Abu Dhabi’s Eshraq Investments in ‘final stages’ to buy Goldilocks Fund

Eshraq announced plans in March to acquire 100% of Goldilocks to boost its assets

Abu Dhabi Global Market-domiciled Goldilocks has investments in a number of blue-chip companies across the Gulf region. Victor Besa / The National

Abu Dhabi-based Eshraq Investments is in the final stages of completing the acquisition of Goldilocks Fund through the issuance of new shares, as the company seeks to increase its profitability and boost growth.

Eshraq is in the process of reducing the share capital to Dh1.427 billion ($389 million) from Dh2.325bn to offset accumulated losses and is also working on the subsequent capital increase in exchange for the acquisition, it said in a statement on Monday.

“We are working diligently to complete the acquisition of the Goldilocks Fund,” Jassim Alseddiqi, Eshraq's chairman, said.

“In line with the mandate given by our shareholders, we have set the wheels in motion to strengthen the company's financial performance and improve operational efficiency.”

In March, Eshraq announced plans to acquire 100 per cent of Goldilocks Investment Company to increase its assets to more than Dh3.8bn.

As part of the transaction, Eshraq will issue new shares for Goldilocks investors in exchange for their shares in the investment fund, which is managed by Shuaa GMC, a unit of Dubai-based investment bank Shuaa Capital, it said at the time.

“We are optimistic that this acquisition will accelerate future growth opportunities and create long-term value for our shareholders,” Mr Alseddiqi said on Monday.

Abu Dhabi Global Market-domiciled Goldilocks has investments in a number of blue-chip companies across the Gulf region, including Dana Gas, GFH Financial Group, Salama and Takaful Emarat.

The fund is also an investor in companies such as music streaming platform Anghami, India’s largest EdTech unicorn Byju’s, Switzerland’s pharma tech company SkyCell and UAE’s Stanford Marine Group.

Eshraq, which has a portfolio of residential, hospitality and other property projects, reported a loss in the second quarter of 2022 as operating expenses as well as finance costs rose, despite a rise in revenue from commercial operations.

The company posted a loss of Dh7m in the three months to the end of June, it said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

Direct operating expenses during the period surged 78 per cent to Dh4.27m, while finance costs more than doubled to Dh2.57m.

Revenue from commercial operations rose 90 per cent to Dh9.28m.

For the six months to the end of June, the company reported a net profit of Dh7.29m, down 59 per cent year-on-year amid higher operating expenses and finance costs, it said.