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Tue 3 Apr 2012 04:56 PM

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Abu Dhabi's Aabar doubles Arabtec stake to 10.45%

Latest investment makes Aabar largest shareholder in Dubai builder

Abu Dhabi's Aabar doubles Arabtec stake to 10.45%
Latest investment makes Aabar largest shareholder in Dubai builder.

Abu Dhabi's state-owned fund Aabar Investments has nearly doubled its stake in Arabtec to 10.45 percent, a bourse filing showed on Tuesday, making it the largest shareholder in the Dubai builder and boosting its influence.

Sovereign fund Aabar, which owns stakes in high-profile names such as German carmaker Daimler, commodities trader Glencore and Italy's UniCredit, raised its Arabtec stake to 10.45 percent just weeks after it boosted its holding to 5.3 percent in early March.

Shares in Arabtec - which Aabar unsuccessfully tried to buy two years ago in a US$1.7bn deal for a 70-percent stake -- jumped 13.3 percent on the Dubai bourse. The stock is up 89 percent year-to-date.

The latest stake increase was made through unit, Aabar Real Estate, the filing showed.

"Aabar as the largest shareholder in the company could try to influence the management of the company and for the coming board meetings. It may try to materialize this increased stake in the shareholder structure," said Sebastien Henin, portfolio manager at The National Investor in Abu Dhabi.

"Now, there is speculation that they could increase their stake further," Henin added.

Last month, Arabtec's CFO said the firm had no plans to renew talks with Aabar about taking a stake because its funding needs had eased.

Arabtec, the largest builder in the UAE by market value, saw a three-fold rise in fourth-quarter net profit last month.

Recently, the firm was awarded a US$153m contract for the expansion of the Dubai International Airport and also won three contracts in neighbouring Abu Dhabi for AED256m.

Arabtec has a joint venture in Saudi Arabia with the Saudi Binladin Group and Prime International Group Services. Of its current backlog of AED14bn (US$3.8bn), AED5.5bn is in Saudi Arabia.

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