Aabar investments, the second largest shareholder in Arabtec, is in talks to buy at least half the stake of the former chief executive Hassan Ismaik, Bloomberg News reported citing sources.
The Abu Dhabi state fund is looking to acquire almost 30 per cent of Arabtec to become the largest shareholder in the company, a source was quoted as saying. Aabar is negotiating to buy Ismaik’s shares at Dhs5-Dhs6, the person said on terms of anonymity since the matter is not public yet.
Trading in Arabtec’s shares were suspended from opening on Thursday morning pending clarification of a possible increase in stake, a bourse spokesman told Reuters.
Ismaik, who owns a 28.9 per cent stake in the company, said previously that he had three offers but that he would hold on to his shares until he was was able to sell them for Dhs6 or Dhs7.
Arabtec shares began plunging in late May as rumours circulated of a rift between Ismaik and Aabar. Speculation gained ground after the Abu Dhabi-based fund cut its stake in the builder in June, causing the company’s stock price to begin a freefall that dragged much of the bourse down.
Ismaik resigned soon after, which led Arabtec’s share value to crash almost 70 per cent between mid-May and early June. This was followed by a large number of staff being laid off in the company, fuelling a further plunge in the market.
However, Arabtec’s shares gradually stabilised after Aabar assured investors of its backing for the company.
In a recent press conference, the fund’s chairman Khadem Abdulla al Qubaisi said that Arabtec was a long tem investment for the state fund and hinted it could even raise its stake in the company in near future.
He added that company was in a restructuring phase in a bid to reduce costs and will therefore focus only on its core construction business rather than branching out to other sectors. Al Qubaisi also said that no projects have been scrapped due to Arabtec’s restructuring process.
Al Qubaisi pegged the value of Arabtec’s current projects inside and outside the UAE at Dhs262.2 billion.