JEDDAH, 1 May 2006 — The private placement (capital) subscription for GulfOne Investment Bank (GulfOne) started yesterday and it is expected to last for three weeks. According to Dr. Nahed Taher, CEO of GulfOne, the bank is the region’s first financial institution with its core products and services focused on infrastructure development and mega-projects. It aims to have an even spread of investors from across the Gulf Cooperation Council.
With the aim of having a diversified investor base, GulfOne is allocating shares based on a strategic view of supporting its different business lines. In addition, GulfOne will not make business investments that run contrary to Islamic principles. Moreover, in designing and managing its products and services, complying with Islamic code will be sacrosanct. An annual audit will be conducted to ensure that its products are in compliance with Islamic guidelines.
“Even before the official launch of the private placement subscription, the response from business leaders across the GCC exceeded our expectations, and this indicates the importance of having this type of financial institution that will focus on providing different financial solutions ranging from advisory, to equity and debt raising for the regions infrastructure sector,” said Nahed. “GulfOne will focus on the following strategic economic sectors: Energy, power, water, transportation, petrochemical and technology and with market estimates projected to be in excess of $1 trillion in new ventures over the next 15 years throughout the GCC (40 percent of which are in the utilities sector). GulfOne is positioned to help structuring these projects by introducing private sector efficiency over the life of the asset whilst retaining government ownership,” she added.
Nahed explained that Gulf One is keenly aware of the need to build collaborative banking arrangements, that is why we have formed partnerships and alliances in addition to looking to set up more such arrangements with top international, regional investment banks in order to create the large infrastructure funds needed, in order to expedite the efficient execution of our activities in the area of mega-projects. Although the bank is in the formation stage, the pipeline of deals in industrial and infrastructure projects are enormous. Gulf One’s modest financial capital will be complimented by a series of substantial funds to fulfil its financing obligations to the current and potential deals.
Ziyad Omar, COO of GulfOne, emphasized the need to assist the GCC in developing the region’s structural issues such as helping to create a “Long-Term Debt Market” and a funding-structure that is known as Public Private Partnership or “PPP”. “The absence of the latter negatively affected the region’s ability to cope with the huge demands of financing infrastructural projects which has put huge budgetary pressure on the regions government, while the none existence of the former has meant the use of foreign loans, which in turn meant higher capital costs due to credit, geo-political and other considerations,” said Omar.
