Aabar, an investment company based in Abu Dhabi, has secured a US$1.63 billion (Dh5.98bn) bridging loan to help shore up its finances. The loan comes on top of $11.9bn in existing loans, the bulk of which the company has raised this year. Most of that matures next year and in 2012. "They must have their reasons for going down that route," said Chavan Bhogaita, the head of credit research at National Bank of Abu Dhabi. "Perhaps they have a bond in the pipeline for a different project or for another time."
Khadem Abdulla al Qubaisi, the chairman of Aabar, said earlier this month the company planned to raise its 9.1 per cent stake in Daimler to 15 per cent. At the same time. Daimler and Aabar said they would pay £110 million (Dh672.1m) to buy 75.1 per cent of the Brawn Grand Prix racing team, which won this year's Formula One drivers and constructors championships. Aabar, which was initially set up to invest in oil and gas, also bought a 32 per cent stake in the Virgin Galactic space tourism company earlier this year. Some observers said getting a loan was easier for the company than going into the debt market, where it has no established pedigree.
"They lack a track record" in bonds, said a banker who asked not to be named. "They have no investment thesis and cannot tell bond investors what they would be lending for. In order to issue a bond, they would have to do the legwork and have to focus." The latest loan comes after the global financial crisis significantly slowed the appetite of banks to lend. Such caution has been particularly pronounced in the UAE, which has suffered from an exodus of foreign capital in the aftermath of the collapse of Lehman Brothers last year.
The dearth of liquidity has also coincided with increased capital adequacy demands from the Central Bank. Lending has also slowed this year with Middle East companies, most of which are from the Gulf region, taking out about $45bn in fresh loans. That compares with $70bn last year and $120bn in 2007. Aabar, which is 71 per cent owned by the Abu Dhabi Government's International Petroleum Investment Company, said yesterday in a statement to the Abu Dhabi bourse that it would use the six-month loan "for general corporate purposes".
Aabar shares rose 5 fils to Dh2.31 on the Abu Dhabi Securities Exchange yesterday, valuing the company at Dh7.22bn, Bloomberg data showed. @Email:email@example.com