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MANAMA- Bahrain's sovereign wealth fund Mumtalakat plans to finance its projects this year using income from investments and will not seek loans or government assistance, its chief executive said.
"We have no intention of borrowing this year, and are working to reduce the accumulated debt. The company borrowed large amounts up to the end of 2015 to fund its projects," Bahrain Mumtalakat Holding Company CEO Mahmoud Alkooheji told Zawya.
The company signed a $500 million, five-year revolving credit facility in December 2014. "It (the facility) was fully used in 2015 to refinance outstanding debt," he said without providing further details.
Mumtalakat reported a 68.7 percent drop in net profit in 2015 to $76.3 million against $243.6 million the previous year, citing "impairment losses recognized on goodwill" according to published financial statements. Operating income for 2015 rose to $330.9 million from $300.8 million in 2014, largely as a result of improved operating performance for Gulf Air.
The fund holds stakes in major Bahraini companies including Aluminium Bahrain and Batelco but has been increasing overseas investments as it moves to diversify.
"This year, we will not depend on government assistance to finance our projects; we will rely on our own resources through return on investments," Alkooheji said, adding that the firm had no plans to privatise any assets.
Bahrain projects moving ahead
Alkooheji said that three recent acquisitions would help boost revenues for 2016. The firm bought a 10 percent equity stake in Kuwait-based industrial gas manufacturer Gulf Cryo, a 49 percent stake in Spanish aluminium grain refiner Asturiana de Aleaciones and an interest in a commercial real estate portfolio in the United States, which Alkooheji said is valued at $250 million.
The chief executive officer said Mumtalakat was moving ahead with three hotel projects in Bahrain:The Fairmont Bahrain Resort in Al Jazayer area, Al Sahel Resort and a luxury waterfront resort in Durrat Al Bahrain.
Last November, Mumtalakat signed a joint venture agreement with India's Synergies Casting to establish an aluminium casting and specialty alloy wheel manufacturing facility in Bahrain. It also plans to build a copper manufacturing facility in the Gulf Arab state.
Alkooheji said Mumtalakat was planning other real estate projects in Bahrain as well as a project outside the country, but declined to give any details.
© Zawya 2016
