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Wed 8 Dec 2004 04:00 AM

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Gulf Investment Corp to acquire 25% of Jeddah Cable

Investment firm signs deal to purchase a 25% stake in Saudi electrical cable manufacturer

Gulf Investment Corp (GIC), an investment firm equally owned by six gulf Arab states, has signed a deal to purchase a 25% stake in Saudi electrical cable manufacturer Jeddah Cable Company.

Following the deal signed earlier this week, GIC expects returns of 15% a year, and shareholder equity in Jeddah Cable to reach US$55 million, GIC’s chief executive officer Hisham al-Razzuqi says.

“This investment will give the corporation (GIC) a chance to enter the field of electrical cable industries ... which is considered an investment opportunity with excellent returns that are expected to grow given the growth in demand (for cables),” Razzuqi says. The deal reportedly covers the purchase of 25% of Jeddah Cable’s capital.

Last month, GIC issued a US$500-million five-year floating-rate Euro note, a first tranche in a US$1-billion programme aimed at broadening its investments base, including financial investments and development projects.

Razzuqi says regional demand for electrical cables will continue to grow due to the various planned projects in the region and its surrounding areas.

Jeddah Cable Company founded in 1988 as a subsidiary of Saudi-based Elsewedy Group International, is one of the most prominent cable makers in the regional market and is currently implementing a new strategy to expand and revamp on the back of strong corporate earnings throughout the last fiscal year, Razouqi adds.

GIC was set up in 1983 and has a capital of US$2 billion and assets of US$6.8 billion. It was established by Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates, which comprise the loose political and economic alliance known as the Gulf Cooperation Council.

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