Al Jaber Group is preparing to sell a transport and lifting subsidiary two months after concluding a deal to restructure its multibillion dollar debt pile.
The Abu Dhabi company, with interests in construction, engineering and marine services, has hired Barclays to find buyers for the unit, Al Jaber Heavy Lift, a person familiar with the situation who spoke on condition of anonymity said.
The unit is worth US$500 million to $1 billion, according to Bloomberg News, which first reported the sale, citing two sources. No one at Barclays or Al Jaber Group was able to comment.
In June, Al Jaber concluded a debt restructuring deal with its creditors after more than three years of negotiations. The group has not divulged the size of the restructuring, but bankers have said it is to the tune of US$4.5bn.
Al Jaber is one of the biggest industrial groups in the UAE, employing more than 50,000 people. Like many UAE firms that were overextended with debt, it got into financial trouble in the aftermath of the financial crisis of 2008, and in 2010 it was unable to meet some repayment terms on loans.
The negotiations were complicated by the existence of different types of debt – secured and unsecured – which increased the overall liabilities of the group.
There were also big losses related to foreign currency hedging, especially relating to the Japanese yen, which fluctuated greatly following the 2011 earthquake, soon after restructuring talks began.
Creditors include National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, HSBC, Royal Bank of Scotland and Union National Bank.
The deal with creditors has allowed Al Jaber to reopen credit lines and bid again for big contracts. Government contracts in the region dried up following the global financial crisis but have kickstarted again.
Last year, Al Jaber won a Dh1.8bn contract to build luxury villas on Saadiyat Island in the UAE capital, an important indication that its financial condition is recovering.
Its restructuring is another sign that UAE companies have put their debt issues behind them as the country’s economy rebounded last year, growing by more than 4 per cent.
Earlier this year, a unit of Dubai Holding settled with creditors, including the Dubai Government, over $10bn of liabilities. That has helped to boost confidence in UAE stocks, bonds and property, all of which have recovered from the 2009 debt crisis.
Moody’s Investors Services, the credit rating agency, had said that this year would be a “pivotal” one for the country’s financial policymakers, with some $22bn of debt maturing, including $20bn loaned to Dubai by Abu Dhabi entities at the height of the financial crisis, which has now been rolled over at reduced rates.
mkassem@thenational.ae
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