Saturday, Oct 08, 2011
(This item was originally published Thursday.)
--Arabtec's Indian joint venture, currently under formation, gets AED750 million worth of project work
--Work on 3 mixed use projects to be completed over 48 months
--Arabtec official says more Indian projects in the pipeline
DUBAI (Zawya Dow Jones)--Dubai's Arabtec Holding (ARABTEC.DFM) said its Indian joint venture, that is currently under formation, has secured contract work in India worth around 750 million U.A.E. dirhams ($204 million), another sign that the emirate's largest building firm is looking beyond a stagnant Dubai market for new work.
Arabtec said its Indian joint venture with Raheja Ltd. will construct 3 mixed use projects in New Delhi and Gurgaon. Work on the Raheja Revanta, the Raheja Phoenix and the Raheja Shristi projects is expected to be completed over 48 months.
"We first have to set up the Arabtec Construction LLC - Raheja JV company which is still under formation, but the projects are already funded and primed so we can start the work soon but we will have to get the legalities sorted first," an Arabtec official who declined to be named told Zawya Dow Jones.
The Arabtec official also said that once the Indian joint venture is fully up and running, it will target more building work in what is one of the world's fastest growing economies.
"There are a number of Indian projects we are studying now but these three will take precedence for now. We are always looking at new projects but we have to set up the company first," the official said.
Arabtec has been hit hard by a severe downturn in Dubai's property market where prices have slumped by more than 50% since late 2008 and many projects are on hold or cancelled. The company has recently begun to diversify away from dependence on contracts in Dubai and the United Arab Emirates, and looking at new markets such as Saudi Arabia, Pakistan and Egypt.
Analysts at Shuaa Capital in Dubai said the AED750 million of project work should translate to a 5% rise in Arabtec's total backlog which is estimated now at AED14.9 billion.
"On a standalone basis the Indian contract is not a game changer - but when you add the projects from JV expansions into Saudi, Kuwait, Egypt among others over the past year it becomes clear that there is a steady improvement which ought to deliver earnings growth in 2012," Shuaa analyst Roy Cherry said.
Arabtec shares last traded 1.5% higher at AED1.32 in a positive overall market.
-By Tahani Karrar-Lewsley, Dow Jones Newswires; +9714 446-1692; Tahani.Karrar@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
08-10-11 0728GMT
