Dubai: The $1.7 billion (Dh6.25 billion) merger of Dubai contractor Arabtec and Abu Dhabi's Aabar Investments will be completed in April and will help ease a funding squeeze and boost growth, Arabtec's chief financial officer (CFO) said.
The deal between Arabtec and Aabar may pave the way for a revival of projects in Abu Dhabi and help expansion in Saudi Arabia and Azerbaijan, Ziad Makhzoumi said.
"[The deal] will bring to us new opportunities in oil, gas and infrastructure. And it will bring to us funding. Not that we need it, but if we have it, we can reduce the dependency on the banks, especially in our expansion. A lot of banks have limited resources and are cautious on lending."
Under the agreement, Aabar in January had agreed to acquire a 70 per cent stake in Arabtec.
Due diligence
"Both of us underestimated the work that has to be done. That's why it was decided to expand the date to another 60 days. And we hope that by then we will have a deal in one way or another. I don't believe any surprise will come up with due diligence," Makhzoumi said.
In February, the company had said the deal was on track with a possible closure in March.
The company aims to relaunch a joint venture with Greek builder Aktor, part of Ellaktot Group for a hospital in Abu Dhabi, a $4 billion project cancelled in 2009 which is being retendered. "We are hoping it will be awarded soon. That was the biggest joint venture for us in Abu Dhabi," Makhzoumi said, adding other major projects may also be revived.
Arabtec is bidding for a property contract worth around $1 billion to build a residential and luxury hotel complex in Azerbaijan.
"It's a project we're very good at. They're luxury towers, If you take both projects in excess of $1 billion," Makhzoumi said.
