Dubai: Aabar Investments announced on Friday its plans to acquire 70 per cent of Arabtec through convertible bonds, the company said in a statement posted on its website.
"The Board of Aabar has resolved to make an offer to Arabtec to acquire 70 per cent of the share capital of Arabtec by way of a mandatory convertible bond to be issued by Arabtec Holding PJSC to Aabar Investments at a conversion price of Dh2.3 per share," the company said.
The proposed price is a 20.4 per cent discount to Arabtec closing price of Dh2.89 on Thursday. Arabtec surged 6.3 per cent on Thursday.
Credit Suisse said in research note that through this deal Arabtec would get a welcome cash injection.
"Arabtec gets a cash injection of 6.4 billion dirhams ($1.74 billion) which hedges the company against any shortfall in working capital resulting from potential default on payments from Dubai clients," analyst Ahmed Badr said in the note.
