Dubai’s Arabtec scraps rights issue plan, wins India contract
DUBAI |
DUBAI (Reuters) – Dubai builder Arabtec, which struggled to collect payments during Dubai’s property bust, has scrapped plans for a rights issue and a $150 million convertible bond, its chief financial officer said on Thursday.
“There is no need for it now,” Ziad Makhzoumi told Reuters.
“One of the advantages of the rights issue and bond was to replace short-term borrowing. But we do not need that now.”
Arabtec said in January that it is considering an issue of 398.67 million shares at 1 dirhams a share to existing shareholders and would sell $150 million worth convertible bonds.
It delayed the plans in March due to unfavourable market conditions.
The builder also benefited from its share of a 4.8 billion dirham ($1.3 billion) Islamic bond given to trade creditors by Nakheel in August, as part of the restructuring of its $16 billion debt. Arabtec was one of the firm’s considered most exposed to Nakheel.
On Thursday, Arabtec said its joint venture company, under formation in India, has received a 750 million dirhams ($204.19 million) contract to build three residential apartments in the country.
“We are definitely looking at more projects in India and our interest is high in that region,” said Makhzoumi.
The projects, to be completed in over four years, have been awarded to its joint venture with Raheja Developers Ltd. It would be located in Gurgaon, Haryana and includes both a high-rise apartment tower and low-rise buildings comprising a total of 1,000 units.
“We believe that the fourth quarter of 2011 is likely to witness a jump in new contracts for regional contractors – for Arabtec this award presents a strong start albeit with Indian help,” Roy Cherry, Shuaa Capital vice-president for research said in a note on the announcement.
The builder reported a 74 percent fall in its second-quarter net profit as general and administrative expenses almost doubled.
($1 = 3.673 UAE Dirhams)
(Reporting by Praveen Menon, Editing by Amran Abocar)
Article source: http://feeds.reuters.com/~r/reuters/INbusinessNews/~3/hM2vDYnEz6s/idINIndia-59740120111006
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