Dubai: Arabtec Holding, the largest construction firm in the UAE by market value, Thursday said due diligence was being finalised on a deal under which Abu Dhabi's Aabar Investments will acquire a 70 per cent stake in the builder.
"It is still ongoing. Due diligence is being finalised," Arabtec chief executive Riad Kamal told reporters in Dubai.
Analysts have said Aabar's offer to acquire a 70 per cent stake in Dubai-listed Arabtec worth Dh6.4 billion could be highly dilutive for the company's shareholders.
"I hope what the Arabtec board sees as beneficial the shareholders will see as beneficial also," Kamal added.
Aabar, listed on the Abu Dhabi bourse, is the largest shareholder in Daimler AG. Aabar is majority owned by Abu Dhabi government firm International Petroleum Investment Co and makes non-energy investments for the company.
Kamal said Arabtec was "struggling" like any other company in the UAE's construction market, which has been hit by the global downturn, with projects cancelled or delayed.
Dh1 billion owed
Kamal said "no money was coming through from Nakheel," Dubai's struggling property developer, adding that Arabtec was owed well in excess of Dh1 billion across all its business lines.
"It [money that is owed] is certainly more than Dh1 billion," Kamal said.
This year, Arabtec will target the markets in Abu Dhabi, Saudi Arabia and Qatar, he said. "The Abu Dhabi market is growing, and projects are booming but Dubai is shrinking."
Kamal declined to comment on the group's soon-to-be-announced, full-year 2009 results.
Arabtec chief financial officer Ziad Makhzoumi told Zawya Dow Jones earlier this month that he expected a full-year 2009 net profit of about Dh640 million, down sharply from Dh958 million in 2008.
Arabtec shares closed up 2.88 per cent at Dh2.14 on the Dubai bourse Thursday.
Nakheel work stopped
Arabtec Holding Co stopped work on a project for state-owned developer Nakheel PJSC for lack of payment, Chief Executive Officer Riad Kamal said.
Kamal said there was no delay in payments from the government of Dubai for state projects.
Aabar Investments PJSC, the Abu Dhabi government controlled company, was still carrying out due diligence for a stake in Arabtec, Kamal said. The company will press ahead with a Russian project, which would start after soil tests were concluded, he said.
