Ducab has bought the United Kingdom-based AEI Cables, its first overseas manufacturing plant.
The Jebel Ali-based cable manufacturer yesterday confirmed reports in the UK this week that it had acquired the troubled AEI Cables, located in County Durham, north-east England.
Ducab will acquire all the manufacturing assets of AEI, along with a workforce of 200 people.
AEI entered a restructuring process through a company voluntary arrangement in 2011 after cash-flow problems, laying off 126 staff.
The sale was conducted through a “pre-pack” procedure, which resulted in AEI being put into administration immediately before being sold.
The deal, which allowed Ducab to acquire the company’s assets without being liable for creditor claims, was completed on February 28.
Neither company disclosed the size of the deal, although a source estimated that it was less than £10 million (Dh61.2m).
“AEI Cables is the right fit for what we see as the direction of the market — not just in the Middle East but beyond as well,” said Ducab’s chairman, Jamal Salem Al Dhaheri. “This is an especially strategic acquisition for Ducab, as we have seen the demand growing for specialist cables in the region. Through AEI Cables we will be able to fast-track the expertise development in our factories in the UAE.”
Ducab is jointly owned by Investment Corporation of Dubai, a sovereign wealth fund owned by the Dubai Government, and Senaat, an Abu Dhabi state-owned industrial holding company.
AEI, founded in 1929, claims to be one of the oldest cable manufacturers in the world. It was acquired by Paramount Communications of India in 2007.
Shortly afterwards the company reported shrinking revenues because of the collapse of the UK housebuilding market during the recession.
Paramount Communications put the company up for sale in December, according to the source. Five companies were approached to acquire AEI, with Ducab and an Italian firm the only parties to submit a bid.
“Our intention is to reinvigorate the operations at AEI Cables, and to expand both home and export sales,” said Ducab’s managing director, Andrew Shaw.
“The focus of the company will continue to be the manufacture of cables for the industrial sector, including defence, construction, rail and oil and gas, with particular emphasis on fire-performance products”, he said.
AEI’s clients include Britain’s Royal Navy and the London Underground transport network.
AEI did not respond to a request for comment.
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