Thursday, Jun 14, 2012
DUBAI (Zawya Dow Jones)--The International Petroleum Investment Company, or IPIC, an Abu Dhabi government-owned vehicle, said Thursday it took fair-value losses of $3.42 billion last year on investments in German car maker Daimler and Italy's Unicredit.
IPIC reported the losses in financial statements posted on London Stock Exchange. Through its Aabar Investments subsidiary, IPIC owns 4.99% of Unicredit, an Italian bank, and 9.1% of Daimler, one of the world's largest car makers.
Aabar bought its Unicredit stake in 2010, when it was worth around $2.3 billion. It paid $2.7 billion for the Daimler stake in 2009.
Daimler's shares fell by 33% in 2011, leaving the company with a $2.25 billion fair value loss. Losses on the Unicredit stake last year amounted to $1.17 billion.
The price drops were offset somewhat by derivatives contracts that limit Aabar's upside but also protect it partially from severe downturns.
"As a diversified investment holding company, Aabar's investments were subject to the dramatic market volatility of 2011," IPIC's chairman, Mansour bin Zayed Al Nahyan, said in a report accompanying the statements.
IPIC also revealed in the statements that Aabar paid 827.6 million U.A.E. dirhams ($225.5 million) for a 21.57% stake in Dubai-based construction company Arabtec Holding. Arabtec said last month that Aabar owned nearly 21% of the company's shares, denying reports at the time that Aabar had acquired a majority stake.
IPIC announced a $44.7 million net profit on Wednesday, but its full statements showed it made a $140 million loss when excluding investments in which it has non-controlling interests. IPIC made a $1.25 billion net profit in 2010.
-By Asa Fitch, Dow Jones Newswires, +971 4 446-1685, firstname.lastname@example.org; Twitter: @ZDJnews
Copyright (c) 2012 Dow Jones & Co.
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