Dubai’s Arabtec to extend $650m rights period, says source

Dubai builder Arabtec, part-owned by Abu Dhabi state fund Aabar, is expected to extend the subscription period for its $650 million equity rights issue, a source familiar with the matter said on Sunday.

Subscription for Arabtec’s rights issue was due to end on Sunday, two weeks after its launch on June 9; the issue is to help the builder expand its regional operations.

The source, speaking on condition of anonymity, said the rights issue period was expected to be extended after the entire amount was not taken up by shareholders. Arabtec declined to comment.

The fund-raising is part of Arabtec’s five-year expansion plan, which includes a further capital increase of $650m by the end of 2014 if required. The company is selling 1.57 billion new shares at a price of 1.5 dirhams a share. Arabtec shares closed at 2.15 dirhams on Sunday, down 5.3 percent.

Arabtec, builder of Dubai’s famous palm islands, has been on an aggressive push for growth after it replaced its chief executive earlier this year in a shake-up led by Aabar, its largest shareholder, which has been tightening its grip on the group.

The company has won a series of contracts under the new management this year amounting to 13bn dirhams ($3.5bn) so far, mainly in the oil-rich emirate of Abu Dhabi where Aabar is based.