Mubadala considers listing divisions

15 September 2008
Abu Dhabi investment vehicle could float offshoots on local bourses to drive expansion plans.

State-owned Mubadala Development Company is to consider floating several of its divisions on UAE stock markets in the medium term as part of its expansion plans.

The developer, established by Emiri decree in October 2002, is one of the fastest growing and most acquisitive in the region.
Maurizio La Noce, executive director for energy and industry at Mubadala, tells MEED the company is aware of strong public interest for equity stakes.

“On selected-term businesses, that opportunity [to list] may materialise in the future,” he says.

While reluctant to predict which divisions may be floated on a local bourse, La Noce hints that some units may eventually be moulded to suit a stockmarket listing.

“Some may become pretty obvious as they progress,” he says. “In the medium to long term, there will be some serious discussion on that [listing] opportunity, but first of all we need to consolidate those businesses and make them extremely profitable.”

Formed as an offshoot of the UAE Offsets Group (UOG), Mubadala is Abu Dhabi’s third wholly state-owned investment vehicle after Abu Dhabi Investment Authority (Adia) and International Petroleum Investments Company (Ipic).

While the bulk of international companies are treading cautiously in terms of expansion, La Noce says Mubadala is seeking to accelerate investment in key sectors such as water treatment and aluminium production.

He says the company will unveil a “very aggressive” water strategy in the second week of October covering the Middle East and North Africa (Mena).

“It will position Mubadala as the number one [company] in the Mena region in water, wastewater and the sector’s related activities,” he adds.

La Noce is cautious about revealing details of specific projects Mubadala is pursuing, but maintains there is plenty of room in the market. “[The water sector] has led Mubadala to believe there are lots of opportunities in that space,” he says.

A similarly ambitious strategy for development of the aluminium industry will be unveiled before the end of the year, according to La Noce.

The company, which recently formed a joint venture engineering, procurement and construction (EPC) company, Petrofac Emirates, with UAE-based Petrofac, also plans to expand into the fiercely contested oil and gas sector.

La Noce says Mubadala has been eager to enter the EPC field as a means of backing up its other ambitions and ventures in the sector. “Mubadala has been wanting to do this for quite some time,” he says. “The market for this company is Abu Dhabi, but it will also look regionally and internationally in the future.”

As part of the joint venture deal, Petrofac will assign a management and engineering team to the new company and help it to establish an engineering centre.

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