Islamic Bond

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The sleek silver body, the engine's kitten-like purr and the feeling of pure adrenalin when you turn on the ignition and put the pedal to the metal - all major reasons why Aston Martin is viewed as one of the biggest prizes in the automobile industry by car enthusiasts and businessmen and women alike. Its number one fan, of course, is fictional, and despite leaving the DB9 behind for a Ford in the last Bond film Casino Royale, 007 still managed to drive one away after overcoming the odds and defeating the opposition, a tale not dissimilar to that of the real life story that has unfolded over the past two weeks.

On March 12 a consortium, led by flamboyant ex-Benetton and BAR racing boss David Richards, acquired the 94 year-old Warwickshire carmaker from Ford for a whopping US$925m. More interestingly, the major financiers behind the deal wheel were two top Kuwaiti businessmen, Adnan Al Musallam, chairman of The Investment Dar (TID) and Mustafa Al Saleh, managing director and CEO of Adeem Investment.

Musallam stands proudly in front of his newly polished purchase at Aston Martin HQ in Gaydon, of which Investment Dar now owns 50%. What you might not know is that this is TID's and Adeem's second recent UK purchase after buying the luxury Grosvenor House apartments in London. And if you hadn't heard of them before, you have now. "I'm thrilled with the purchase and we will now look for further opportunities," says Musallam ominously eyeing up other investments.

The business is also looking at further UK assets and has its chairman and deputy CEO Amr Abu El Seoud, flying out almost once a week to meet the Aston Martin management team and to spot further opportunities in the "business capital of the world", as El Seoud calls it. There is even talk of the business buying Harrods, something El Seoud refuses to rule out.

"As long as the acquisition in question comes under Sharia-compliant law then we are ruling nothing out". TID, Arabian Business's investment company of the year at the Kuwait Awards 2007, has US$15bn under management (currently invested) in a range of businesses including the Bahrain Islamic Bank, has over US$1bn in shareholder equity and total assets of US$3.6bn. The company carries out all its transactions under Sharia-compliant law.

El Seoud says that TID had been linked with several businesses around the world but that it was "focusing on UK assets", particularly in the financial services space.

"Anything that is investment orientated we will look at. We don't buy assets for short-term gain, we buy them for wise investments and as long as it does not conflict with Sharia law then we will look at it seriously. Nothing is ruled out," he said.

"We like UK assets. It is one of the safest places to do business and is the financial capital of the world."

Musallam was the lynchpin in the Aston deal and is one of a growing list of regional ‘behind the scenes' players showing the rest of the planet that the Arab world is one of the most powerful investment forces on earth. In fact TID is the largest listed investment company in the Gulf owning and managing a range of companies in banking, finance, investment and asset management, real estate, insurance, banking, and logistics. TID has assets under management worth US$15bn, total assets of US$3.6bn, a net income of US$317.3m in 2006, while Adeem has assets under management in excess of US$1.5bn. Put that twin investment power into the perspective of Aston Martin and it is by far the best thing to ever happen to the business during its long history. Put that into a bigger picture and you have some serious financial muscle.

TID itself achieved a net profit of 14% last years and has done so for 11 consecutive years. It also purchased 30% of Bahrain Islamic Bank in 2005 for US$85m followed by an increase in its shares to 40% in 2006, another step towards Investment Dar's goal of adding a commercial Islamic bank to its portfolio. BIB is the first Islamic bank that was incorporated in Bahrain, with 26 years of experience to its credit, state-of-the-art operations and a worldwide customer-base. TID is planning to increase its ownership to a controlling stake of more than 50% by acquiring shares from the second-largest shareholder, with negotiations currently under way, followed by moving the majority of the TID's 90,000 clients to the Bahrani bank. Investment Dar also has a 12.5% holding in Al-Sham Bank, the first Islamic bank in Damascus in Syria.Aston has exchanged hands more times than most used cars in an London East End showroom and was put up for sale by previous 20-year owners Ford way back in August 2006, but this doesn't seem to have put off its new Kuwaiti owners - and no wonder. Alongside TID's majority shareholding, Adeem and other undisclosed US, British and Kuwaiti parties possess 28.5%, car giant Ford still maintains 15% of Aston shares, while Richards and Sinder own the remaining 9%.

If the financial picture looks rosy, just look at the personnel. Richards becomes non-executive chairman of the consortium, which was brought together by former Houston investment banker and Aston Martin enthusiast John Sinders, who thought about buying the company himself when it went on sale last year. On top of these two car and finance experts Musallam has managed to keep hold of Aston Martin's renowned CEO (see page 38), the phenomenon that is Dr Ulrich Bez. He says he is "more confident than ever" with the new owners taking control.

Musallam says there will be "no changes to the direction of the company or the model plans" and that the brand will be more "leveraged" than ever before. Volume will still be controlled, but margins need to be increased in order to drive quality into the brand.

The company also has two new models in the pipeline, the DBS and the Rapide four-door, the new owners want more capacity on land attached to the Warwickshire site, and bought-in engines and transmissions to replace Ford's units could happen.

Investment Dar knows it has saved the company but can it turn it into a largely profitable enterprise?

With the power sharing of the company now more balanced, the long-term investment commitment and the backing of the mega-rich Kuwaiti government and experience of Sinders, Richards and Dr Bez in place, TID may have at last found the right mix to fuel Aston Martin's long-term success - something that has escaped so many over the past 100 years.

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