Wednesday, Mar 09, 2011
Targets holding company with emal to raise output to 2.5m tonnes
Dubai: Abu Dhabi-based Mubadala Development CompanyMubadala Development Company
has offered to buy shares in the state-owned industry giant Dubai Aluminium Company (Dubal)Dubai Aluminium Company (Dubal) to form a holding company that includes Emirates Aluminium Company (EmalEmirates Aluminium Company (Emal) and create a production capacity of 2.5 million tonnes annually, according to a top government official.
?Until now no percentage [of shares] was specified but I think it?s a good share,? Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Finance Minister and Chairman of DubalDubal, yesterday said at a press conference on DubalDubal?s annual results.
?They are not negotiations, but offers.?
DubalDubal is currently valued at $7 billion (Dh25.7 billion), according to Ahmad Humaid Al Tayer, Vice-Chairman of the company.
Dubai has been considering the possibility of selling some shares in its star assets and highly profitable companies during its debt restructuring plans. However, there are no current plans for DubalDubal to go public, Shaikh Hamdan said.
Commenting on MubadalaMubadala?s offer, Venkatesan Subramanian, Director of Metals and Minerals Practices at Frost & Sullivan, said: ?We feel it is a strategic move for Dubai to sell assets to their own country rather than neighbouring countries.?
MubadalaMubadala and DubalDubal together are 50 per cent shareholders in the joint venture of EmalEmal?s smelter development project in Al Taweelah area of Abu Dhabi.
One option is that the trio will form a holding company that aims to be the biggest aluminium and mining establishment in the world, said Al Tayer. ?We are researching how to create an economic entity for aluminium production with the size of the two companies.?
Indirect advantageIf MubadalaMubadala does acquire shares in DubalDubal, it will also indirectly own a greater stake in EmalEmal, making it the biggest shareholder in the new entity.
?MubadalaMubadala and DubalDubal continuously explore opportunities to expand their partnership in EmalEmal locally, regionally and internationally. These ongoing discussions have always been aimed at improving the scale and standing of our national aluminium industry on the global stage. We will update the market with material developments,? a MubadalaMubadala spokesperson said in an email statement to Gulf News.
Commenting on the MubadalaMubadala offer, Al Tayer said: ?The aim is that we are studying the strategic future of aluminium production,? he noted. ?There is a study on how to benefit from the two factories now in UAE: EmalEmal and DubalDubal. On this basis, we are thinking of how to create a company with a production capacity of 2.5 million tonnes approximately,? he said.
There is no final conclusion on the possibility of a merger between EmalEmal and DubalDubal but this is a a ?future strategy?, he added.
Subramanian said, ?MubadalaMubadala investment would provide necessary funds for DubalDubal?s value-added downstream product development which is vital to ME aluminium industry as it is exporting commodity [billets and ingots] to tune of 88 per cent.?
By Deena Kamel Yousef, Staff Reporter
� Gulf News 2011. All rights reserved.
Source: http://www.zawya.com/story.cfm/sidGN_09032011_100361/?relcontent=ZAWYA20110611081630
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