x Abu Dhabi, UAESaturday 25 November 2017

ASGC recruits former Kier boss to target British government project cash

Contractor sets up new division to work with British suppliers 

Dubai-based builder Al Shafar General Contracting (ASGC) has recruited the former head of UK contractor Kier Group’s Middle East operations to lead a new business unit that will offer clients the opportunity to fund schemes through a British government initiative.

Paul Woodman, the former executive managing director of Kier Middle East, was made managing director of ASGC UK – a new business unit set up by the contractor this month.

Mr Woodman has secured UK Export Finance for several projects in the past – both for Kier and for his previous employer, Carillion. He has secured a number of substantial funding deals from UK Export Finance (UKEF) for projects built for the Dubai-based developer Meraas Holding – including a US$317.9 million loan for its Bluewaters project and a $220m loan to fund the new Dubai Arena near the City Walks development.

Both of these projects have been delivered by Kier in partnership with ASGC.

“One of the things that is obviously an issue in this region is funding, and top-notch clients are in search for funding,” said Bishoy Azmy, the chief executive of ASGC.

“So we’ve set up ASGC UK to enhance our ability in providing funding to projects that qualify under UKEF and to expand the business relationships we have here and the UK, so it also helps us ensure stronger procurement through UK suppliers because that is an essential part of UKEF.

“Paul is very well-versed in that. It is what he has been doing for over a decade.”

To date Kier and Carillion have been the two main recipients of UK Export Funding for projects in Dubai. This month the UK’s international trade minister Liam Fox said UK Export Finance was providing more than $600m to support three major projects being delivered by the pair. This includes the $220m loan for the Dubai Arena, a $235m Kier project for Nshama that will involve staff accommodation being built for employees of Emaar Properties, and a $180m package for Carillion’s joint venture Al Futtaim Carillion to build two towers at the Dubai Trade Centre District.

UK Export Finance has also previously provided a letter of intent to bosses at Al Maktoum International Airport to provide up to $2 billion in funding for major contract packages relating to the expansion of the airport, and last December Reuters reported that the organisation was putting together a $7bn package alongside HSBC to help fund contracts with British involvement at the Expo 2020 site.

Yet the number of British firms capable of delivering large-scale packages is not substantial.

When it submitted its letter of intent to provide funding for Al Maktoum Airport, UKEF listed five British contractors it was supporting – Balfour Beatty, Carillion, Kier, Laing O’Rourke and Interserve . Since then, however, Balfour Beatty announced in February this year that it had sold its stake in its UAE joint venture to its partner Dutco.

Carillion, meanwhile, is facing a cash crisis. Yesterday, it appointed accountancy firm EY to undertake a strategic review of the company and its capital structure, which will involve it taking “immediate action to generate significant cash flow in the short term”.

The company is withdrawing from Egypt, Qatar and Saudi Arabia, as well as selling a 50 per cent stake in its Carillion Alawi joint venture in Oman – for which it has received an immediate £12.8m (Dh61.5m) in cash. It said it expects to raise a further £125m over the next 12 months through disposals from exiting non-core markets and geographies.

When asked about proposals for its UAE business yesterday, a spokesman said that Carillion is continuing to target new work both in the UAE and Oman , but only where it can gain the support of UK Export Finance.