Investment Banking

CAPITAL ADVANTAGEGCC markets round-up | April 2014

Connecting you with the right opportunities

Initial Public OfferingsnGulf Marine Services makes muted

London debutnEmaar to listing shopping malls &

retail subsidiarynREIT seeks $136m in Dubai’s first IPO

in 5 yearsFinancial ServicesnBank Muscat update on bond conversionnFinance House gets nod for share buybackReal Estate & ConstructionnGulf Finance House invests in Indian

real estatenArlington Investors-led group

completes 50/50 jv deal

Debt MarketsnDubai debt refinanced by Central

Bank, Abu Dhabindu refinances debt facilities on more

favourable termsnFirst Gulf Bank plans $1.07bn Sukuk

in MalaysianBank Muscat shareholders approve

funding programme

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IN THIS ISSUE…

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Oil & GasnNDC acquires AED 120m land drilling

rig made in UAEnDana Gas reports increase in share capitalLeisure & RetailnEFG-Hermes sells Damas stake to

Qatar’s MannaiAutomobilesnJaguar Land Rover plans $167m

Saudi factoryRecyclingnal khaliji financing recycling plant in Qatar

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Alpen Capital’s research recognised by Banker Middle East Alpen Capital’s excellence in the area of research was recognised yet again when it was named Best Research House in the Banker Middle East UAE Product Awards 2014. This is the third time Alpen Capital won this honour, earlier being in 2011

and 2013. Alpen Capital’s Industry Research services complement its existing Investment banking advisory services in the areas of Debt, M&A, Equity and Capital Markets. The Industry research focuses on the various sectors in the GCC that are of interest to Alpen Capital’s clients. The reports provide an overview on emerging trends, fundamental growth drivers, noteworthy challenges, industry outlook as well as the investment opportunities that are present in the sector. Alpen Capital has brought out Industry reports in sectors such as Retail, Food, Healthcare, Construction, Pharmaceuticals, Education, Hospitality, Aviation and Insurance.

Alpen Capital published its first research report on GCC Aviation sector on 3 March.The GCC Aviation Industry is emerging as an important benchmark in the global aviation market as the balance of global aviation gradually shifts away from traditional markets such as Europe and the US. The region’s sophisticated airports and fastest growing carriers have carved a niche for themselves globally through their excellent hospitality and competitive ticket prices. This will go a long way in promoting the overall growth of the aviation sector in the GCC. This growth is also being fuelled by strategic development across sectors like infrastructure, tourism, healthcare, education and sports facilities.

Alpen Capital team receiving the award from Adam Broom, CEO, CPI Financial.

Alpen Capital predicts strong growth for GCC Aviation

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INITIAL PUBLIC OFFERINGSGulf Marine Services makes muted London debutAbu Dhabi-based Gulf Marine Services (GMS) made a muted stock market debut in London, reports Reuters. In conditional trading GMS shares stood at GBP 1.35, unchanged from the IPO, which had been priced at the bottom of the proposed range, capitalising the company at GBP 472m ($787.1m). The listing raised GBP 66.9m for the company. PE firm Gulf Capital cut its stake from 79% to 51.9% while Horizon Energy and Al Ain Capital cut their stakes to 6.5% from 10%. Bank of America-Merrill Lynch and Barclays were global coordinators and bookrunners with JP Morgan Cazenove also acting as a bookrunner. Rothschild was the financial adviser.

REIT seeks $136m in Dubai’s first IPO in 5 yearsUAE-based Emirates REIT, is to sell shares on NASDAQ Dubai in the first initial public offering (IPO) in the country in 5 years. The real estate investment trust is seeking a minimum of AED 500m ($136m) to fund acquisitions and investments, capitalising on the resurgence in Dubai’s real estate market.

Equity MarketsSHUAA Capital and Emirates NBD Capital will act as joint bookrunners on the deal. ADCB, Dubai Islamic Bank and EFG-Hermes UAE are co-lead managers for the sale.

DFM to list its first F&B business Dubai’s Marka is in the advanced stages of launching an AED 500m IPO on the Dubai Financial Market (DFM), making it the first retail and F&B company to be listed in UAE, and the first company to list an IPO on DFM since 2009. Marka has received preliminary approval for its IPO and intends to offer its shares to the public for subscription in the UAE. CAPM Investment has been appointed financial advisor and lead manager of the IPO. The company’s founders will subscribe to 45% of the equity, or the equivalent of AED225m (225m shares), while the remaining 55% equity (275m shares) will be offered to the public in an IPO at a price of AED 1 per share.

Saudi Government to sell 15% of NCB in IPOSaudi Arabia’s Government reportedly plans to sell a 15% stake in National Commercial Bank (NCB) in the Kingdom’s first bank IPO since 2008. The Saudi Press Agency quoted Finance Minister Ibrahim Alassaf as saying the IPO plan would be submitted to the market regulator in the third quarter of this year. Sovereign fund Public Investment Fund will be the seller.

FINANCIAL SERVICES

Bank Muscat update on bond conversionIn a statement to the Muscat Securities Market, Bank Muscat reported the conversion into common equity of the remaining 50% of Mandatory Convertible Bonds issued in 2009. The bank noted the price for the conversion was OMR 0.531, calculated at a 20% discount to the average closing market price over the preceding 90 calendar day period prior to the conversion date.

Finance House gets nod for share buyback programmeFinance House (FH) has secured approval from the Central Bank of the UAE (CBUAE) and the Securities and Commodities Authority (SCA) for a share buyback programme of up to 10% of its paid up capital.

Gulf Finance House proposes capital reduction, convertible Sukuk Bahrain-based Gulf Finance House (GFH) plans a reduction in the investment bank’s capital and a new convertible Sukuk issue to restructure existing debt. A proposal has been put forward to reduce the issued and paid-up capital from $972,281,164 to $837,900,841. GFH also plans a new Sukuk, convertible into common shares, of up to $500m, to be used to restructure current liabilities, develop projects and for acquisitions.

REAL ESTATE & CONSTRUCTION

Gulf Finance House invests in Indian real estateGFH has signed two agreements for real estate development in India. The first agreement, with Wadhwa Group, sees architect firm Hafeez Contractor appointed as master planner of phase 1 of the Energy City and Mumbai IT & Telecom City (India Project) developments in New Mumbai. The second agreement is with Adani Infrastructure & Developers to explore development opportunities in relation to infrastructure and real estate projects in India.

GFH Capital placement of prime central London property oversubscribedGFH Capital, a wholly-owned subsidiary of Gulf Finance House, reports the successful placement with GCC investors of its newly acquired prime central London residential property. The luxury property, which is located in Kensington, is a five unit Grade II listed building overlooking the Queens Gate Gardens. GFH Capital had announced the acquisition of its Queens Gate Gardens property in January 2014.

Arlington Investors-led group completes 50/50 joint venture dealA group of Gulf-based investors led by Arlington Investors has completed a GBP 270m acquisition of the former Opal portfolio, comprising eight student accommodation sites in UK. The transaction is a 50/50 equity partnership with Campus Living Villages (CLV), one of the world’s leading operators of student accommodation. The deal is Arlington’s first transaction. The London-based investment company represents family offices from the Middle East.

Emaar to list shopping malls & retail subsidiaryEmaar Properties, UAE-based global property developer, is to list its shopping malls & retail subsidiary. Subject to market conditions, Emaar will list up to 25% of Emaar Malls Group through a secondary offering of shares. The funds raised through the sale, estimated to be between AED 8-9bn (over $2-2.4bn), will be primarily distributed as dividend to the company’s shareholders. Emaar Properties expects the listing to occur within months and is also preparing its Egyptian unit Emaar Misr for an initial public offer in Egypt, Emaar Chairman Mohamed Alabbar to Al Arabiya TV. Separately, in an interview with Bloomberg TV, Alabbar said Emaar had appointed Morgan Stanley to advise on the sale of its malls & retail unit and was considering appointing a local (UAE) bank as an additional adviser for the offering.

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Investment BankingBengaluru | Bahrain | Doha | Dubai

Mumbai | Muscat | New Delhi

Connecting you with the right opportunities.Debt Advisory • Mergers & Acquisition Advisory • Equity Advisory

Strategic equity stake in Empire Aviation Group FZCO

&

acquired by

TOPAZ MARINE

Sale of Strategic Stake in

Bin Omran Trading & Contracting Co. W.L.L.to

Hectar Real Estate Investments W.L.L.advised by Islamic Vessel Finance

(Ijarah / Istisna) Facility

US$ 125,000,000

PETROCHEMICALS

Kuwait buying stakes in Indian petrochem venturesKuwait oil operator Petrochemicals Industries Company (PIC) is to sign an agreement with Indian state-run Oil and Natural Gas Corporation (ONGC) to buy a stake in its two petrochemical ventures within two to three months. No financial details have been disclosed but local press reports suggest ONGC has been looking for an investment of $300m in each project.

OIL & GAS

NDC acquires AED120m land drilling rig made in UAEUAE state news agency WAM reports National Drilling Company, NDC, has signed an agreement with National Oilwell Varco to acquire a second land rig, valued at approximately AED 120m. The deal is part of a comprehensive rig fleet expansion programme being executed by NDC and covers offshore, onshore and land rigs.

Dana Gas reports increase in share capital from convertible SukukIn a statement to the Abu Dhabi Securities Exchange (ADX), Dana Gas reported that it had received approval on 2 March for an increase in the company’s share capital of AED 85,256,403 (of 85,256,403 ordinary shares) arising out of the conversion of voluntary conversion notices received between 16-31 January amounting to $17,411,110 in convertible Sukuk.

PRIVATE EQUITY

LEISURE & RETAIL

EFG-Hermes sells Damas stake to Qatar’s MannaiReuters reports that the private equity arm of Egyptian investment bank EFG-Hermes has sold its 19% stake in UAE jeweller Damas International to Qatar’s Mannai Corp for $150m. The Qatari conglomerate will now hold 100% of the jeweller. EFG-Hermes had paid $85m for the stake in 2012. EFG Hermes’ Investment Banking division acted as financial advisor and Freshfields was the legal advisor to the private equity division on the Damas exit.

FOOD & BEVERAGESECP invests in Atlas Bottling Corporation (ABC)Emerging Capital Partners (ECP), the pan-African private equity firm, has taken a 33% stake in Atlas Bottling Corporation (ABC), the exclusive PepsiCo bottler of carbonated soft drinks in Algeria, as part of an $80m investment plan.

AUTOMOBILES

Jaguar Land Rover plans $167m Saudi factoryTata Motors-owned Jaguar Land Rover (JLR) plans to invest $167m in a new factory in Saudi Arabia. The Sunday Times of London reports the UK-based carmaker is close to signing a deal with the Saudi Government for the plant which will build a version of the Land Rover Discovery and create up to 5,000 jobs. Speaking in New Delhi, Saudi Minister of Commerce and Industry Tawfiq Al Rabiah said the plant would be located in the Eastern Province, the report added.

RECYCLING

al khaliji financing recycling plant in QatarAl Khalij Commercial Bank (al khaliji) is financing a QAR 116.8m greenfield project for recycling materials in Qatar. The 20,000 sqm project, Modern Recycling Plant, is designed to recycle used tyres in Mesaieed Industrial City.

Dubai Investments realises private equity profits of AED 108mDubai Investments’ private equity subsidiary Masharie has realised profits of AED 107.68m through divestments in nine subsidiaries over the years. Masharie, which has acquired a total of 23 companies since its incorporation in 1998, currently owns 12 companies in its portfolio. Divestments over the last nine years include Metrofile Middle East, Emirates Explosives, Gulf Printing & Publishing, Thermoset Technologies, Stromek Emirates Foundations, Al Arif Contracting Co. & Power Factor Facilities Management LLC, Anchor Allied Factory Limited & Inter Chemi International Limited; with return on investments varying between 100% and 600%.

Dubai Investments Park Development Company LLC

(A wholly owned subsidiary of Dubai Investments PJSC)

Rated ‘BB with Stable Outlook’ by Standard & Poor’s

US$ 300,000,000Debut Sukuk Offering – 5 years

Joint Lead Managers

Financial Advisor

Debt Markets

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© Alpen Capital 2014 (www.alpencapital.com)

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Dubai debt refinanced by Central Bank, Abu DhabiAbu Dhabi and the Central Bank of the United Arab Emirates (CBUAE) have agreed to refinance $20bn of debt extended to the Dubai government as emergency aid during its financial crisis, according to state news agency WAM. The debt, which falls due this year, will be rolled over for 5 years at an annual interest rate of 1%. The deal covers a $10bn, 5-year loan offered to Dubai by the Abu Dhabi Government through National Bank of Abu Dhabi and Al Hilal Bank, and $10bn of five-year bonds issued by Dubai to the CBUAE.

First Gulf Bank plans $1.07bn Sukuk in MalaysiaAbu Dhabi’s First Gulf Bank (FGB), the UAE’s third-largest bank by assets, is looking to raise MYR 3.5bn ($1.07bn) through Sukuk in Malaysia, to be issued by funding unit FGB Sukuk Company II. Credit rating agency RAM Ratings rated the program ‘AAA’ or Stable on the bank’s size and high likelihood of government support, as the Abu Dhabi ruling family owns 64% of FGB.

Bank Muscat shareholders approve funding programmeBank Muscat shareholders agreed to an increase in the bank’s Euro Medium Term Note (EMTN) programme, as approved at the EGM in 2011, from $800m to $2bn. Shareholders also approved the setting up of OMR 500m, or its equivalent, Meethaq Sukuk Programme and an SAR 1bn Sukuk programme for the bank’s branch in Saudi Arabia.

ADCM, Eastdil finance Central London acquisitionIntegrated Alternative Finance, a wholly owned subsidiary of Abu Dhabi Capital Management (ADCM), has secured an AED 786m bridging facility for the acquisition of 1 Palace Street, London, with exclusive advisor Eastdil Secured. The facility was provided by Omni Capital to fund redevelopment of the Grade II listed former hotel building.

S&P: MENA Sovereigns to borrow $56bn in 2014Standard & Poor’s Ratings Services (S&P) projects that the 12 sovereigns that it rates in the Middle East and North Africa (MENA) will borrow an equivalent of $56bn from long-term commercial sources in 2014. This would be a 27% increase in long-term commercial debt issuance compared with 2013. About 67% or $38bn of the sovereigns’ gross commercial borrowing will be to refinance maturing long-term commercial debt, compared with $25bn in 2013, resulting in an estimated net commercial borrowing of $18bn, said S&P.The ratings agency projects that rated

MENA sovereigns’ commercial debt stock will reach an equivalent of $462bn by the end of 2014, up by $17bn, or 4% from 2013. Adding in bilateral and multilateral debt, the total stock will reach $504bn, a year-on-year increase of $15bn, or 3%. S&P expects the three sovereigns with large fiscal deficits --Egypt, Morocco, and Lebanon--to issue the lion’s share of government debt in the region in 2014, totalling $44bn, just over three-quarters of the total.

du refinances debt facilities on more favourable terms Emirates Integrated Tele-communications Company (du) has announced three separate financing deals amounting to $1.17bn. A $720m Club Deal provided by ADCB, NBAD and Samba Financial Group replaces two existing debt facilities. The 5-year facility at a margin of 120 basis points (bps) over the London interbank offered rate (LIBOR), and an all-in cost of 140 bps, saves the company $7m over 5 years. In addition, Standard Chartered Bank has provided a $300m 5-year loan at a margin of 115bps and an all in cost of 140bps, saving the company $1.2m over 5 years, and DBS Singapore has provided a $150m 3-year facility at a margin of 120bps over LIBOR saving du $800,000 over 3 years.