Energy firm IPIC eyes takeover of Aabar

Abu Dhabi state-owned investment company seeks control via convertible bonds. 
Energy firm IPIC eyes takeover of Aabar
By Simon Webb
Mon 01 Sep 2008 11:48 PM

Abu Dhabi government-owned IPIC said on Monday it planned to take a majority stake in Aabar Investments to help the firm invest in sectors across the region, including in energy.

International Petroleum Investment Co (IPIC) said in a statement it would buy 6.684 billion dirhams ($1.82 billion) worth of convertible bonds.

IPIC is rapidly expanding in the international oil and gas sectors. The company invests in oil and gas related assets for the Abu Dhabi government, which controls more than 90 percent of the oil reserves in the United Arab Emirates, the world's fifth-largest oil exporter.

"We offer Aabar a pipeline of global investment opportunities," said Khadem Al-Qubaisi, IPIC's managing director.

The bonds it buys would be convertible into 2.23 billion ordinary shares in Aabar at a conversion price of 3 dirhams per share.

The bonds would pay a floating rate coupon of three months Emirates Interbank Offered Rate plus 1.95 percent per annum, to be payable quarterly in arrears, IPIC said, adding that the maturity date would be November 30, 2009.

The bond is convertible by IPIC at any time and upon conversion would give IPIC a majority ownership in Aabar, IPIC said.

"Upon consummation of the transaction, Aabar will have amassed over 8.9 billion dirhams of investible assets," IPIC said.

The deal was still subject to regulatory approval.

Aabar is partly owned by the Abu Dhabi government but allows foreigners to hold up to 40 percent of its stock.

The company said in May its chief executive officer had resigned to join Mubadala Development Co, after the Abu Dhabi investment arm bought 90 percent of Aabar's Pearl Energy unit, generating an estimated profit of $100 million.

That month, it also said that part of the proceeds from the sale of Pearl would go toward the early redemption in full of its sukuk, or Islamic bond, certificates while the rest would fund new investments. (Reuters)

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