Dubai Holding mulls partial sell-off

GOVERNMENT-owned investment vehicle, Dubai Holding is drawing up plans to float some of its subsidiaries in two years’ time, Arabian Business can reveal.

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By  Anil Bhoyrul and Richard Agnew Published  June 12, 2005

GOVERNMENT-owned investment vehicle, Dubai Holding is drawing up plans to float some of its subsidiaries in two years’ time, Arabian Business can reveal. A senior source within the group said that it aims to offer shares in at least two of its multi-billion dollar leisure developments, industry clusters or other divisions, which include Dubailand, Business Bay, Media City and Internet City. Analysts said the company would see a partial initial public offering (IPO) of the investments as an opportunity to fuel further expansion of its portfolio of developments, after recently securing stakes in multinational companies such as DaimlerChrysler and The Tussauds Group. “An IPO (initial public offering) in a couple of years would make sense,” said Joe Kawkabani, a senior analyst at Shuaa Capital, the Dubai-based investment bank. “Dubai Holding is creating a big brand which it will manage, develop and use to acquire more businesses. It will grow the business and then sell part of it to the public,” he added. A spokesperson for the group declined to comment on the move or which subsidiaries it is likely to float first. After being formed in October last year, Dubai Holding has embarked on an acquisition spree aimed at rapidly expanding its reach internationally. In March, Dubai International Capital, a subsidiary of the firm, announced a US$1.4 billion agreement to buy The Tussauds Group, the largest operator of visitor attractions in Europe. Another division, Dubai International Properties, recently announced investments totalling over US$1 billion to develop a tourist resort in Oman and a high-rise commercial and residential complex in Qatar. The expansion also continued last week with the announcement of the creation of Dubai Energy, a unit designed to spearhead investments in the regional and global energy market. To be headed by former ConocoPhillips executive, Ahmad Sharaf, the company plans to invest in foreign oil and gas ventures and build a diversified global portfolio of investments. One of its first agreements is expected to be a joint venture with the New York Mercantile Exchange. Sharaf is currently chief executive of energy at Dubai Development and Investment Authority (DDIA), a government investment promotion body closely linked to Dubai Holding. DDIA has negotiated Dubai’s deal with Nymex, the world’s largest energy exchange. “The company is actively evaluating key oil and gas prospects with leading international companies and screening potential equity investments in the broad energy sector,” said a Dubai Holding spokesman. “During the past few years, the energy sector has undergone major changes while creating opportunities previously inconceivable. Volatile energy prices, insatiable demand, evolving players, and increasing capital requirements have opened the window of prospects for uniquely positioned entrants. Dubai Energy, located at the cross-roads of the region’s oil and gas reserves, will capitalise on these opportunities," he added.

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