Alright, don’t rub it in
Kipp’s Abu Dhabi friends are showing off again. But Kipp can bring them down to earth with just one little word: Aldar. Ha! Not laughing now, are you?
February 9, 2011 2:37 by Samuel Potter
What is it with Kipp’s Abu Dhabi friends just now? Yes, we in Dubai have had a bit of a kicking, yes we’re all looking a little stupid, but there’s no need to stroll around like Lords of the Manor, looking down your noses at us.
Currently certain personal acquaintances of ours are slicking their eyebrows and adopting a haughty facial expression because they’ve got three Abu Dhabi big hitters who fancy showing Axiom a thing or two by pulling off the market equivalent of the five bus motorcycle leap, an IPO. Property firm Eshraq, Insurance House, and Abu Dhabi National Insurance Co all reckon they have what it takes to succeed where Axiom choked.
Eshraq and Insurance House have penciled in the first quarter with offerings worth $224 million and $18 million respectively, while ADNIC is reportedly planning to tie up with three other entities to launch the offering for a still-to-be-formed Islamic insurance co.
“At least three companies are ready to go public and talks are also going on about companies in Abu Dhabi’s health sector to go public,” a senior Abu Dhabi-based banker advising two firms told Reuters.
So, will they succeed where Axiom failed, and become the first UAE IPOs in two years? Well, Kipp reckons they will – and credit to them for that, because it’s high time someone tried to get this ball rolling again. Action will breed action, and things should pick up from there.
We’ll grudgingly concede to our mates that Abu Dhabi looks set to be leading us out of the liquidity slump. But before they get over excited, we have one way to bring them down to earth with a bump; one little word that’ll have them turning a mild shade of crimson: Aldar.
The scale of the problems facing one of the flagship property companies of the emirate were laid bare this week when it published its results for 2010. The company, which has had to be rescued by Abu Dhabi government, reported a full year loss of a huge AED 12.7 billion. The government bailed out the company with $5.2 billion in January, after most of the losses were booked in the final quarter of 2010. The losses for Q4 were expected to be in the region of AED 445.8 million, according to Emirates 24-7, but in actual fact they were AED 11.14 billion.
After a bailout and a restructure, Aldar has survived – and is even predicting a return to profit in 2011. But it’s a reminder – in case anyone needed one – that oil wealth and a generally conservative business atmosphere are not necessarily a defence against recession. We should all of us stay humble, and remember that everyone can make mistakes.