Bahrain Mumtalakat Holdings, a $10 billion state-owned investment agency, plans to sell assets and buy into foreign firms as part of a strategy by the Gulf oil producer to diversify holdings.
Mumtalakat is considering two acquisitions - one in the services sector in North America worth as much as $1 billion, and the other in Asia, Talal Al-Zain, chief executive of Mumtalakat told newswire Reuters in interview at the World Economic Forum (WEF) meeting in Sharm El-Sheikh.
Mumtalakat's assets include Bahrain Aluminium (Alba), Gulf Air and Bahraini telecom Batelco.
The agency, with stakes in 34 companies, plans to reduce its holdings in Bahraini firms in which it has a majority stake, such as Alba, Batelco and National Bank of Bahrain, Al-Zain said.
Options include selling to long-term investors and initial public offerings (IPOs), he said.
"I don't see why we should maintain majority stakes," Al-Zain said. "We should at least be reducing them."
The Bahraini government would be satisfied in many cases with minority stakes of between 20 and 25%, Al-Zain said.
Alba, the Gulf's second-largest aluminium producer, is Mumtalakat's biggest asset, in which the Bahraini government has a 77% stake, he added. Alba's chairman last year said it would sell as much as 40% in an IPO.
Mumtalakat also owns almost 57% of Batelco and 50% of National Bank of Bahrain.
He said sales could take place in the next 12 months with the government hoping to have half its assets outside Bahrain, Al-Zain said.
Bahrain has been planning to sell stakes in some of its leading companies for some time, but has had to restructure loss-making firms and probe corruption claims before being able to approach the market.
The country last year did offer shares in Seef Properties, owner of the island's largest mall, in an IPO.
Loss-making national carrier Gulf Air has said its government owner could sell shares to the public as early as this year. The airline has pledged to operate with minimum state support and said in January it was close to halving its losses.
Overseas, the company is interested in investing in industries including telecommunications, real estate and financial services. Al-Zain declined to give further details about the planned acquisition in North America or the one in Asia.
Mumtalakat, which owns 30% of Formula 1 motor racing team Mclaren, is seeking a rate of return of about 15% a year. (Reuters)For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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