Bloomberg News

Abraaj Expects to Sell Three Investments Before End of 2012

October 17, 2011

(Updates with executive’s comment in third paragraph.)

Oct. 17 (Bloomberg) -- Abraaj Capital Ltd., a Dubai-based private-equity firm that oversees about $6.2 billion, plans to sell two or three investments before the end of 2012, its first disposals since the collapse of Lehman Brothers Holdings Inc.

“Several of our companies are going through an exit mode,” senior partner Matteo Stefanel told reporters at the Super Return Middle East 2011 conference in Dubai today. The company has had interest from buyers including corporate and private-equity firms, he said. The firm also expects to make one or two acquisitions this year, each with a value of $100 million to $200 million, he said.

Abraaj’s last disposal was the sale of its 30 percent stake in National Air Services Co., a Saudi Arabia-based airline and aircraft management company, to Prince Alwaleed Bin Talal’s Kingdom Holding Co. for 1.17 billion riyals ($312 million) in June 2008. The firm hired Merrill Lynch & Co. and Goldman Sachs Group Inc. four months ago to oversee a potential sale of its stake in Acibadem Holding AS, a Turkish hospital chain.

Buyout firms have struggled to sell assets after the collapse of Lehman in 2008 roiled markets worldwide, forcing companies to delay acquisition plans. The turmoil also cut off the supply of loans firms use to finance acquisitions, stopping private-equity firms from buying assets from each other.

‘New Normal’

Abraaj is evaluating about 40 potential acquisitions in industries from oil and gas service to financial institutions and logistics, Stefanel said. There are attractive opportunities in Indonesia and Malaysia and sub-Saharan Africa, he added.

“Certain levels of volatility in today’s economy and even in the region are ultimately not just acceptable -- but they are the new normal,” Stefanel said. There is “less fear of the future, but there is a more cautious approach to investing.”

Abraaj took control in August of the $161 million North African private-equity fund of Amundi, the French asset manager jointly owned by Societe Generale SA and Credit Agricole SA. It also bought a 49 percent stake in Network International LLC the credit card processing unit of Emirates NBD PJSC, Dubai’s biggest bank, for 1.98 billion dirhams in April.

Network, which provides card payment services, serves about 70 banks and financial firms in the Middle East and Africa and more than 17,000 retailers. The firm’s installations are increasing by 20 percent a year and Abraaj expects to reap three times its original investment within five years, Stefanel said.

Abraaj expects to close its fourth buyout fund at $2 billion “soon” after raising a little more than $1 billion at its first close, Stefanel said.

--Editors: Edward Evans, Steve Bailey.

To contact the reporters on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


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