MANAMA, 31 October 2006 — Venture Capital Bank (VC Bank), a Bahrain-based investment bank, and its partner, the US private equity firm Global Emerging Markets (GEM), have acquired a significant stake in the MENA-based oil-drilling contractor Challenger Ltd. Established in 1991, Challenger currently owns and operates a fleet of 22 rigs in Libya providing drilling and work-over services of oil, gas and water wells, with offices in Saudi Arabia, the UAE and Egypt.
The acquisition was co-funded by VC Bank and its strategic technical partner GEM illustrating the bank’s non-conventional pursuit to attract North American and European funds and sources of capital to investment opportunities in the MENA region.
This significant transaction was completed by a team from VC Bank and GEM, not only strengthening the successful partnership between the two firms, but demonstrating that the region hosts many attractive, yet obscured, investment opportunities represented in privately held companies such as Challenger that operates mainly in Libya.
The conclusion of this transaction by VC Bank depicts the dimensions of the bank’s mandate to secure unique and attractive deals in the region for its investors and at the same time provide expansion and financing solutions to the regional small-to-medium enterprises in order to fulfill their untapped potential. Thus, the investment made in Challenger is mutually beneficial to both parties, allowing Challenger to achieve its growth plan and helping VC Bank to achieve its objectives of supporting regional companies and contributing toward the economies of the MENA region.
Challenger Limited is an international provider of contract oil and gas land drilling and work over services, with over 15 years experience servicing major and independent oil and gas companies, first in Africa, and now expanding into the Middle East. It claims to have a strong client base, including nearly all state-owned oil companies as well as international players such as Agip/Eni, Total. Marathon, Veba and Verenex Energy.
Challenger Chairman Hassan Tatanaki said: “Among all the alternative financing routes available to the company, Challenger’s management has chosen to partner with VC Bank and GEM in order to fuel and expedite its capacity expansion plans and its geographical coverage. This was based on our utter confidence and belief in the investment model pursued by VC Bank and GEM and the clarity of the financing roadmap presented by them.”
“This transaction demonstrates that growing cooperation among Libya, the US and the Middle East is creating an attractive investment environment for US and international financial institutions. We’re very happy that Challenger attracted foreign investments into Libya, especially from prominent institutions from the Middle East and the United States such as VC Bank and GEM,” he added.