Abu Dhabi: Abu Dhabi wealth fund Mubadala Investment Co. said it's "close" to an initial public offering of Emirates Global Aluminium, as it studies other major deals including a role in a consortium investing in Saudi Aramco's oil pipelines.
"We've been thinking about this for a couple of years and waiting for the right time for that business to be IPO'd," CEO Khaldoon Al Mubarak said when asked about EGA, the Middle East's biggest producer of aluminum. "We're very close now."
Coming off its busiest year ever, the $232 billion fund has shown little sign of slowing down in 2021, striking deals ranging from purchasing a Brazilian refinery to investing in convertible bonds of messaging app Telegram.
EGA, which is equally-owned by Mubadala and Investment Corp. of Dubai, has smelters in Abu Dhabi and Dubai and a bauxite mine in Guinea. Its revenue in 2020 was $5.1 billion and it made earnings before interest, tax, depreciation and amortization of $1.1 billion.
Held back share float
The company had planned an IPO in 2018 or 2019 but it was pulled after then-U.S. President Donald Trump imposed tariffs on aluminum imports from the UAE. His successor Joe Biden said in February that he would keep the US restrictions in place, reversing Trump's last-minute move to grant the UAE relief from the duties.
"We will decide, obviously, when the appropriate market conditions are there, but the company is certainly in a very strong position and I think is well placed for an IPO," Al Mubarak said.
Saudi possibilities
Mubadala is meanwhile considering other deals. It hasn't yet decided whether to join a group led by EIG Global Energy Partners that agreed on a $12.4 billion deal with Aramco. The wealth fund has teams studying the opportunity and looking at possible returns on investing in Saudi Arabia, according to Al Mubarak.
The investors will buy 49 per cent of Aramco Oil Pipelines Co., a recently-formed entity with rights to 25 years of tariff payments for crude shipped through the Saudi Arabian firm's network. Aramco will own the rest of the shares and retain full ownership of the pipelines themselves.
Mubadala has also made no decision about a share sale of its wholly-owned chipmaker GlobalFoundries, according to Al Mubarak. Earlier this month, Bloomberg reported that the wealth fund had started preparations for a US IPO that could value the business at about $20 billion.
Get Indian exposure right
After an initial pause after the pandemic first hit, the wealth fund doubled down and invested more in 2020 than in any previous year, the CEO said. India emerged as one key destination for Mubadala's money, with its investments there in 2020 eclipsing the combined total of the preceding 19 years, Al Mubarak said.
The wealth fund invested $1.2 billion in Reliance Industries Ltd.'s digital upstart Jio Platforms Ltd. in 2020, a deal that gave Mubadala a 1.85 per cent stake in the venture.
"Clearly, we were underweight in terms of India" and "over the last many years we didn't invest as much as we should," the CEO said. "That's changing, and as far as we're concerned in Mubadala, we're certainly giving it a very particular focus."
