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Mon 13 Dec 2010 03:06 PM

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Mubadala open to raising stake in GE - COO

Abu Dhabi investment fund is GE's 14th largest shareholder, launched a JV with the US firm in 2009

Mubadala open to raising stake in GE - COO
GE CEO Jeffrey Immelt. Mubadala is the firms 14th largest shareholder, and is eyeing a larger stake
Mubadala open to raising stake in GE - COO
FINANCING DEALS: Mubadala GE Capital has committed $2bn financing over 45 deals in its first year of operations (Bloomberg Images)

Abu Dhabi investment fund Mubadala is open to raising its stake in General Electric (GE)  and expects to close a joint infrastructure fund with the US firm worth $500m in 2011, its chief operating officer said.

The Abu Dhabi investment fund is the 14th largest shareholder in GE with 76.92 million shares, or 0.2 percent of the total.

"It is a solid investment and if market conditions allow Mubadala could raise its stake in GE," Waleed al-Muhairy told reporters.

The infrastructure fund between Mubadala, GE and Credit Suisse invested $300m in its first closing a few months ago, and expects to increase it to $500m in 2011, he said.

GE plans to sell Islamic bonds or sukuk soon, after it raised $500m in a sukuk last year, Nabil Habayeb, president & CEO, GE Middle East & Africa, told reporters.

He declined to give a size or timeframe.

GE unit GE Capital raised $500m in a five-year Islamic bond sale in November.

Mubadala GE Capital reached $2bn in commitments in 45 financing deals across the Middle East and Africa in its first full year of operations, its chief executive officer said.

A 50:50 joint venture between General Electric and Mubadala, the company offers commercial lending, leasing and equity finance in sectors including oil and gas, aviation and healthcare. 

 “We see significant future demand of commercial financing opportunities – initially here in the UAE, our home market, then across the Gulf and wider Middle East and Africa region,” Ron Herman, chief executive officer, Mubadala GE Capital, said in an emailed statement.

The firm began operations in 2009 with an equity capital of $8bn, divided between GE Capital and Mubadala.

A Reuters report said that the firm had recently completed a deal to acquire finance for an oil and gas company in the UAE, while it planned to close an aircraft financing deal for an Abu Dhabi-based company within two weeks.

“Throughout the region, there is a good market for financing. And leasing penetration is a fraction here of what it is in Europe and elsewhere,” Herman told the newswire.


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