Arabtec Not Interested In Buying Drake Stake

Dubai-based builder Arabtec is not interested in buying a stake in contractor Drake and Scull, Arabtec’s newly appointed chief executive said on Tuesday.

Drake, which specialises in mechanics, engineering and plumbing (MEP), has seen its shares jump 17 per cent year-to-date on growing speculation that it was a takeover target, with Arabtec viewed by analysts as a possible buyer.

Arabtec is on an expansion drive after a management shake-up led by Abu Dhabi fund Aabar, its largest shareholder.

Asked by reporters in Abu Dhabi whether Arabtec was interested in buying a stake in Drake, Arabtec CEO Hasan Ismaik said: “No, we are not”.

Arabtec, which recently announced a $1.8 billion capital increase as part of its expansion, is set to launch a joint venture with an international oil and gas firm in the next few days, Ismaik said.

He declined to give further details.

The company has said it would distribute the funds raised through the rights issue and a bond sale across four of its business areas. About 55 per cent would help support growth in oil and gas.

The contractor, which helped build Dubai’s famous palm islands, is also expected to buy the 40 per cent it does not already own in oil and gas construction firm Target Engineering, according to sources familiar with its plans.

Arabtec replaced its chief executive in February as part of the shake-up led by Aabar, which has been tightening its grip on the group.

The contractor signed a 10-year contract to lease the 59-storey Abu Dhabi World Trade Center commercial tower from developer Aldar Properties. No value was provided for the contract.

Ismaik ruled out any plan for Arabtec to move its headquarters to Abu Dhabi.

“The Abu Dhabi office will accommodate out future Joint venture partners and other businesses,” Ismaik said.