Dubai International Capital sells its major European assets

To pay off loans accumulated after the financial crisis, DIC sells its major holdings

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Dubai International Capital is seeking buyers for its German packager Mauser, the Financial Times reported. The move comes shortly after it sold Rivoli, a luxury retailer and its last Middle Eastern holding.

While DIC, owned by Sheikh Mohammed bin Rashid al-Maktoum struggled after the financial crash in 2008, the firm restructured its $2.2bn debt last year and now says it is confident in obtaining the $1.5bn it needs in order to repay this loan by 2016.

Central to this repayment is the selling of its assets.

The investment company is currently underway selling its three European-based assets: Mauser; UK-based engineering group Doncasters; and German alumina manufacturer Almatis.

DIC Chief Executive David Smoot says an exit from one of the three European holdings will be finalized by this year.

“Great companies are bought not sold,” he told the Financial Times in an interview. “There is lots of demand for high-quality assets and there is lots of interest in our portfolio, including Mauser, and in due course we will take advantage of that.”

Smoot said the companies in DIC’s portfolio had strong returns this year and projected further gains looking into 2014.

Bank of America Merrill Lynch is advising on the sale of Mauser, which currently has a net debt of about $750m.

After DIC’s sell, the remaining 18% stake in Rivoli, a company which has enjoyed strong performances due to rising tourism in Dubai, was purchased by Swatch of Switzerland. While DIC did not disclose the selling price, bankers estimated the deal around $110m.

“Rivoli has performed very well in the past few years,” Mr Smoot said. “Yet, it is in an excellent space, but it has outperformed its competitors in that space.”

Since 2007, DIC has raised $890m from selling its Gulf assets. Other significant sales over the past few years include a 45 per cent stake in UAE-based valve manufacturer KEF Holdings, Tyco International in 2011, and four Holiday Inn Express hotels in Dubai.

DIC, whose founding chief executive Sameer al-Ansari left in 2010, has significantly downsized its staff after the economic downturn. While at its peak employed 150 professional staff, it currently operates with 22 executives.

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