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Arabtec Wins Dh1.36b Deals

DUBAI — Arabtec Holding, the biggest construction company in the UAE, said on Monday it has secured three projects, two in the country and one in Qatar, worth Dh1.36 billion as the builder continues to focus on overseas markets for its expansion.

Arabtec’s Target Engineering Construction Company was awarded two contracts in Abu Dhabi with a combined value of Dh835 million for construction and commissioning works while Arabtec Construction Company signed an agreement for a Dh524 million office tower project in Doha, the company said in two separate statements.

The first project in Abu Dhabi was awarded by Abu Dhabi Oil Refinery Company, Takreer, worth Dh358 million, which will be completed in 28 months while the second project in the capital was awarded by the Joint Venture “Petrofac — GS” and the duration of the project is estimated 20 months with a total value of Dh477 million.

“The two new projects enforce our strategy to position Target as a leading company in the construction sector and especially in marine engineering and construction projects,” Target Engineering chief executive officer Ayman Taji said in the statement.

Separately Arabtec signed a letter of intent from the Qatar General Insurance and Reinsurance Co for a 50-story building called “the World Trade Center office tower” in Doha and it is expected to be completed by 2012.

Arabtec, which is listed on the Dubai Financial Market, or DFM, was raised to “outperform” from “market perform” with a price estimate of Dh3.20 by Al Mal Capital after the announcement of Dubai government proposal for Dubai World debt. The government on March 25 said it would inject $9.5 billion into Dubai World.

“Our new target price includes virtually no write-down on Dubai backlog hereafter and excludes the dilution impact as well as the Dh6 billion cash component, as proposed in the deal,” Al Mal Capital, the equity research firm, said in a note.

Arabtec stocks fell by 1.54 per cent to Dh2.55 on the DFM on Monday despite securing three projects. The share rose 12 per cent on Sunday, the most since December 28, to Dh2.59. This year it gained the most after the Dubai World announcement.“For Arabtec, it appears that at least 30 per cent of its outstanding Dubai receivables (estimated to be Dh3 billion) or 21 per cent of the total receivables of Dh4.6 billion, is likely to find a favourable solution from Dubai World and Nakheel,” Al Mal Capital said.

“We estimate Nakheel owes Arabtec Dh1 billion, of which the contractor is likely to get Dh400 million cash and Dh600 million woth of tradable securities; potential “collateral” to secure additional working capital, according to the research note.

Abu Dhabi government-owned Aabar Investments offered to buy 70 per cent of Arabtec through the purchase of mandatory convertible bonds. Arabtec said last month that the companies agreed to extend the due diligence process to April 16.

· abdulbasit@khaleejtimes.com