ADCB to sell 80% stake in Abu Dhabi Commercial Properties and stands to gain $133m

Deal with Nine Yards Plus Holding values ADCP at $161m, the bank says

ADCB reported a 22 per cent increase in its third-quarter net profit. Khushnum Bhandari / The National
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Abu Dhabi Commercial Bank has agreed to divest an 80 per cent stake in Abu Dhabi Commercial Properties (ADCP) to Nine Yards Plus Holding, a subsidiary of Abu Dhabi-based Ethmar International Holding (EIH), the bank said on Thursday.

The UAE’s third-largest lender by assets had last month received a binding offer for a majority stake acquisition in ADCP from Nine Yards Plus.

The transaction values ADCP at Dh591 million ($161 million), ADCB said, adding that it will gain nearly Dh490 million ($133.4 million) subject to closing conditions before the end of December this year.

The bank will retain a 20 per cent stake in ADCP and will continue its partnership through a long-term relationship agreement.

The transaction unlocks “substantial value” for Abu Dhabi Commercial Bank shareholders “while ensuring that ADCP is well positioned to achieve further growth”, Ala’a Eraiqat, group chief executive of ADCB, said.

Established in January 2006, ADCP is the lender’s wholly owned property management services subsidiary, which manages approximately 51,000 units across 1,900 properties.

In 2019, Union National Bank’s Al Wifaq Properties and the real estate division of Al Hilal Bank were integrated into ADCP, enhancing its customer reach and offering a broader portfolio.

“ADCP will complement the ambition of Nine Yards Plus to be at the forefront of shaping future lifestyles in the UAE and wider region,” Ali El Gebely, managing director and group chief executive of EIH, said.

“We look forward to continuing our partnership with ADCB to further develop this platform to create further value and provide premium service to our clients.”

Nine Yards Plus is the real estate vertical of EIH, which operates in the property, energy, technology, alternative investments, hospitality, healthcare, travel and tourism, financial services, automotive and trading sectors.

Barclays Bank acted as the sole financial adviser to ADCB on the transaction, Deloitte advised on sell-side due diligence, and Clifford Chance acted as legal advisers to the lender.

ADCB reported a 22 per cent increase in its third-quarter net profit to Dh1.94 billion. Total net interest income – what banks earn from their lending activities minus the interest they pay to depositors – surged 28.6 per cent to Dh2.65 billion, while net income from Islamic financing and investing products rose 6.2 per cent to Dh531 million.

The bank had grown its assets by 7.8 per cent to nearly Dh537 billion at the end of September.

Updated: December 14, 2023, 3:16 PM