The former chief executive of major Dubai construction firm Arabtec, who abruptly resigned from the company this week, said he has no plans to sell his 28.85 per cent stake.
Hasan Ismaik left Arabtec’s board on Wednesday, resigning as chief executive at the same time, and ending a tumultuous few weeks for the company in which its shares plunged and major shareholder Aabar Investments cut its stake. The selling dragged down the entire Dubai stock market.
“I will keep it,” Ismaik told Reuters when asked if he would now seek to offload his stake in Arabtec, which at current market prices is worth about $1.47 billion.
“I am an investor. I believe in the company, Arabtec has great potential.”
Asked again whether he might sell the stake, Ismaik replied: “No, I will hold my shares and I have not decided yet about when I should sell.”
He did not say how he had financed his holdings in the company. In late May, Arabtec said Ismaik had raised his stake to 21.46 per cent from 8.03 per cent; on Sunday this week, bourse data showed the stake had risen further to 28.85 per cent.
Forbes magazine said this month that Ismaik, 37, had become the first Jordanian billionaire – and the third-youngest billionaire in the Middle East – because of his holdings of Arabtec shares.
The share price hit a record high in mid-May, but then plunged 50 per cent as investors fretted over whether Aabar was reducing its support for the firm after the state fund cut its holding to 18.85 per cent from 21.57 per cent.
Asked why he quit as CEO, two years after taking the helm, Ismaik said there was “no particular reason”. “I have a lot of my businesses and I want to go back to my business, focus on my business and manage my businesses,” he added.
Ismaik is chairman of HAMG, an Abu Dhabi-based private investment company with interests in a variety of sectors including property, construction and hospitality, according to its website.
His departure has enabled Aabar to cement its control of Arabtec, with Mohamed Al Fahim, a board member from Abu Dhabi’s state-owned International Petroleum Investment Co (IPIC), the parent of Aabar, appointed acting CEO.
Aabar bought into Arabtec in 2012 and was seen as a key factor in the contractor rapidly expanding its order book. It has recently announced projects including a $40 billion deal to build housing in Egypt.
“How and where is Arabtec going to get the required funding in order to execute on the project?” said Allen Sandeep, director of research at Naeem Holdings in Cairo.
“They have set up an entity in Egypt; raising capital locally either through an IPO or private placement, as well as getting loans from local and foreign banks. Abu Dhabi could provide funding via equity and/or cheap debt.”