UK contractor agrees to sell its shares in Dubai-based joint venture companies to local partner
UK-based construction company Balfour Beatty has reached an agreement to sell its entire shareholding in the local/UK Dutco Balfour Beatty (DBB) and BK Gulf to the local Dutco Group for £11m ($13.8m).
The deal, which is subject to regulatory approval, involves Dutco assuming responsibility for Balfour Beattys guarantees of bonding obligations.
It has been reported that Balfour Beattys Middle East business had an operating margin of -17 per cent in 2016, and analysts say the move to exit the region will have a limited impact on the firms valuation and a positive impact on investors view of execution.
The deal was expected, and is part of Balfour Beattys strategy of exiting other international markets such as Indonesia and Australia so that it can focus on its chosen markets, in the UK, the US and the Far East.
Dutco Balfour Beatty has a long history in Dubai. It was formed in 1976, when Dubai Transport Company (Dutco) and Balfour Beatty teamed up for work on the Jebel Ali port. After the project was completed, DBB worked on several major schemes including: the Arrivals Terminal at Dubai International airport; the G station power and water desalination facility; Dubai Mall; various interchanges on Sheikh Zayed Road; and the Creek extension in Business Bay.
Balfour Beatty is the latest international contractor to say it will leave the region. Last year, South African contractor Murray & Roberts said it will no longer operate in the Middle East after completing its ongoing schemes.
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