Dubai Holding eyes sale of remaining stage in Axiom
Dubai Holding, the conglomerate owned by the ruler of Dubai, is considering a sale of its remaining 26-percent stake in local mobile phone retailer Axiom Telecom, three sources familiar with the matter said.
March 13, 2012 2:18 by Reuters
A sale could fetch a price of $300 million for Dubai Holding’s unit Emirates International Telecommunications LLC (EIT), said a banking source speaking on condition of anonymity.
The holding company is in the process of nominating an advisor to evaluate options for the stake, two other sources said.
Dubai Holding declined to comment.
Axiom Chief Executive Faisal Al Bannai declined to comment on the possibility of a Dubai Holding exit and only said: “Every shareholder at Axiom has the right to evaluate their stake and test the market. The company operates independently from any change in shareholding.”
Dubai-based Axiom sold a 35-percent stake to Qatar’s Mannai Corp for an undisclosed amount last year after deciding against a share listing.
This included a 14-percent stake from EIT.
Dubai Holding holds a substantial portfolio of brands in the property and hospitality sectors, organised under three main groupings: Dubai Holding Commercial Operations Group (DHCOG) , Dubai International Capital and Dubai Group.
It is among the matrix of firms badly hit by Dubai’s 2009 financial crisis and most of its units have had to hold discussions with banks to extend liabilities and restructure debt. DHCOG repaid in full a $500 million bond earlier this year and does not have any debt due until 2014.
Dubai Holding may have to sell its entire $2-billion telecom portfolio over the next three years primarily to repay contractor liabilities, J.P. Morgan said in a note last July.
Dubai is slowly recovering from the impact of the financial crisis which saw property prices crash more than 50 percent in the emirate and forced it to restructure $25 billion in debt at flagship conglomerate Dubai World.
Other restructurings at state-linked entities continue. (By Mirna Sleiman and Dinesh Nair; Reporting by Sitaraman Shankar)