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Investment Banking
CAPITAL ADVANTAGEGCC markets round-up | May 2014
Connecting you with the right opportunities
Initial Public OfferingsnEmirates REIT (CEIC) admitted to
NASDAQ DubainAble Logistics picks SHUAA as lead
managernJafza platform for NASDAQ Dubai listingsFinancial ServicesnBarclays to sell UAE retail ops to ADIBnQIB in talks to take stake in Bank AsyaReal Estate & ConstructionnDubai Investments’ Maritime City project
Debt MarketsnDubai World hires Blackstone on debt
optionsnDAMAC lists $650m Sukuk on
NASDAQ DubainNBAD Kangaroo bond raises AUD 400mnWaha Capital secures $750m credit facilitynADIB arranges financing for IMG
Worlds of Adventure
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IN THIS ISSUE…
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Oil & GasnGIS acquire JDC’s 30% stake in GDInDaewoo E&C wins $1.1bn refinery
project in KuwaitLeisure & RetailnGulf Finance House confirms LUFC salenDodsal Group to exit fast food businessnTPG/Abraaj in talks for Saudi
fast-food chainTechnologynBatelco Group acquires 46% stake in
Quality Net
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GCC Healthcare sector poised for growthAlpen Capital’s new research report on the GCC Healthcare Industry includes details on current market trends and challenges faced by the GCC Healthcare sector and the on-going initiatives by GCC authorities to address these issues. The GCC healthcare market is projected to grow at an annual rate of 12.0% to $69.4bn by 2018 from an estimated $39.4bn in 2013. Outpatient and inpatient markets are expected to account for 79% and 21%, respectively, of the overall market. This unprecedented surge in healthcare consumption will be driven by robust population growth and rising income levels. Higher income levels and sedentary life styles have led to poor health conditions, a phenomenon witnessed in most developed economies. Governments, which play the predominant role in healthcare services, are taking steps to ensure continuous development of
2013E
Inpatient Market (USD bn) Outpatient Market (USD bn)
2014E
80706050403020100
Mar
ket S
ize
2016E 2018E
CAGR 12.0%
8.3 9.3 11.7 14.8
31.1 34.943.7
54.6
To receive a copy of the GCC Healthcare Industry Report, email [email protected] or call +971 (0) 4 363 4300.
infrastructure through nurturing management skills, increasing the share of private sector and utilizing IT skills to spread the reach and range of healthcare services.
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ECONOMICS
INITIAL PUBLIC OFFERINGS
Gulf Marine Services’ IPO generates over $600mPrivate equity firm Gulf Capital completed the IPO on the London Stock Exchange of its portfolio company Gulf Marine Services (GMS) on 14 March. The offering valued GMS at GBP 472m ($783m) at the offer price of GBP 1.35/share. Total IPO proceeds were GBP 179m ($296m - after exercise of the over-allotment option). Gulf Capital’s GC Equity Partners II Fund has cut its shareholding from 80% to 49.7%. Gulf Capital reports the fund has generated gross gains in excess of $600m, including its remaining stake (valued at the IPO price).
Emirates REIT (CEIC) admitted to NASDAQ DubaiEmirates REIT (CEIC) Ltd, the first Shari’ah-compliant real estate investment trust incorporated in the DIFC, is being traded under the ticker symbol REIT. The firm’s IPO was 3.5x oversubscribed, raising around $175m, increased from $150m, capitalising the company at $381.2m with a 46% free float. Able Logistics picks SHUAA as lead managerDubai-based freight-forwarding company Able Logistics Group has appointed SHUAA Capital as lead manager and bookrunner for its IPO later this year. Buyout firm GrowthGate Capital, which owns 70% of Able Logistics, plans to take the company public on the Dubai Financial Market around the end of 2014. Able has annual turnover of about $200m.
Equity MarketsMarka eyes fashion, retail growth Marka plans to use the proceeds from its IPO on more than 100 fashion stores, restaurants and cafes across the Gulf Arab region over the next 5 years. The firm is offering 55% (275m shares) of its capital in an IPO on the Dubai Financial Market. Marka obtained regulatory approval to list in Dubai as a “greenfield” company and does not have to file financial records for previous years. The IPO is being lead-managed by CAPM Investment.
Jafza platform for NASDAQ Dubai listingsJafza has created a new business framework enabling companies in the Free Zone to apply to directly list shares on NASDAQ Dubai. Companies may carry out an IPO by listing as little as 25% of their shares. A minimum market capitalisation of only $10m is stipulated. Jafza companies can apply for a primary or dual listing on NASDAQ Dubai. An application to list must be made to the Dubai Financial Services Authority.
FINANCIAL SERVICES
Doha Bank to buy HSBC Bank Oman business in IndiaHSBC Bank Oman, an indirect 51%-owned subsidiary of HSBC Holdings, has entered into an agreement to sell its banking business in India to Doha Bank of Qatar. At 31 December 2013, the business to be sold had two branches and gross assets of INR 3.5bn (approximately $58m).
QIB in talks to take stake in Bank AsyaTurkey’s Bank Asya has entered into exclusive discussions with Qatar Islamic Bank (QIB) to form a strategic partnership that would include QIB becoming a strategic shareholder. Bank Asya is the largest participation bank and the 13th largest bank overall ranked by assets in the Turkish banking sector.
Commercial Bank of Kuwait to become Shari’ah compliantCommercial Bank of Kuwait plans to convert from conventional to Islamic (Shari’ah-compliant) banking. The decision was approved by a majority of 85% of the shareholders who attended ordinary and extraordinary meetings of the general assembly. The General Assembly also approved the issuance of subordinate bonds with a total value of KWD 120m.
REAL ESTATE & CONSTRUCTION
Dubai Investments’ Maritime City projectDubai Investments had previously planned to build a 5-star hotel on its Martime City plot. It is now in talks to develop other land plots as joint ventures, to build commercial offices with warehousing, logistics and showrooms, Dubai Investments has one of the largest land banks across the UAE, totalling nearly 30 million square feet gross floor area (GFA).
INDUSTRIAL
Carlyle Group sells General Lighting Company stakeThe Carlyle Group has entered into a definitive agreement to sell its 30% stake in General Lighting Company (GLC) to Royal Philips. Alliance Holding Ltd (Alliance) and the Hejailan Group have also agreed to sell, resulting in a majority sale. Carlyle’s investment in GLC was made through the $500m Carlyle MENA Fund.
Hanco acquires Byrne with GCC subsidiaries for AED 600mHanco has acquired Byrne Investments and subsidiary companies (Byrne Equipment Rental and Spacemaker) from Havenvest Private Equity Middle East Partnership and HSBC Bank Middle East, in a deal worth AED 600m. Venture Capital Bank joined
FDI investment in UAE to hit $14.4bn in 2014Foreign direct investment in the UAE reached $12bn in 2013 and is forecast to grow by 20% to reach $14.4bn. The estimated growth rate would represent a 260% increase over 2008, which not only demonstrates recovery from the global financial crisis, but reflects huge future-growth potential for the UAE economy.
FDI investment in UAE to hit $14.4bn in 2014Foreign direct investment in the UAE reached $12bn in 2013 and is forecast to grow by 20% to reach $14.4bn. The estimated growth rate would represent a 260% increase over 2008, which not only demonstrates recovery from the global financial crisis, but reflects huge future-growth potential for the UAE economy.
Barclays to sell UAE retail ops to ADIBBarclays has agreed to sell its retail banking operations in the UAE to Abu Dhabi Islamic Bank (ADIB) for an expected price of AED 650m ($177m). The deal will see ADIB acquire 110,000 customers and expand into serving expatriates. ADIB currently has 600,000 customers. In 2010, Abu Dhabi Commercial Bank bought the UAE retail arm of Royal Bank of Scotland for around $100 million in a deal that included three branches and 250,000 customers.
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Investment BankingBahrain | Doha | Dubai | Mumbai
Muscat | New Delhi
Connecting you with the right opportunities.Debt Advisory • Mergers & Acquisition Advisory • Equity Advisory
Strategic equity stake in Empire Aviation Group FZCO
&
acquired by
TOPAZ MARINE
Sale of Strategic Stake in
Bin Omran Trading & Contracting Co. W.L.L.to
Hectar Real Estate Investments W.L.L.advised by Islamic Vessel Finance
(Ijarah / Istisna) Facility
US$ 125,000,000
Hanco in the acquisition and is taking a 25% stake in Byrne. The transaction was partly financed by the UAE’s First Gulf Bank.
AIR TRANSPORT
OIL & GAS
GIS acquire JDC’s 30% stake in GDIQatari group Gulf International Services has signed a Share Purchase Agreement (SPA) with Japan Drilling Co. Ltd. (JDC) to acquire all of JDC’s 30% shareholding in Gulf Drilling International (GDI). GDI will become a fully owned subsidiary of GIS. The deal is being financed through an unsecured bilateral loan from local banks. GDI and JDC signed a Letter of Intent that provides for further technical cooperation.
Daewoo E&C wins $1.1bn refinery project in KuwaitSouth Korea’s Daewoo Engineering & Construction has won a refinery project order from Kuwait National Petroleum Company for KRW 1.18tn ($1.14bn). The project to expand production capacity at Mina Abdullah refinery facilities in Kuwait will be completed in April 2018.
LEISURE & RETAILGulf Finance House confirms LUFC saleFollowing Football League approval of Massimo Cellino as a director of Leeds United Football Club, Eleonora Sport Limited becomes the major shareholder of LUFC with a 75% stake in LUFC Holding. Gulf Finance House and other shareholders will continue to hold the remaining 25%.
Lulu to invest $200m in MalaysiaLulu International Group plans to open hypermarkets in Malaysia in collaboration with the country’s Federal Land Development Authority. The first will open this year in Kuala Lumpur with 5 more elsewhere over the next few years. Lulu has more than 100 hypermarkets in the Middle East and 1 in Kerala, India.
Dodsal Group to exit fast food businessDodsal Group is in talks to sell its Pizza Hut India food chain and has appointed boutique investment bank Euromax Capital to look for buyers. The chain is valued at around $33m and operates 86 restaurants. Dubai-based Dodsal owns the franchisee rights for South and West India. Dodsal intends to focus on its engineering and construction business in the Middle East.
TPG/Abraaj in talks for Saudi fast-food chainA joint bid by TPG Capital and Abraaj Group appears favourite to acquire a majority stake in Saudi fast-food chain Kudu after the sellers entered exclusive talks with
the pair, reports Reuters. If successful, the deal will be TPG’s first investment in the Middle East. Riyadh-based Kudu, which operates more than 200 restaurants, has been valued at around SAR 2bn.
FOOD & BEVERAGES
Abraaj acquires stake in Kool FoodAbraaj Group has taken a stake in Kool Food, a Moroccan chocolate confectionary manufacturer based in Casablanca through one of its funds. Abraaj will work on Kool Food’s international distribution strategy and seek to introduce new products in the near term. This is Abraaj’s third investment in Morocco since 2012.
TECHNOLOGY
Batelco Group acquires 46% stake in Quality NetBatelco Group has acquired the 46% stake in Kuwaiti internet and data service provider Quality Net held by Ali Alghanim & Sons General Trading and Contracting Company. The acquisition increases Batelco Group’s equity stake in Quality Net to 90%.
PACKAGING
Taghleef Industries to acquire Derprosa FilmTaghleef Industries is to acquire Derprosa Film from 3i Group, Baring and other minority shareholders. Derprosa Film is a leading supplier of specialty films for graphic arts applications for luxury packaging and is a leading supplier of films for flexible packaging converters in Spain.
Waha Capital sells stake in AerLiftWaha Capital has sold its stake in AerLift Leasing to a newly-established US-based aircraft leasing platform. AerLift Leasing was established in 2010, with Waha Capital owning 60.7%. Aerlift owns a portfolio of 11 commercial aircraft operated by a number of international airlines.
Dubai Investments Park Development Company LLC
(A wholly owned subsidiary of Dubai Investments PJSC)
Rated ‘BB with Stable Outlook’ by Standard & Poor’s
US$ 300,000,000Debut Sukuk Offering – 5 years
Joint Lead Managers
Financial Advisor
Debt Markets
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Dubai World hires Blackstone on debt optionsDubai World has hired New York-based investment and advisory firm Blackstone Group to review its debt management, reports Reuters. Dubai World’s first major maturity under the current restructuring plan is $4.4bn falling due in May 2015; a further $10bn is due in 2018. The group repaid $284.5m ahead of schedule in March.
Sunset Bay Project, including 67 villas and 210 apartments. The project is expected to be completed in 2016.
NCB, SPCC sign Tayseer financing dealNational Commercial Bank (NCB) and Southern Province Cement Company (SPCC) have entered into a financing agreement of Islamic Tayseer, amounting to SAR 700m for 5 years.
Boubyan Bank leads Zain Group facilityZain Group has secured a $250m 4-year Murabaha facility from a syndicate led by Kuwait-based Boubyan Bank and with the participation of Kuwait International Bank and Qatar Islamic Bank.
DAMAC lists $650m Sukuk on NASDAQ DubaiDAMAC Real Estate Development issued a $650m 5-year Regulation ‘S’ senior unsecured Sukuk maturing in April 2019, at a profit rate of 4.97%. The Sukuk was listed on NASDAQ Dubai and Irish Stock Exchange on 9 April 2014. Standard and Poor’s assigned the Sukuk a rating of ‘BB’ in line with DAMAC’s corporate rating. The issue was more than 4x oversubscribed.
NBAD Kangaroo bond raises AUD 400mNational Bank of Abu Dhabi’s (NBAD) AUD 400m ($358m) Kangaroo bond sale cost the bank 0.5% less for 5-year debt than a year ago. The bond, maturing in March 2019 was priced to yield 125 basis points over the swap rate. The sale was jointly managed by ANZ Banking Group, Citigroup, HSBC Holdings and NBAD itself. The lender’s inaugural Kangaroo bond in
February 2013 was priced at a spread of 175 basis points.
Waha Capital secures $750m credit facilityWaha Capital’s new 5-year $750m credit facility comprises a term loan for $375m and a revolving loan for the same amount. The deal was coordinated by HSBC and First Gulf Bank, with Emirates NBD Capital, First Gulf Bank and HSBC acting as book-runners and mandated lead arrangers.
TAQA signs JPY loanAbu Dhabi National Energy Co (TAQA) has signed a JPY 20.5bn ($200.4m) loan with Bank of Tokyo-Mitsubishi to refinance an existing obligation. TAQA swapped the loan into USD and will use the funds to refinance a portion of a $1.2bn bond due to mature in September.
ADCB buys AED 450m Mubadala Capital loan portfolioAbu Dhabi Commercial Bank (ADCB) has acquired a portfolio of SME loans made by Mubadala GE Capital worth AED 450m following a competitive bid process. The move is part of ADCB’s strategy to focus on the UAE and provide banking and financing support to SMEs.
Union National Bank finances Marina Sunset Bay Project Union National Bank (UNB) has arranged AED 600m finance for the development of National Investment Corporation’s Marina
ADIB arranges financing for IMG Worlds of AdventureAbu Dhabi Islamic Bank (ADIB) arranged an AED 1.2bn syndicated Islamic facility for IMG Theme Park, the company behind IMG Worlds of Adventure, Dubai’s first mega-themed entertainment destination. ADIB acted as the Mandated Lead Arranger, Investment Agent, Security Agent and Account Bank for the facility. Al Hilal Bank, Commercial Bank International participated as Mandated Lead Arrangers, Noor Islamic Bank as Lead Arranger and Sharjah Islamic Bank as Arranger.
