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DIFCI sells IT companies

Investment arm of DIFC sells financial services software company and distributor, says analyst

DIFCI is thought to have sold SmartStream Technologies and distributor Despec International.
DIFCI is thought to have sold SmartStream Technologies and distributor Despec International.

DIFC Investments (DIFCI), the investment arm of the Dubai International Financial Centre, has apparently sold several IT-related businesses, according to a research note from JP Morgan.

The investment company, which has debt due, including a $1.25bn Islamic bond due in June, is thought to have sold SmartStream Technologies, at a loss of $68.8m.

SmartStream offers software and services to manage transaction processing in back and middle offices of investment banks and fund managers. DIFCI acquired the company in 2007, for around GBP200m ($410m), as part of its drive to increase its financial services capabilities.

DIFCI said in its 2011 financial statements that it had sold one of its discontinued businesses held-for-sale after the financial year ended to a 'related party', without naming the business.

"This sale could only be of SmartStream given the magnitude of impairment," JP Morgan analyst Zafar Nazim said in the note, adding that other businesses held for-sale by DIFCI had minimal associated goodwill balances.

DIFCI last year also sold IT distributor Despec International, for $27m.

SmartStream's parent company D-Clear, which is listed in the 2011 financial statement as 100 percent owned by DIFCI, was most likely disposed of during the early months of 2012, the analyst said.

Nazim also speculated that the ‘related party' could be the Dubai government or Investment Corporation of Dubai, the analyst said.