'Acquisitions in 2011, definitely India is a big possibility,' CEO Khaldoun Tabari says
Dubai contractor Drake & Scull
International is prepared to take on debt to make a
substantial acquisition as it eyes strategic purchases, possibly
in India, its chief executive said on Tuesday.
"We are still very liquid," Drake & Scull CEO Khaldoun
Tabari told reporters on the sidelines of a conference, adding
the company was interested in acquisitions in India and had AED500m ($136m) in cash.
"Acquisitions in 2011, definitely India is a big
Asked about the possibility of issuing debt to pay for a big
acquisition, Tabari said: "Very possible (to tap bond market) if
there's an acquisition of substantial value. The market is very
ripe for that."
Shares in Drake were down slightly by 0.4 percent at 0805
Drake, which specialises in mechanical, engineering and
plumbing businesses (MEP), has been rapidly expanding its
operations outside Dubai, where house prices have plunged some
60 percent since their peaks in 2008 as a result of the
Drake & Scull reported a sharp 45 percent drop in quarterly
profit this week, below expectations, triggering a share
Tabari said Drake's order book would expand in the last
three months of 2010.
"The backlog by the end of third quarter is AED4.9bn. We expect the backlog by the end of the year to have
substantially more than what we have today," Tabari said.
On Monday, Tabari had projected an additional AED1bn
worth of new projects to be added to the book.
But Tabari also warned that unless home buyer financing
became more available, housing prices in the UAE could see a
further decline, and that Abu Dhabi and Saudi Arabia will
generate the majority of the new projects.
Tabari said that Drake would likely announce a second
acquisition of a Saudi business within a week, following its
agreement to buy 65 percent of 'Drake & Skull International
Saudi WLL' for AED243m.
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