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Aabar Investments

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Aabar Investments
Company typePrivate joint stock company (Government owned)
IndustryInvestments
Founded2005; 19 years ago (2005)
Headquarters
Abu Dhabi
,

United Arab Emirates
Key people
Khadem Al-Qubaisi, Chairman
Mohamed Badawy Al-Husseiny, CEO and Board Member
RevenueIncrease US$53.813 million (2009)
Increase US$432.636 million (2009)
Total assetsIncrease US$10.146 billion (2009)
Total equityIncrease US$3.446 billion (2009)
OwnerAbu Dhabi Government
Websitewww.aabar.com

Aabar Investments PJS (formerly Aabar Investments PJSC) is a private joint stock company registered and incorporated in Abu Dhabi, UAE. The company is engaged in investing activities in various industries including infrastructure, aviation, real estate, automotive, commodities, energy and financial services. Aabar was delisted from the Abu Dhabi Securities Exchange (ADX) effective 14 September 2010 and subsequently converted from a public joint stock company (PJSC) to a private joint stock company (PJS).

The company’s parent is the International Petroleum Investment Company (IPIC), which is wholly owned by the Government of Abu Dhabi. As per IPIC’s semi-annual financial statements, IPIC's ownership in Aabar stood at 95.52% as of 30 June 2012.[1]

Investments

Daimler AG

In March 2009, Daimler AG announced the sale of EUR 1.95 billion ($2.7 billion) of shares to Aabar. The investment company will buy 96.4 million new Daimler shares for EUR 20.27 apiece. After acquiring all new shares, Aabar will hold approximately 9.1% of the new share capital.

The future cooperation between Aabar and Daimler aims to create social and economic benefits for Abu Dhabi and the UAE. The partnership will focus on joint initiatives in the following areas:[2]

  • Electric vehicles with a particular focus on projects aiming at the reduction of CO2 emissions
  • Development and/or production of innovative compound materials to be used in automotive manufacturing
  • Social projects such as the establishment of a training center in Abu Dhabi to educate young talent for positions in the automotive industry

In May 2011, Aabar raised EUR 1.25 billion ($1.76 billion) of an unsecured exchangeable bond over Daimler shares that is due in 2016. Aabar had earlier launched a EUR 750 million ($1.06 billion) unsecured exchangeable bond but increased the size to EUR 1.25 billion following demand from investors during the book building phase. Aabar said its commitment to its investment in Daimler remained unchanged. Aabar will use the proceeds of the offering for general corporate purposes. Based on the increased issue size, the bonds will represent approximately 20 million Daimler shares, or 1.9% of the current total number of issued and outstanding shares.[3]

In October 2011, Aabar announced that its voting stake in Daimler fell just below 5% through an increase in the German automaker's share capital which was triggered by exercising stock options. But, Aabar said it remains fully committed to its position as anchor shareholder and stated that its total shareholding in Daimler still compares to the stake it bought in 2009.[4]

In October 2012, Daimler announced that Aabar had sold its 3.07% stake in the German carmaker when it had a market value of about EUR 1.25 billion ($1.6 billion). Aabar did not reveal the buyer nor the price at which the stake was sold. However, sources said that rather than selling the stake, Aabar had relinquished it to banks including Deutsche Bank and Goldman Sachs after failing to finance derivatives deals. The exit was not an outright stake sale that saw Aabar cash away its shareholding. The equity derivatives attached to the financing led to the stake being diluted. Aabar had entered derivative transactions, mainly collar trades and put options, to finance the acquisition.[5]

Falcon Private Bank

In April 2009, Aabar announced the completion of its acquisition of AIG Private Bank from its parent American International Group (AIG). AIG Private Bank will conduct its business under the new name Falcon Private Bank. The consideration payable for the entire share capital of AIG Private Bank is equal to CHF 288 million ($253 million). In addition, Aabar will assume certain loans outstanding in the amount of CHF 63 million ($55 million).

Falcon Private Bank is now an independent financial institution, wholly owned by Aabar, headquartered in Switzerland along with branches and representative offices in Geneva, London, Singapore, Abu Dhabi and Dubai. Aabar plans to grow the business with a particular focus on providing wealth management services to private clients, wealthy families and institutional investors in Switzerland, Asia and the Middle East.[6]

Tesla Motors

In July 2009, Aabar purchased 40% of the equity interest of Daimler AG in Tesla Motors Inc., a producer of electric vehicles. This investment allows Daimler and Aabar to leverage their shared interest in the development of low CO2 drive systems. In May 2009, Daimler acquired an equity interest of just under 10% in Tesla which is currently the only automobile producer marketing electric vehicles that are capable of operating over long distances. Daimler and Tesla have already agreed to cooperate on the integration of Tesla’s lithium-ion battery packs and charging electronics into the first 1,000 units of Daimler’s electric smart car. In order to benefit from each other’s know-how, the agreement reached in May 2011 was set to enable the two companies to collaborate more closely on the development of battery systems, electric drive systems and individual vehicle projects.[7]

Virgin Galactic

In July 2009, Aabar and Virgin Group announced that they had agreed to enter a strategic partnership which will see Aabar take an equity stake in the world’s first commercial spaceline – Virgin Galactic. To date, Virgin Galactic had been wholly owned and funded by Sir Richard Branson’s Virgin Group. Under the deal, Aabar will invest approximately $280 million and take a 31.8% stake in Virgin Galactic’s holding company, valuing the business at about $900 million. Additionally, Aabar has committed $100 million to fund a small satellite launch capability, subject to the development of a full business plan. It will also gain exclusive regional rights to host Virgin Galactic tourism and scientific research space flights. Aabar also has plans to build spaceport facilities in Abu Dhabi.[8]

In October 2011, Aabar boosted its stake in Virgin Galactic to 37.8% from 31.8%, according to the prospectus for a planned bond sale by Aabar's parent company, IPIC. Aabar invested an additional $110 million in Virgin Galactic in July 2011, boosting its stake by 6%.[9]

Mercedes-Benz Grand Prix

In November 2009, Aabar and Daimler AG acquired a majority shareholding in Brawn GP, winner of the 2009 Formula 1 constructors’ and drivers’ championships. Aabar together with Daimler acquired 75.1% of the Brawn GP team (Daimler holding 45.1%, Aabar holding 30%) with the balancing 24.9% stake remaining with the company’s existing owners under Ross Brawn, the principal. Brawn was renamed Mercedes Grand Prix.[10]

In February 2011, Mercedes completed their takeover of the rebranded Brawn GP team after its parent company Daimler acquired all remaining shares from team principal Ross Brawn and his management partners. In collaboration with its largest shareholder, Aabar, Daimler purchased the remaining 24.9% of the team. Daimler’s stake rose to 60% and Aabar's stake to 40% of Mercedes GP.[11]

In November 2012, it was announced that Daimler had bought Aabar’s remaining stake in Mercedes Grand Prix Ltd. giving the German luxury carmaker full control of the Mercedes Formula One motor racing team.[12]

XOJET

In February 2010, Aabar agreed to invest $20 million for shares in US aviation company XOJET Inc.; a private airline company that offers private jet services to business and leisure travelers in the United States and to various other destinations. Aabar and XOJET intend to create a UAE based joint venture company that will provide first class private aviation services to various destinations within the MENA region.[13]

Aabar Properties

Aabar Properties LLC, a subsidiary of Aabar Investments, was launched in 2010 as a real estate development, management and investment company. Aabar Properties is currently focused on supporting Abu Dhabi’s Vision 2030 by developing an extensive range of properties predominantly located in Abu Dhabi. Current projects include:[14]

  • Najmat
  • Al Durrah Tower
  • Saraya
  • Al Raha Beach
  • Maysan
  • Shams C12
  • Rawdhat C59
  • Rawdhat C69/77
  • IPIC Square
  • Hard Rock Hotel

The company also offers additional property-related services for its clients, including property sales & marketing, leasing & property management and facilities management.[citation needed]

In May 2012, Aabar signed a $2 billion (AED 7.34 billion) deal with China to develop 30 properties in Abu Dhabi. Industrial and Commercial Bank of China (ICBC) will provide Aabar with the funding, while China State Construction Engineering Corporation will be the contractor for the projects. According to the contract, the project involves building five-star hotels, office buildings and high-end apartments.[15]

UniCredit

In June 2010, Aabar bought a 4.99% stake in UniCredit SpA worth $2.48 billion, becoming the Italian bank’s second biggest shareholder. The investment is in line with the company's strategy to invest in financial services. It first invested in UniCredit, the biggest lender in Central and Eastern Europe, in the bank's 2008 capital increase through convertible bonds.[16]

In January 2012, Aabar entered into a series of transactions for the acquisition of subscription rights in additional shares in UniCredit which, upon completion of the capital increase, would lead to Aabar’s interest in UniCredit reaching approximately 6.5% on a fully diluted basis. Khadem Al-Qubaisi, Chairman of Aabar stated that the investment firm intends to remain one of the largest shareholders of UniCredit post its rights issue.[17]

Glencore

In May 2011, Aabar confirmed an investment of $850 million in Glencore International plc as a cornerstone investor with an intention to invest an additional $150 million in the Global Offer. Glencore is one of the world's leading integrated producers and marketers of commodities. The investment made Aabar the largest cornerstone investor in the IPO and the largest new shareholder of Glencore post its IPO giving the investment company a 1.4% stake. The two firms intend to explore areas of cooperation between them.[18]

RHB Capital

In June 2011, Abu Dhabi Commercial Bank (ADCB) and Aabar announced the execution of a binding agreement for the sale of ADCB’s 24.9% stake in RHB Capital Berhad (RHB) to Aabar at a per share price of MYR 10.80. Upon completion of the transaction, based on 31 March 2011 numbers, ADCB’s Tier 1 ratio increases by approximately 2.04% from 12.39% to 14.43% and total Capital Adequacy Ratio increases by approximately 4.08% from 17.03% to 21.11%. The purchase of this stake in RHB adds a core asset to Aabar’s financial services investments portfolio.[19]

Arabtec Holding

Aabar currently holds a 21.57% declared stake in Arabtec Holding having secured effective control of the Dubai-based construction firm. Despite only holding a minority stake, Aabar was able to secure management control of Arabtec in May 2012, when Khadem Al-Qubaisi was appointed Arabtec Chairman and four other Aabar executives were given positions on the company's nine-person board.

Aabar paid a total of AED 827.6 million for the 21.57% stake, according to a disclosure from Aabar's parent, IPIC. Though Aabar has declined to comment on its plans for Arabtec, analysts think it will use the company to execute construction projects in Aabar's home market of Abu Dhabi, where there are few domestic construction firms able to take on large-scale projects.

In its stake purchases, Aabar sidestepped market rules that require regular disclosure of any stake above 5% by acquiring its holding through a number of subsidiaries. This stirred controversy and served to further expose the absence of proper takeover and disclosure rules in the United Arab Emirates.[20]

Board of directors

Senior management

  • Andrew Thornber – Acting Chief Financial Officer
  • Khalifa Hamad Al Mehairi – Chief Executive Officer, Aabar Properties LLC
  • Anwar Atari – Chief Financial Officer, Aabar Properties LLC

References

  1. ^ Financial statement IPIC[dead link‍]
  2. ^ https://web.archive.org/web/20110820042740/http://www.aabar.com/index.php?option=com_content&view=article&id=129%3Adaimler-investment&catid=2%3Alatest-news&Itemid=8&lang=en. Archived from the original on 20 August 2011. Retrieved 26 November 2011. {{cite web}}: Missing or empty |title= (help); Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  3. ^ "Zawya". Zawya. Retrieved 7 December 2013.
  4. ^ [1][dead link‍]
  5. ^ "Exclusive: Derivatives led to Aabar ditching Daimler stake - sources". Reuters. Retrieved 7 December 2013.
  6. ^ https://web.archive.org/web/20110820040932/http://www.aabar.com/index.php?option=com_content&view=article&id=133%3Acompletion-of-the-acquisition-of-aig-private-bank-ltd-renamed-falcon-private-bank&catid=2%3Alatest-news&Itemid=8&lang=en. Archived from the original on 20 August 2011. Retrieved 26 November 2011. {{cite web}}: Missing or empty |title= (help); Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  7. ^ https://web.archive.org/web/20110820050738/http://www.aabar.com/index.php?option=com_content&view=article&id=135%3Adaimler-tesla-press-release&catid=2%3Alatest-news&Itemid=8&lang=en. Archived from the original on 20 August 2011. Retrieved 26 November 2011. {{cite web}}: Missing or empty |title= (help); Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  8. ^ [2] Archived 2011-10-09 at the Wayback Machine
  9. ^ [3][dead link‍]
  10. ^ https://web.archive.org/web/20110820053500/http://www.aabar.com/attachments/215_AABAR%20Ranger%20Main%20Press%20Release%20FINAL%20English.pdf. Archived from the original (PDF) on 20 August 2011. Retrieved 26 November 2011. {{cite web}}: Missing or empty |title= (help); Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  11. ^ "Mercedes completes Brawn GP takeover - CNN.com". Edition.cnn.com. Retrieved 7 December 2013.
  12. ^ "Zawya". Zawya. Retrieved 7 December 2013.
  13. ^ https://web.archive.org/web/20110820053327/http://www.aabar.com/attachments/10-Feb-AABAR%20PRESS%20RELEASE%20OCL%20-%20ENGLISH.pdf. Archived from the original (PDF) on 20 August 2011. Retrieved 26 November 2011. {{cite web}}: Missing or empty |title= (help); Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  14. ^ "Overview - Aabar Properties LLC". Aabarproperties.com. Retrieved 7 December 2013.
  15. ^ "Aabar signs $2bn deal with Chinese | The National". Thenational.ae. 10 May 2012. Retrieved 7 December 2013.
  16. ^ Walid, Tamara. "Abu Dhabi's Aabar buys UniCredit stake worth $2.5 billion". Reuters. Retrieved 7 December 2013.
  17. ^ https://web.archive.org/web/20121015113950/http://www.aabar.com/attachments/UinCredit%20Rights%20Issue%20FINAL%20Press%20Release%20Jan%2017th%202012.pdf. Archived from the original (PDF) on 15 October 2012. Retrieved 14 May 2012. {{cite web}}: Missing or empty |title= (help); Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  18. ^ https://web.archive.org/web/20110820035605/http://www.aabar.com/attachments/AABAR%20PRESS%20RELEASE%20-%20GLENCORE%20(final).pdf. Archived from the original (PDF) on 20 August 2011. Retrieved 26 November 2011. {{cite web}}: Missing or empty |title= (help); Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  19. ^ [4] Archived 2011-10-09 at the Wayback Machine
  20. ^ "Zawya". Zawya. Retrieved 7 December 2013.
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