Dubai’s Arabtec Says To Float Unit’s Shares In Egypt

Dubai-based construction firm Arabtec Holding aims to float half of its Egyptian unit on the Cairo stock exchange in 2016 or 2017 in an initial public offer that would value the unit at around $10 billion, the firm said on Monday.

In response to questions from Reuters, Arabtec also said it planned to invest about $60 billion in Egypt over the next three years in sectors such as real estate development, infrastructure, trains, airports, and oil and gas.

The company did not give details of its plans, which will depend heavily on factors outside its control, such as Egypt’s political and economic stability in the wake of its 2011 revolution.

Nor did it specify how it would finance such huge investments, which could strain its finances at the company’s current size. Arabtec’s revenues rose 30 per cent to Dhs7.4 billion ($2.0 billion) last year.

But the announcement underlined how Egypt, which is trying to rebuild its economy after three years of political turmoil, can hope for substantial support from state-backed companies in the wealthy Gulf countries.

The United Arab Emirates, Saudi Arabia and Kuwait applauded the ouster of Egypt’s Islamist president Mohamed Mursi last year and have given Egypt billions of dollars of aid since then to help prevent any resurgence of the Muslim Brotherhood.

Arabtec, whose largest shareholder is Abu Dhabi state fund Aabar with a 22 per cent stake, has emerged as a major channel for the UAE’s economic diplomacy.

The company said in March that it would help to ease Egypt’s politically sensitive housing shortage by launching a $40 billion project to build one million homes by 2020 on land provided free by Egypt’s armed forces.

In its statement on Monday, Arabtec linked its planned investments in Egypt to last week’s presidential election victory by former army chief Abdel Fattah al-Sisi, the favourite of the Gulf states.

“The political stability which will be witnessed in Egypt following the victory of Field Marshal Abdel Fattah al-Sisi in the presidential election will boost the company’s investment plans in Egypt,” the company said.