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Abraaj Real Estate Fund completes Arabtec exit

Abraaj Capital, which specialises in private equity investment in the Middle East, North Africa and South Asia, has sold its stake in Arabtec Holding, a UAE-based construction contracting

Abraaj Capital, which specialises in private equity investment in the Middle East, North Africa and South Asia, has sold its stake in Arabtec Holding, a UAE-based construction contracting firm, via the Dubai Financial Market, generating an internal rate of return of 116 per cent and returning 12 times the invested capital.

The acquisition of its stake in Arabtec was made by the Abraaj Real Estate Fund (AREF) in 2004. With this first exit for AREF, approximately half of the original capital of the fund has been returned with the remaining assets in the fund continuing to perform extremely well.

Known as the Arab Technical Construction Company when the company was founded in 1975, the firm was established as a public joint stock company in 2004, formed to invest in and acquire companies in the UAE’s construction and contracting sector. The company’s shares were listed on the DFM in January 2005.

‘The Arabtec exit by the Abraaj Real Estate Fund marks the end of the holding period and natural conclusion of the investment cycle for this investment,’ says Arif Naqvi, vice-chairman and chief executive of Abraaj Capital. ‘We are extremely pleased to have made a significant contribution to the success of Arabtec and, of course, to be able to continue to generate such strong returns for our investors.

‘The performance of Arabtec continues to exceed analyst expectations. During the first half of this year alone, Arabtec was awarded five contracts worth Dhs3.6bn, including its first project outside the UAE. As Arabtec continues to move from strength to strength, we remain confident of its ongoing successful expansion.’

Riad Kamal, chief executive of Arabtec, adds: ‘The construction sector is experiencing unprecedented growth across the region, and Arabtec will remain at the forefront of this expansion. Today, Arabtec has firmly established its reputation as one of the region’s leading construction companies, providing high-quality work, on time and within budget. There is no question that the strategic support provided by Abraaj Capital over the past three years has proved critical to our success. We remain grateful to Abraaj Capital for their significant contribution to Arabtec’s sustained growth and successful regional expansion.’

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