Asmak casts net beyond fish farms

Asmak Fish Farm Holding Company has moved even further away from its eponymous business and bought a property company.

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The country's only publicly traded fish farming business is casting its net wider in a bid to lure property investors.

The International Fish Farming Holding Company, better known as Asmak, yesterday said it had bought Abu Dhabi Land Contracting Group from Royal Group, the same Abu Dhabi holding company that lent Asmak Dh420 million (US$114.34m) in December through a bond issuance. The value of the transaction announced yesterday was not disclosed.

An Asmak spokesman said the move was part of the company's attempts to diversify into other sectors to provide more consistent profits.

Mohammed Helal al Muhairi, a vice chairman of Asmak, said last month in an interview: "Our strategy is to expand what we are already doing - aquaculture and fisheries - but also to expand into new areas so we can obtain sustainable profit for our shareholders".

The funds obtained in exchange for a two-year convertible bond issued to Royal Group were to be used to buy more companies across the region, he said.

Asmak has all but ceased its fish-farming business after stocks were devastated by so-called red tides, epidemics of oxygen-depleting algae in the sea. The company now focuses on sourcing fish from around the world for local supermarkets, although there are plans to revive fish-farming operations, according to executives.

Abu Dhabi Land is one of eight design and construction companies under Royal Group and focuses on construction, landscaping, infrastructure and labour camp management, according to a statement on the Abu Dhabi Securities Exchange yesterday.

The company has done coastal protection work on the Marina Square project on Reem Island, as well as dredging and land reclamation work on the nearby Dolphin Island.

Royal Group is already indirectly the largest shareholder in Asmak through its property company Hydra Properties, which has a 47 per cent stake.

In early 2008, Asmak created a subsidiary called Emirates Stallions Properties, which was to take advantage of the then rapid rise in property prices.

Soon after issuing a Dh140m bond to Hydra Properties, Asmak spent Dh140m on four plots of land on Abu Dhabi island and paid Dh35m on other property, which is not yet fully paid up, according to financial records. The bond converted into shares of Asmak.

The company bought some of the property from Hydra Properties, according to a source familiar with the transactions.