Arabtec's 1.56 billion new shares start trading today

Dubai contractor issued the shares to investors at Dh1.50 each in a rights issue that was nearly 30 per cent oversubscribed.

The rights issue is part of a wider capital-raising for Arabtec, which aims to raise a total of up to Dh4.7bn over the next five years. Pawan Singh / The National

An extra 1.56 billion new Arabtec shares start trading today as the Dubai-based contractor hailed its Dh2.4 billion cash call a success.

Arabtec issued the shares to investors at Dh1.50 each in a rights issue that was nearly 30 per cent oversubscribed with some Dh700 million in excess funds and interest returned to subscribed shareholders.

The shares have now been "allotted" to subscribers to the issue, Arabtec said yesterday.

The new shares were issued at substantially below the current market rate, which at close of trading in Dubai on Thursday stood at Dh2.25 each. Since the start of the year, Arabtec shares have risen by 13 per cent but are down 11 per cent from their high on February 25. The UAE's biggest construction company, which is 21 per cent owned by the Abu Dhabi investment fund Aabar, said it would use the cash injection to implement its ambitious five-year growth strategy announced earlier this year to expand the company into new high margin sectors such as building oil and gas infrastructure and to reduce its dependence on the cyclical Dubai construction market.

Arabtec, like other construction companies in the Emirates, was hit hard by the 2008 Dubai property crisis that stalled many of the major housing and office projects it was working on.

The company, which has 63,000 employees, is currently in the process of forming a new joint venture, Arabtec-Samsung Engineering, with the South Korean multinational conglomerate Samsung. The new venture plans to bid for major contracts in oil and gas, power and related infrastructure.

The rights issue is part of a wider capital-raising for Arabtec, which aims to raise a total of up to Dh4.7bn over the next five years. A second rights issue for a further Dh2.4bn if necessary has been planned for early next year. The company is also considering a Dh1.6bn non-convertible bond issue that could take place, again if needed, over the coming year.

"I am extremely pleased with the conclusion of our rights issue process, which was a true success with the vast majority of our existing shareholders subscribing, and an indication of trust from our shareholders in the company's future," said Hasan Ismaik, the managing director and chief executive of Arabtec. "We are now ready to accelerate the implementation of our growth strategy."

Arabtec said that so far this year it had been awarded projects with a gross value of Dh13bn in the Middle East, North Africa and Central Asia.

These included the prestigious Dh2.4bn order to build the Louvre museum on Abu Dhabi's Saadiyat Island on behalf of Abu Dhabi's Tourism Development and Investment Company, and a Dh4bn contract to build a 500,000 square metre hotel, shopping and housing project in Astana, Kazakhstan, on behalf of Aldar.