United Power stake for Mubadala GE

Mubadala GE Capital has acquired a 16 per cent stake in an Omani power generation company, according to an announcement.

Mubadala GE Capital has acquired a 16 per cent stake in an Omani power generation company, according to an announcement yesterday on the Muscat Securities Market website.

Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, teamed up with General Electric (GE) to start Mubadala GE Capital last year.

Mubadala and GE agreed to contribute US$4 billion (Dh14.69bn) each to the venture, which aims to provide loans to medium-sized businesses to finance their growth.

United Power, a listed Omani power-generation company established in 1994, is worth about $40 million, according to Bloomberg data. Mubadala GE Capital acquired its 16.4 per cent stake by buying preferred shares from three of the company's shareholders - National Trading Company, W J Towell and Zubair Corporation - said the company.

"As a result of the transaction, the existing business of the company shall not be affected," said United Power.

Oman's Authority of Electricity Regulation has already approved the transaction, the company said, adding that it expected the deal to be completed by the end of the year.

The acquisition may be linked to Mubadala GE Capital's financing activities. A spokeswoman for the joint venture did not respond to a request for comment.

Mubadala and GE announced the commercial finance partnership in May last year. In addition to a contribution of $8bn of equity to the venture from both sides, Mubadala announced it was aiming to become one of the US industrial giant's largest shareholders. Mubadala is currently close to being one of GE's top 10 owners.

Since receiving a Central Bank licence this year, Mubadala GE Capital has participated in dozens of deals, arranging financing worth about $2bn. Most of the transactions have been co-investments with GE Capital in Europe and the US. This is part of a strategy to get the venture off the ground through experience in the power, oil and gas, water and other industries as its activities shift gradually towards the Gulf.

Mubadala GE Capital has begun to do some business in the region, arranging loans for companies in the Gulf, executives said last week at an update on the project.

United Power said in its statement yesterday that Mubadala GE Capital acquired its shares through its MGEC Holdings subsidiary in Oman.

The deal follows the purchase last year of a 32.8 per cent stake of the company by MENA Infrastructure Investments that was meant "to ensure continued availability of the necessary technical and operational expertise" to run its electricity generation capabilities.



Published: December 21, 2010 04:00 AM


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