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Mon 28 Jun 2010 11:53 AM

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Arabtec CEO blames media for Aabar’s ‘cold feet’

Riad Kamal says both firms are working to 'achieve intentions of original deal'.

Arabtec CEO blames media for Aabar’s ‘cold feet’
DUBAI DEAL: Riad Kamal said both firms are working to achieve the intention of the original deal. (Getty Images)

The head of Arabtec has blamed the collapse of its deal with Abu Dhabi firm Aabar Investments on press speculation resulting in the owners of the Abu Dhabi firm getting "cold feet".

“There was too much speculation in the press not related to the facts whatsoever. This was a strategic partnership between two entities for good business results,” said Arabtec CEO Riad Kamal during the Arabian Business conference on Monday.

“But the next thing I read in the paper is that the Abu Dhabi government is buying companies to save them from Dubai. Where did that come from? We didn’t want to be saved – we weren’t drowning. I used to sit down and laugh reading this reports.

In April, Arabtec announced that the proposed deal, which would have seen Aabar take a 70 percent stake in the Gulf’s biggest construction and engineering company, had been shelved. The deal was estimated at about $1.7bn.

Kamal explained that the partnership had first been proposed because Aabar saw a strategic interest in gaining a stake in a construction company.

"They couldn’t find anyone better than Arabtec in this field. They [Abu Dhabi} are embarking on a string of construction projects...and they wanted a construction arm to work with,” the Arabtec head said.

Kamal said the deal would have been a good link with the Abu Dhabi government, and would also have offered a replacement for Arabtec’s resources right next door.

“At the end of the day, because of what you [the press] people did, with all the speculation, all of it was being read by the people in charge of the company in Abu Dhabi. They had cold feet and they wanted to set up something that had a different structure.” Kamal added.

But the Arabtec CEO indicated that the two firms were still negotiating over a deal that would be acceptable for both sides.

“We are still talking and probably will find a formula that will achieve the intention of the oritignal deal. It’s not over yet, but we had to declare that the first deal was cancelled," Kamal said

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Marlow McGuinness 9 years ago

RK is basically saying Aabar's due diligence was done by reading the papers. Seems unlikely.

Sam Dubai 9 years ago

All the successes are self-made and all the failiures are caused by outside factors. What happened to responsibility of managers?