x Abu Dhabi, UAEWednesday 17 January 2018

Mubadala seeks to increase stake in home lender

Investment arm of the Abu Dhabi Government is in talks with its joint shareholders of Abu Dhabi Finance to increase its ownership stake to 52 per cent,

ABU DHABI // Mubadala Development, the investment arm of the Abu Dhabi Government, is in talks with its joint shareholders of Abu Dhabi Finance to increase its ownership stake to 52 per cent, a spokeswoman said. Under the current plans, Mubadala would take over the full 20 per cent shareholding of the Tourism Development and Investment Company (TDIC), as well as portions of the stakes held by Abu Dhabi Commercial Bank, Aldar Properties and Sorouh Real Estate, the Mubadala spokeswoman said.

Lee Tabler, the chief executive of TDIC, confirmed the discussions over the stake "were ongoing". Abu Dhabi Finance, a new mortgage provider focusing initially on properties in Abu Dhabi, was started last November with capital contributions totalling Dh500 million (US$136.1m) by the five investors, which means Mubadala's additional 32 per cent stake could be worth Dh160m at its original value. Mubadala would not provide details of the deal.

Mubadala said it wanted to increase its ownership to a majority stake to help the company become a "major player in the emirate", the spokeswoman said. "In our role as developers of businesses and industries which drive the sustainable growth of the Abu Dhabi economy, we believe we can bring even greater value to Abu Dhabi Finance as a majority shareholder, helping the company to build upon its successful start to become the major player in mortgage finance in the emirate," she said.

Mubadala said the acquisition was "purely a shareholding issue and will have no effect on the strategic partnerships Abu Dhabi Finance has developed with the three real estate developers". Abu Dhabi Finance has been filling the gaps in financing created by the credit crisis, analysts said. While other major lenders, such as Amlak Finance and Tamweel, have frozen lending, Abu Dhabi Finance has been adding new projects each month.

Most recently, it announced a deal with Sorouh to provide mortgages for 1,200 homes in four projects. The loans will include 7.24 per cent interest rates for up to 85 per cent of the cost of the property. Executives at Abu Dhabi Finance said they supported the change in shareholding. "Mubadala's role as a catalyst to help Abu Dhabi diversify and transform its economy means it can play an important part in helping our business develop even further," a spokesman said. @Email:bhope@thenational.ae