A recent deal has been the latest divestment by the government-owned group, Almatis (known to manufacture alumina products), to pay back its debts.
Dubai Holding’s private equity wing, Dubai International Capital (DIC), has broadcasted the sale of Almatis, the maker of alumina products, to Oyak, a pension fund based in Turkey.
DIC did not reveal the prices that the deal was closed on, but according to previous reports, there is speculation that Almatis might be getting $750 million from the potential sale. DIC officials were anticipating to get an even higher offer, according to industry courses by Reuters.
Since the deal, the Dubai International Capital’s CEO, David Smoot, has mentioned that the company was happy and pleased with the final outcome of the deal.
Almatis specializes in producing and manufacturing alumina products. It was bought by Dubai International Capital in 2007 for around $1.2 billion, from Phone Capital and Teachers’ Private Capital; this is known to be the private investment branch of the Ontario Teachers’ Pension Plan.
Conversely, the market meltdown has pushed the government-owned firms in Dubai, firms such as Dubai International Capital, to fall into innumerous debts that have mounted over the years. These debts have started to overtake profits and have brought about many losses. Dubai International Capital is in fact part of Sheikh Mohammed bin Rashid’s ventures and investments in Dubai.
In 2012, Dubai International Capital finished a $2.5 billion debt reformation deal and they have been divesting and selling off many of their assets in order to repay debts.
Just last year, Mauser, its German packaging company was sold at $1.72 billion just to repay some of its debts. Dubai International Capital has also taken back some of its stake in Holiday Inn Express, located in Manama.
Dubai’s International Capital has now been supposedly looking to sell off its British aerospace firm, called Doncasters. A final deal has not yet been announced.
Discussions and meetings to try and find sincere buyers for both Almatis and Doncasters began just last year. It is expected that a deal for both these firms will be finalized by this year.
Officials are noted to have previously mentioned how, apart from repaying debt, the cash coming in from such asset sales could also be expended to finance a few of Dubai Holding’s super projects and developments.