Aabar investors cheered two pieces of good news that helped the investment company's shares end a losing streak yesterday. Aabar had surprised the market last month by announcing its plans to delist from the Abu Dhabi Securities Exchange and transfer its shares to the over-the-counter market. However, a source said over the weekend that the Emirates Securities and Commodities Authority (SCA) was researching options that would require Aabar to buy out the minority shareholders.
The options include having the shares valued according to their trading ranges in recent months or having a third party determine a fair value. SCA did not respond to requests for comment, but traders and analysts viewed the news as a good sign for shareholders. "Obviously it's a big thing for investors. It is encouraging that the company may buy back the shares," said Chahir Hosni, the equities sales manager at EFG-Hermes in Dubai.
For him, "the element of risk remains" as there is still no clear guidance from the company or the regulator. "What is good is that at least they are looking at the buy-back option. Further guidance on the issue will certainly help," he said. Aabar shares have taken a battering since announcing the delisting plans and last week lost 15.3 per cent of their value. They yesterday closed 3.4 per cent higher at Dh1.49 after rising as much as 6.2 per cent during trading.
The investment firm also launched the syndication of a US$2 billion loan, Reuters reported on Friday, citing bankers close to the deal. The deal is split between a $1.4bn term loan and a $600 million revolving facility. The loan is being managed by Deutsche Bank, Morgan Stanley, National Bank of Abu Dhabi, Royal Bank of Scotland, Credit Suisse and Union National Bank. For investors the deal was read as a sign that the company, which is more than 70 per cent held by the Abu Dhabi Government-owned International Petroleum Investment Company, is getting a good response from the lenders despite difficult conditions in the debt markets.