The ruler of Ras Al Khaimah has sold 30.5 per cent of the shares in RAK Ceramics, the world’s largest maker of ceramic tiles to the private equity company Samena Capital.
Cayman Islands-based Samena Limestone, a subsidiary of London, Dubai and Hong Kong-based Samena, has agreed to buy 250 million shares equating to 30.5 per cent of RAK Ceramics from RAK ruler Sheikh Saud bin Saqr Al Qasimi the company said in an announcement to the Abu Dhabi bourse on Tuesday.
RAK Ceramics did not give a value for the widely tipped deal, but based on a share price of Dh3.83 at close on Monday, the stake was worth around Dh957 million.
The company also did not say whether Sheikh Saud bin Saqr Al Qasimi, who is also the RAK Ceramics chairman, would continue to hold other stakes in the company. Before the deal he was believed to hold about 45 per cent of the company’s shares.
RAK Ceramics shares rose 4.4 per cent on the news to close at Dh4.
In March RAK Ceramics said it had hired Barclays and BNP Paribas to explore “a range of strategic alternatives and transactions”.
“RAK Ceramics is the biggest tile maker in the world so Samena Capital will be very fortunate to acquire it,” said Hettish Karmani, senior manager for research at Global Investment House. “Private equity companies are known for their value additions. Such a deal would enable the company to be much more actively managed by a proficient private equity company.”
Like many Middle Eastern companies connected with the construction industry, RAK Ceramics was hit by the global financial downturn.
However, full year profits rose 22 per cent last year – the largest jump since 2009 - to reach Dh272 million as the company benefited from a construction and property boom and from improved efficiencies at its factories.
The company plans to spend about Dh300m this year on expanding in India and Bangladesh and on upgrading its existing operations in Ras Al Khaimah – up from Dh115m the previous year.
While the UAE contributes a small portion of its sales revenues – almost 85 per cent of its sales come from outside the country – the company’s largest market is the Arabian Gulf, with Saudi Arabia taking a major chunk of production.
The private equity company Samena, which has about US$700m of assets under management, was established in 2008 by Shirish Saraf, a former managing director of Abraaj Capital.
The company whose board includes Sheikh Nawaf Al Thani, the chief executive of Qatari business conglomerate Nasser Bin Khaled Holding; Samir Fancy, the chairman of the Omani oil and gas company Renaissance Services; and Ziad Al Turki, a vice chairman of Saudi Arabia’s Atco Group, invests in assets in the Indian subcontinent, Asia, the Middle East and North Africa.
Samena declined to provide further information on the deal.
RAK Ceramics added that the deal was subject to the approval of the Abu Dhabi Securities & Commodities Authority.
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