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Sun 24 Apr 2016 12:07 PM

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Dubai’s DIC puts $1.7bn engineering firm up for auction - report

One of Britain’s oldest engineering manufacturers, Doncasters suffered sharp downturn

Dubai’s DIC puts $1.7bn engineering firm up for auction - report
Image for illustrative purpose only - Getty Images.

Dubai International Capital (DIC) has placed Doncasters, one of Britain’s oldest engineering manufacturers, up for auction, according to a report in UK media.

DIC, the private equity arm of Dubai Holding, had announced plans to sell Doncasters, a British-based engineering aerospace group, back in 2014. An attempted management buyout of the firm failed to materialise when financial sponsors Goldman Sachs, Carlyle and Blackstone sought to renegotiate the deal after seeing a sharp downturn in its business.

The UK’s Telegraph newspaper reports that sales dropped by over 6 percent last year to $918 million (£637.4m), while earnings before interest, taxes, depreciation and amortisation fell by 12 percent to $172 million (£119.7m).

Doncasters, which makes specialised parts for aeroplane engines and industrial gas turbines, saw its sales severely impacted by the drop in oil price, as customers looked to reduce investments in new machinery.

The planned sale of Doncasters was first mooted in October 2014, as the DIC looked to generate cash to cover its outstanding debt well ahead of scheduled repayments.

DIC rose to prominence in the mid-2000s as it took stakes in global brands including Daimler and Sony, and at one point was heavily linked with a takeover of one of England's biggest football clubs, Liverpool FC.

However, DIC fell prone to a heavy debt load taken on to finance many of its deals, forcing it into a $2.5 billion restructuring which it completed in April 2012.

Since then, DIC has offloaded German packaging company Mauser (for a total consideration of $1.72 billion), and its 51 percent stake in Ishraq Dubai. In September last year, DIC sold German alumina products maker Almatis to OYAK, Turkey’s largest private pension fund.

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