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Mubadala will spend Dh20.1b to expand portfolio

Majority will relate to its semiconductor unit

Gulf News

Dubai: Mubadala, the Abu Dhabi government's investment vehicle, expects to spend about Dh20.1 billion ($5.47 billion) this year as its seeks to expand a diverse line of businesses ranging from oil and gas to semiconductors.

"The group currently anticipates that its capital and investment expenditure for 2012 is likely to be substantially in line with the Dh20.1 billion annual average for the past three years," it said in a update of its bond programme.

The state-owned fund, which has stakes in General Electric and private equity firm Carlyle, expects a majority of that expenditure to relate to its semiconductor unit Advanced Technology Investment (ATIC); its joint venture with General Electric; solar energy project Masdar and oil and gas projects.

Its semiconductor unit Atic had an accumulated deficit of Dh4.1 billion as of the end of 2011 and made losses in the past two years, Mubadala said in the filing.

"No assurance is given that ATIC will be profitable in 2012 or in subsequent years," Mubadala said in a section highlighting the risks associated with the business in its bond prospectus.

In a separate statement, Mubadala said ATIC was making further investments in boosting capacity and research in a bid to become a "profitable catalyst" for the emirate's economic development. "Mubadala routinely discloses risk factors within a bond prospectus, in line with various regulatory requirements," it said.

Mubadala, which recently bought a $2 billion stake in Brazilian conglomerate EBX Group, said in April that it expects its investment outlay in 2012 to be slightly lower than last year's $16.3 billion after saying its overall annual loss surged due to volatile global markets.

One of the few state-controlled vehicles to publish results, Mubadala also owns stakes in local companies including indebted developer Aldar Properties and cooling firm Tabreed which it helped recapitalise last year.

The investor's two most significant profit-making joint ventures last year were Dolphin Energy and Emirates Aluminium Co, according to the document.

Dolphin energy

Mubadala will receive less revenue from its 51 per cent stake in Dolphin Energy Ltd as the unit's natural gas assets are returned to the Qatari government.

Earnings from the Dolphin gas project will "significantly decline" once the costs of building the project have been recovered, which is forecast to occur near the end of 2012, and the upstream resources are transferred to Qatar, Mubadala said in the update of its bond programme.