KSA firms eye deals at Abu Dhabi defense show

Updated 18 February 2013
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KSA firms eye deals at Abu Dhabi defense show

Italian Defense Minister Giampaolo Di Paolo stressed Italy’s readiness to support the region’s drive to acquire technology in industry and other sectors while speaking at the opening of biennial International Defense Exhibition and Conference (IDEX) in Abu Dhabi.
The event has a special focus on naval defense and unmanned aerial systems.
 The event hosts around 1,112 exhibiting companies from 59 countries and expects over 70 defense ministers from different countries among its attendees.
UAE Vice President and Prime Minister and Ruler of Dubai Shaikh Mohammed bin Rashid Al-Maktoum and Gen. Shaikh Mohammed bin Zayed Al-Nahyan, crown prince of Abu Dhabi and deputy supreme commander of the UAE Armed Forces, participated in the inaugural ceremony with other crown princes, ministers, and top officials from different states in the region.
Exhibitors include Saudi Arabia, Egypt and other Arab countries besides major weapons producers as the US, Russia, the UK, France, Germany, Italy, China, the Netherlands, Spain, Turkey, Canada, Brazil, South Africa, Malaysia and Indonesia.
Saudi Arabia’s Armored Vehicles & Heavy Equipment Factory (AVF), a company affiliated to Military Industries Corporation in Saudi Arabia that manufactures different types of armored vehicles, is participating in the event.
In addition, Al-Ghuroub Group, Al-Wafa International Co. and Jadwalean Int-Oper & Mgt Companies also are among the Saudi participants.
Vessels from the US, Italy, France, the UK and Pakistan and three ships from the UAE are participating in the Naval Defense Exhibition (Navdex), which will run through Thursday.
 The Italian defense minister said his country maintained strong ties with Gulf countries and supported all initiatives by local companies to expand cooperation with the UAE and the other Gulf countries.
 “We are very satisfied with the cooperation with the UAE in the defense sector. There is definitely room for improvement in the industrial, as well as in the technical/operational, and technical/capability sectors,” he said.
 Italy has a strong presence in the exhibition and they have displayed Fincantieri ships, notably an Abu Dhabi class Corvette and a patrol ship offered to the Emirates Navy.
 French Minister of Defense Jean-Yves Le Drian said IDEX was now the largest defense and security exhibition in the MENA region. In a statement, the minister also highlighted the French Army’s participation, which included a display of its “Soldier of the future latest technologies” in the fields of spatial communication and tactical equipment, along with a demonstration of major French Armed Forces combat vehicles.
 Around 70 French companies, including independent pavilions are participating at both IDEX, and the Navdex. The US, the biggest exhibitor, is represented by over 180 firms.
The UAE has 144 companies on the ground while Germany and China are present with 69 and 25 firms respectively.
 Lt. Gen. Andre Blattmann, chief of Swiss Armed Forces, said Swiss participation in IDEX had increased from 18 exhibitors in 2011 to around 30 this year.
 The opening ceremony commenced with the playing of the UAE National Anthem, followed by a performance from the Fijian military veterans troupe titled “War Spears Dance” and “Fan Dance” and a Japanese group show titled “Strike terror into the hearts of enemies.”
 The main feature of the opening ceremony was a spectacular show of power in which the land, air and naval forces of the UAE demonstrated their professional skills in front of a large number of guests from Arab and friendly countries. Organizers say they expect more than 60,000 visitors during the next five days.
Data by the organizers showed IDEX 2011 attracted 1,060 exhibitors from 52 countries and nearly 60,000 military delegates and other visitors.


Gulf companies challenged by debt and rising interest rates

Updated 22 April 2018
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Gulf companies challenged by debt and rising interest rates

  • Debt restructurings on the rise, but below crisis levels
  • Central Bank of the UAE has raised interest rates four times since last March

There has been an uptick in recent months in heavily-borrowed companies in the Gulf seeking to restructure their debts with lenders. Although the pressure on companies is not comparable to levels witnessed in the region following the 2008 global financial crisis, rising interest rates will eventually begin to have a greater impact, say experts.
Speaking exclusively to Arab news, Matthew Wilde, a partner at consultancy PwC in Dubai, said: “We do expect that interest rate increases will gradually start to impact companies over the next 12 months, but to date the impact of hedging and the runoff of older fixed rate deals has meant the impact is fairly muted so far.”
The Central Bank of the UAE has raised interest rates four times since the start of last year, in line with action taken by the US Federal Reserve. The Fed has signalled that it will raise interest rates at least twice more before the end of the year.
Wilde added that there had been a little more pressure on company balance sheets of late, although “this shouldn’t be overplayed”.
Nevertheless, just last week, Stanford Marine Group — majority owned by a fund managed by private equity firm Abraaj Group — was reported by the New York Times to be in talks with banks to restructure a $325 million Islamic loan. The newspaper cited a Reuters report that relied on “banking sources”.
The Dubai-based oil and gas services firm, which has struggled as a result of the downturn in the hydrocarbons market since 2014, has reportedly asked banks to consider extending the maturity of its debt and restructuring repayments, after it breached certain loan covenants.
A fund managed by Abraaj owns 51 percent of Stanford Marine, with the remaining stake held by Abu Dhabi-based investment firm Waha Capital. Abraaj declined to comment.

 

Dubai-based theme parks operator DXB Entertainments struck a deal last month with creditors to restructure 4.2 billion dirhams ($1.1 billion) of borrowings, with visitor numbers to attractions such as Legoland Dubai and Bollywood Parks Dubai struggling to meet visitor targets.
Earlier this month, Reuters reported that Sharjah-based Gulf General Investment Company was in talks with banks to restructure loan and credit facilities after defaulting on a payment linked to 2.1 billion dirhams of debt at the end of last year.
Dubai International Capital, according to a Bloomberg report from December, has restructured its debt for the second time, reaching an agreement with banks to roll over a loan of about $1 billion. At the height of the emirate’s boom years, DIC amassed assets worth about $13 billion, including the owner of London’s Madame Tussauds waxworks museum, as well as stakes in Sony and Daimler. The firm was later forced to sell most of these assets and reschedule $2.5 billion of debt after the global financial crisis.
Wilde told Arab News: “We have seen an increasing number of listed companies restructuring or planning to restructure their capital recently — including using tools such as capital reductions and raising capital by using quasi equity instruments such as perpetual bonds.”
This has happened across the region and PwC expected this to accelerate a little as companies “respond to legislative pressures and become more familiar with the options available to fix their problems,” said Wilde.
He added that the trend was being driven by oil prices remaining below historical highs, soft economic conditions, and continued caution in the UAE’s banking sector.
On the debt restructuring side, Wilde said there had been a “reasonably steady flow of cases of debts being restructured”.
However, the volume of firms seeking to renegotiate debt remains small compared to the level of restructurings witnessed in the aftermath of Dubai’s debt crisis.
Several big name firms in the emirate were caught out by the onset of the global financial crisis, which saw the emirate’s booming economy and real estate market go into reverse.
State-owned conglomerate Dubai World, whose companies included real-estate firm Nakheel and ports operator DP World, stunned global markets in November 2009 when it asked creditors for a six-month standstill on its obligations. Dubai World restructured around $25 billion of debt in 2011, followed by a $15 billion restructuring deal in 2015.
“We would not expect it to become (comparable to 2008-9) so barring some form of sharp external impetus such as global political instability or a protectionist trade war,” said Wilde.
Nor did he see the introduction of VAT as particularly driving this trend, but rather as just one more factor impacting some already strained sectors (e.g. some sub sectors of retail) “which were already pressured by other macro factors.”

FACTOID

Four

The number of interest rate rises in the UAE since March 2017.