Arabtec Holding is asking investors to swap a proposed cash dividend for bonus shares to help build a war chest aimed at propelling itself to claim a place among the world's 10 biggest builders.
The board of directors previously suggested a cash payout of 10 per cent in addition to 30 per cent as bonus shares for last year’s profit.
Hasan Ismaik, the chief executive of the Dubai-listed company, suggested the company pay a 40 per cent share dividend and no cash, subject to shareholder approval over the next 10 days.
“We want to be a big success story … To develop from a regional company to an international company operating under international regulations,” Mr Ismaik said.
“We’re asking you to support us and take a longer view on the company, and in the next two to four years you will profit incredibly. We want Arabtec to be a company that we can pass on to our children and the next generations.”
Market capitalisation for Arabtec, in which the Abu Dhabi state-controlled fund Aabar accumulated a 21 per cent stake in 2012, has surged to Dh28 billion from just over Dh2bn two years ago.
Since the acquisition by Aabar, Arabtec has evolved from being a Dubai-focused company to one that is being increasingly associated with Abu Dhabi, amassing a sizeable backlog from government contract wins in the capital. Net profit last year accelerated 171 per cent to Dh377 million.
At the annual general assembly held at the glitzy St Regis hotel on Abu Dhabi’s Corniche Road yesterday, the mood was party-like.
Investors, analysts and bankers walked in procession under crystal chandeliers at the luxury hotel’s ballroom.
“This is a wedding,” said Majd Maaiteh, National Bank of Abu Dhabi’s head of securities, as he lifted his hands in the air.
Arabtec was ranked 187th among 250 contractors by revenue globally in 2012, according to the website ENR.com. With Dh14bn worth of projects under construction, Mr Ismaik voiced ambitions for the firm to position itself among the top 50 to 70 companies this year, and among the top 10 companies by 2018 through mergers and acquisitions.
“There are only 30 international companies that are heavily focused on oil and gas and infrastructure,” Mr Ismaik said. “We are speaking to one of them. Once we reveal in due course, the name will surely surprise you,” the chief executive told attendees of the AGM.
If need be, Arabtec will raise financing 20 to 30 per cent of the acquisition price through convertible bonds or convertible sukuk, Mr Ismaik said. He would prefer investors such as funds or entities that would invest in the debt instrument and offer attractive opportunities in return.
The stock, which has more than trebled so far this year, fell 0.5 per cent to Dh8.95 yesterday.
halsayegh@thenational.ae
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