The agency believes that the deal has no implications on the implied support of, commitment from, and ownership of government of Abu Dhabi(“AA”/Stable) for Mubadala, which is the main driver of its ratings.
Mubadala announced that ATIC had become a wholly owned business of Mubadala effective as of Jan. 1, 2011.
The transfer occurred through Mubadala recognizing ATIC as additional shareholder contributions at ATIC’s Dec. 31, 2010 net book value, in kind, with no cash payment from Mubadala.
Therefore, ATIC’s financials will be fully consolidated by Mubadala and ATIC will be fully incorporated in Mubadala’s budgeting process going forward.
Mubadala’s 2011 budget, approved by the government of Abu Dhabi, includes ATIC’s 2011 capex requirements.
“Fitch continues to apply its parent and subsidiary rating linkage methodology in rating Mubadala, as it believes that a strong relationship exists between the company and the Emirate of Abu Dhabi. As such, Mubadala’s rating is aligned with Abu Dhabi’s sovereign rating,” says Bashar Al-Natoor, director in Fitch’s EMEA corporates team in Dubai.
The government of Abu Dhabi’s announcement on Jan. 13 made an extremely forceful statement of support for its flagship sovereign owned entities (SOEs), stating that “broad and ongoing support will be offered exclusively,” namely to Mubadala Development Company PJSC, International Petroleum Investment Company (IPIC) and Tourism Development & Investment Company (TDIC), all of which are rated the same as the sovereign and Taqa (not rated).
Mubadala’s 100 percent state ownership status is mandated by law and unlikely to change.
It can only be dissolved after 2052, 50 years from its formation, by Emiri decree, or if its mandate is deemed complete.
Established in 2002 through Emiri Decree No 12, Mubadala is the primary business development company of Abu Dhabi.
It has a mandate from the government to drive economic diversification to improve social development and build wealth for future generations.
Mubadala’s mission, as set forth by the government, is to achieve commercial returns while advancing the government’s broader policy aims, including building Abu Dhabi’s new economy, and improving the quality of life for the people of Abu Dhabi.
