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Moody’s Urged to Reconsider Downgrades of Abu Dhabi Firms

ABU DHABI — Abu Dhabi has asked the Moody’s Investors Service to reconsider its decision to downgrade six state-linked companies, a top official said on Tuesday.

“The government is fully behind its fast growing companies, as the Department of Finance also issued a statement reassuring the financial markets, soon after the downgrade action by the rating agency, said Mohamed Omar Abdullah, Director-General of the Department of Economic Development Abu Dhabi.

Addressing an investment conference in the capital, he said that the firms were showing strong financial performance, as Mubadala’s assets grew 75 per cent, revenues doubled in 2009.

Speaking at the third UAE Global Investment Forum, organised by Institutional Investor magazine, he said that rating agency should take a ‘proactive’ view.

Fahad Saeed Al Raqbani, Deputy Director-General of the Abu Dhabi Council for Economic Development, said: “If they want to do business, they have to reconsider the way to do business.”

Early this month, Moody’s downgraded six companies including Mubadala, Abu Dhabi National Energy Company, TDIC, Aldar, Dolphin Energy and IPIC.

Asked if the companies are looking to cut their ties with Moody’s or other ratings agencies, Raqbani said the companies will look at their relationship “very seriously.”

Investment Promotion Agency

Earlier, while addressing the Forum, Abdullah said that Abu Dhabi is in process to setting up an investment promotion agency to promote the emirate as a destination to attract investment in logistics, petrochemicals, heavy industries and other sectors.

“In line with our five-year strategic plan, the Department of Economic Development is working towards setting up a dedicated investment agency to serve the needs of international investors,” said Abdullah.

The new agency will begin operations by the end of 2010 and will identify areas of opportunities to attract foreign investments, he said.

“International investors have a crucial role to play bringing in expertise, technology and best global practices,” he told the conference.

Foreign Ownership Rules

The director-general said the Ministry of Economy was preparing the final draft of a new UAE companies law to relax foreign ownership rules. Under present ownership rules foreign investors can own 100 per cent in a company in a free zone, but outside the zones they can own a minority shareholding of 49 per cent.

He didn’t comment on what the new ownership level will be for the foreign investors.

He said that the UAE has taken important steps to deal with economic opportunities and challenges in present challenging environment.

· haseeb@khaleejtimes.com