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Tue 11 Jan 2011 10:38 AM

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Arabtec plans rights issue, bond sale to raise $150m

UAE’s largest builder plans to sell 398.67 million shares to existing shareholders

Arabtec plans rights issue, bond sale to raise $150m
Riad Kamal, the CEO of Arabtec Holding. The company plans to raise $150m through a bond sale

Arabtec
Holding, the UAE’s largest builder by market value, on Tuesday said it plans a
rights issue and to raise $150m through the sale of five-year convertible bonds.

The
company plans to sell 398.67 million shares to existing shareholders at one
dirham a share, it said in a statement to the Dubai bourse.

Investors
will be offered a new share for every three they hold, it said.

Arabtec will use
the funding to “support the company’s expansion plans to the new markets and
increase its working capital,” it said.

Arabtec,
which is bidding for $8.17bn of work outside its local markets, reported a 96
percent decline in third quarter net profit to $1.85m, hit by project
cancellations in the Dubai market.

Half
of all real estate projects in Dubai were cancelled in the wake of the
financial crisis, the government has said, forcing local construction firms to diversify
into new markets. 

Riad Kamal, the CEO of Arabtec Holding, was last week barred from trading in
UAE stocks for six months by the country’s regulator, over trades sold in May
ahead of the announcement of project wins.

 

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