Dubai: Abu Dhabi Financial Group LLC, the multi- billion dollar investment firm which bought a stake in Gulf Navigation Holding PJSC, is seeking to boost its holding in the chemicals-shipping firm as it works to improve the company’s performance. The shares jumped.
ADFG, which bought about 6 per cent of Gulf Navigation earlier this year, is in talks with the market regulator on plans to increase its stake, Chief Executive Officer Jasem Al Seddiqi said in an interview in Dubai Wednesday. ADFG would consider boosting its holding to 50 per cent “if the price is right,” Alseddiqi said, declining to be more specific.
“We are looking to take a more active role in it,” Al Seddiqi said. “If it means changing the board, we will do that and if it means rallying other shareholders we are doing that.”
Activist shareholders are rare in the UAE, which was upgraded to emerging market status by MSCI Inc. more than two years ago. ADFG, which has six units, is active in alternative investments, asset management and real estate development, including luxury apartments opposite Buckingham Palace.
Performance
“All stakeholders are always welcome to discuss their point of view and concerns about the company with the management of Gulf Navigation and the board of directors,” the shipping firm said in an emailed statement. “We would also like to point out that the company has performed extremely well in 2014 and this year has achieved 123 per cent profit growth at the end of the third quarter.”
Gulf Navigation shares climbed as much as 2.1 per cent to Dh0.49 on Thursday, bringing this year’s gain to 25 per cent, while Dubai’s measure fell 0.3 per cent. It has gained 15 per cent this year.
Gulf Navigation in August said it was in breach of specified covenants with its lenders, rendering loans payable on demand.
Listed companies in Dubai and Abu Dhabi currently provide the best investment opportunity in the UAE, Al Seddiqi also said, adding that ADFG is exploring buying stakes in listed real estate and financial services companies. It will consider other sectors if opportunities were compelling, he said.
“The stock market is deeply discounted and everything is cheap,” he said. “It will not rally tomorrow. It will take time, but that gives us time to plan going forward.”
