ABU DHABI, July 2 (Reuters) - Major Dubai construction company Arabtec retains the support of major shareholder Aabar Investments and has not cancelled any projects as a result of recent management changes and a restructuring of the firm, its chairman said on Wednesday.
Chairman Khadem Abdulla al-Qubaisi was holding the company’s first news conference since a series of events in June shook investors’ faith in one of Dubai’s most prominent firms, slashed its share price and dragged down the entire stock market.
In early June, wealthy Abu Dhabi state fund Aabar Investments cut its stake in Arabtec to 18.94 percent from 21.57 percent, raising doubts over its willingness to support the company. Then on June 18, CEO Hasan Ismaik, who had built a 28.85 percent stake in Arabtec, abruptly resigned.
Arabtec shares plunged 70 percent from a record peak in mid-May to their intra-day low on Tuesday, erasing about $6.5 billion of value, although they began to rebound in late trade on Tuesday because of hopes that a strategic investor would be found to buy Ismaik’s stake.
Qubaisi said on Wednesday that Aabar considered Arabtec a long-term investment, and that investors had misunderstood the significance of the small reduction in Aabar’s stake. He declined to comment on Aabar’s real motive.
He also said none of Arabtec’s projects, including a $40 billion deal to build 1 million homes in Egypt over coming years, had run into problems. The Egyptian project is a strategic deal between Egypt and the United Arab Emirates, and is almost in the design phase, he said.
However, Qubaisi said the company was in a restructuring phase and therefore needed to focus on its core construction business, rather than oil and gas, a sector which it last year announced plans to develop.
He declined to comment on Ismaik’s stake in the company or how it might be handled. (Reporting by Stanley Carvalho and Maha El Dahan, Writing by Andrew Torchia, Editing by Praveen Menon)