had fully redeemed $460 million worth of debt maturing in 2010.

It sold its oil rigs unit Dalma Energy to GulfCap Group, owned by investors from Saudi Arabia, Bahrain and Oman, for $446 million, in July. (Reuters)

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