Wednesday, Dec 21, 2011
--Aldar unlikely to delist shares in the near future
--Company among the most traded on the Abu Dhabi bourse
--Mubadala stake hike in Aldar triggers speculation of an IPIC-Aabar type of deal to eventually delist
By Nikhil Lohade and Tahani Karrar-Lewsley
Of ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Abu Dhabi-based Aldar Properties has no plans to delist its shares, despite a government investment company raising its stake in the property developer through a recent bond conversion fueling speculation of such a move, two people familiar with the matter said Wednesday.
Aldar shares Wednesday fell 3.5% to AED0.83 on the Abu Dhabi market and have lost 17% in value over the last eight sessions, mostly on speculation of a possible delisting, precipitated by a recent bond conversion that gives government-controlled Mubadala Development Co. a 49% stake in the company.
The stock is now trading at an all-time low after dropping about 64% this year, but a person close to the company said delisting isn't a priority or something on the cards for Aldar.
"The rumors may be linked to the [Mubadala] convertible bond which takes it up to 49% [stake], but there's an interest in it remaining a public company as it's a big part of the exchange and most traded stock out there," he added.
Aldar, in a statement posted on the Abu Dhabi bourse website last week, said it would convert bonds worth AED2.106 billion at a conversion price of AED1.75 and allot 1.203 billion shares in the property firm to its shareholder Mubadala.
"This delisting rumor keeps coming back for Aldar every time the stock falls sharply. There isn't any such delisting plan at the moment of what we know of and understand," said Mohammed Ali Yasin, chief investment officer at Abu Dhabi-based CAPM Investment.
Speculation about a possible Aldar delisting has emerged in the past too, especially after the company had to be bailed out by the emirate's government as it struggled to recover from the global financial crisis in 2009, which led to a 50% slump in property prices in Abu Dhabi according to some estimates.
Aldar in January had said it would sell about $3 billion worth of assets including its Ferrari World theme park to the government, and place a $760 million convertible bond with Mubadala.
Some market participants say a Mubadala stake hike is dilutive to minority shareholders and that fears of an "IPIC-Aabar" like scenario will remain an overhang on the stock. Aabar Investments delisted last year, after majority shareholder government-owned International Petroleum Investment Co., or IPIC, bought out minority shareholders.
-By Nikhil Lohade, Dow Jones Newswires, +9714 446 1694, nikhil.lohade@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
21-12-11 1103GMT
