| DUBAI, July 7
DUBAI, July 7 Japan's Mitsubishi Corp
and Mitsubishi Heavy Industries have acquired a 38.4
percent stake in water and wastewater project developer Metito
Holdings for an undisclosed sum, the United Arab Emirates-based
In addition, the Japan Bank for International Cooperation
will provide up to $92 million in funds to Metito to
help finance its expansion plans.
Japanese firms' global network and expertise will help
Metito develop its operations, said Metito chief executive Rami
"We have outgrown the region and we need to position
ourselves for the next stage of our growth," Ghandour said in a
"We have some very aggressive plans and we feel there is
definite room in the global water market for us to be the
world's leading emerging markets player."
While Metito could look to bid for projects in collaboration
with its new stakeholders, Ghandour said that would only happen
for large projects which Metito couldn't do on its own.
The new funding secured under the deal will be used to
expand some of the firm's existing schemes, as well as for new
schemes in China and African markets it is targeting, including
Ghana and Rwanda, he added.
Metito currently has a portfolio of water and wastewater
assets worth in excess of $1 billion, according to the company.
The Japanese transaction provides Abu Dhabi-based private
equity firm Gulf Capital with a partial exit from its 2006
investment, reducing its holding in Metito to 23.8 percent from
56 percent, Metito said.
World Bank unit International Finance Corp cut its
6 percent stake in Metito, originally bought in 2007, to 3
percent under the Mitsubishi deal.
While not disclosing how much it made from the sale, Gulf
Capital chief executive Karim El Solh said the offloaded stake
returned more than three times its initial investment. He added
that Gulf Capital planned to keep its remaining stake.
"We've distributed nice proceeds to our investors but we
feel the remaining stake will be worth much more down the line.
What we will do with it, we shall see in a few years but, for
now, we are enjoying the exciting growth ahead," Solh said in
the same telephone interview.
The stake sale ends the possibility that shares in Metito
could be offered to the public any time soon - the company had
previously said it was interested in a flotation, with London,
Singapore and Hong Kong said to be options.
"We have the JBIC funds so that should keep us going in
terms of funding new projects," said Ghandour.
"We are a capital-intensive business so at some time in the
future we will need to examine what our funding strategy is.
Whether that is an IPO or something else we will have to
(Editing by Andrew Torchia)