M'Sharie to sell 40% stake in private placement

Dubai: M'Sharie, the private equity arm of Dubai Investments Co, is selling a 40 per cent stake in a private placement and expects to offer shares to the public within two years, an executive said.

"We are closing a private placement by June 30 where we are offering 40 per cent of equity to five or six strategic investors of the Gulf region," M'Sharie Chief Investment officer G. Bala Subramanyan told Reuters on the sidelines of a private equity conference.

M'Sharie is valued at between Dh1.3 billion ($353.9 million) and Dh1.5 billion, Subramanyan said.

"We want to have a higher reach in the Gulf region," he said, adding that Gulf International Bank is advising on the sale.

Subramanyan said M'Sharie planned to sell shares to the public in an initial public offering in 18 to 24 months, adding that the stake sale would be determined by governmental "regulations".

"It will make us a more regional company with a better reach," he said.

M'Sharie has 17 investments valued at about Dh2.5 billion with focus primarily on the construction and manufacturing sector.

Subramanyan said the firm expected an internal rate of return on its investments of "more than 50 per cent".

New deals

"We are working on four new deals, which we expect to close in September," he said, adding the deals would be in the construction, manufacturing, and media sectors and also see the merger of two of its existing firms with a competitor. The transactions would be worth about $20 million each.

Dubai Investments, whose businesses range from glass-making to pharmaceuticals, posted its biggest profit ever in the first quarter on gains in the fair value of its investment property and real estate sales.

Its shares closed 2.25 per cent down on Monday. The stock is up more than 15 per cent this year, outperforming Dubai's main benchmark, which is down 5.61 per cent.