Dubai's Arabtec plans rights issue, bond sale

DUBAI: Dubai builder Arabtec said its board will call a shareholders meeting to seek approval for a capital raise through a rights issue and sale of five-year convertible debt.

The largest builder in the United Arab Emirates by market value, said on Tuesday, Jan 11 it will call an extraordinary shareholders meeting to consider an issue of 398.67 million shares at one dirham (RM0.84) a share to existing shareholders and sell US$150 million (RM462 million) worth convertible bonds.

The company's board of directors will meet on Jan 16, it said in a statement to the Abu Dhabi bourse.

Arabtec plans to use the proceeds to fund its expansion plans and increase working capital, the statement said.

Arabtec, which is bidding for US$8.17 billion of work outside its local markets, may look at new funding sources for its expansion plans, its chief financial officer told the Reuters Middle East Investment Summit in Dubai in October.

The company is expanding overseas to diversify its portfolio away from Dubai's once-booming property sector which has been hit hard by the global financial crisis as developers slow or cancel projects and jobs are slashed.

Property prices in Dubai have been under pressure since late last year, when the financial crisis and a slump in oil prices ended a six-year economic boom in the Gulf region.

Earlier in the month, Arabtec's chief executive Riad Kamal was handed a trading ban by the country's regulator, said he sold shares prior to the announcement of projects in May last year as part of his portfolio reshuffle. — Reuters