Aug 09 2010 |
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DIFCI to retain core assets
Monday, Aug 09, 2010Dubai: DIFC Investments ( DIFCI ) will retain core business assets as it continues to divest parts of its portfolio to raise $1 billion (Dh3.67 billion) by the end of 2011.
With the stated aim of increasing liquidity, the investment arm of the Dubai International Financial Centre will strengthen core business lines and "create operational efficiencies", a senior executive told Gulf News yesterday.
" DIFCI may divest certain of its investment portfolio to create robust liquidity streams across the business, whilst maintaining very strong focus on augmenting returns from our core business lines and also creating operational efficiency across the board," he said.
Positive step
"Although we view this as a positive step with respect to
DIFCI
's creditworthiness, we think it involves execution risk," S&P said in a note.
DIFCI posted a $561.4 million loss last year compared to a profit of $842.5 million in 2008, the company said in a May statement to Nasdaq Dubai, where its $1.25 billion sukuk is listed. Revenue rose 29 per cent to $891.7 million, helped by income from its UK-based Smartstream Technologies unit, which it bought three years ago.
"A selective non-core asset sale is the right approach to create necesssary liquidity," said Dr Armen V. Papazian, a financial economist and chief executive of business intelligence consultancy Keipr.
"This is an important and strategically relevant move that will allow DIFCI to refocus its portfolio. This would allow DIFC Investments and DIFC in general to refocus on the practical challenges of reinventing the financial hub," Dr Papazian told Gulf News.
"Any asset divestment would be evaluated based on opportunity and other relevant factors which will determine the profit and/or loss on exit," Akram said.
S&P has estimated DIFCI 's debt at $3.1 billion as of December 31, 2009.
By Yazad Darasha Business News Editor© Gulf News 2010. All rights reserved.
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