The Kuwait-based Gulf Holding Company K.S.C.C., sponsored by the Bahrain-based Islamic investment bank, Gulf Finance House B.S.C. (GFH) and Bayan Investment Company K.S.C.C. (Bayan) of Kuwait, have announced floating a KD69 million placement offer to tap the investment potential of the real estate and infrastructure sectors of the region.
The placement will offer 690,000,000 shares at 110 fils a share, which includes a 10 fils subscription fee, to prospective investors keen to tap the burgeoning investment opportunities in the realty and infrastructure sectors of the regional economy with initial focus on the Kingdom of Bahrain and Kuwait.
The projected Internal Rate of Return (IRR) from investments in the placement issue is expected to be in excess of 20 per cent a year. The minimum subscription is 100,000 shares with additional investments in multiples of 50,000 shares.
Elaborating on the details of the placement, Mr. Esam Janahi, Chief Executive Officer and Board member of GFH, said: “In the context of the current buoyant regional real estate and infrastructure development scenario, the placement offers an ideal opportunity to maximize returns on investments in the medium to long-term.”
The proceeds from the placement will be utilized to increase the share capital of the company which will in turn direct investments into regional real estate and infrastructure development projects. Post-placement, the capital of Gulf Holding Company will be of KD70 million, up from the company’s current paid-up capital of KD1 million.
“We have already identified various existing and emerging investment opportunities which include the Residential South component of the Bahrain Financial Harbour (BFH) and Al Areen Downtown development,” said Mr. Janahi.
“BFH as well as Al Areen development are high-profile projects in Bahrain supported by the Government of Bahrain, promising sustained returns from investments. As an asset class, both the projects have long-term value as their business models underpin continuous revenue generation benefiting the economy of Bahrain,” he added.
Commenting on the investments in Al Areen and BFH, Mr. Faisal Al-Mutawa, Chairman and Managing Director of Bayan Investment Company K.S.C.C: “The BFH Residential South will comprise five development parcels spread across a total area of 32,489 square metres. The component will have three luxury residential towers comprising 596 luxury apartments targeted at upper income Bahraini residents and expatriates, in addition to GCC nationals and resident expatriates, situated within a high-class living environment complete with restaurants, retail outlets and entertainment venues. BFH Residential South will be a unique world-class project and will generate an aura of luxurious lifestyle, making it the only one of its kind.”
He said that the Al Areen Downtown parcel within the mixed-use project, Al Areen development just outside Manama, across 260,821 square metres will comprise luxury apartments, villas and commercial components. It will also have facilities like cinemas, outdoor cafes, shopping components, restaurants and walkways in this freehold development.
Mr. Faisal further said: “The investments in both the projects reflect the strategic and growth-oriented approach of Gulf Holding Company which will continue investing in real estate developments in the Kingdom of Bahrain and the region. We will offer investors opportunity to take part in these developments through offering shares for subscription. We will strive to provide higher returns to investors keen to cash in on the potential of the economic growth.”
Both GFH and Bayan have committed to invest KD 5 million each in the placement equivalent to 14.29 per cent in the total issued share capital of the company which will be to the tune of BD 70 million.
Gulf Holding Company is also looking at the prospect of listing its shares on the Kuwait Stock Exchange (KSE) in the first quarter of 2007, or earlier, subject to meeting listing requirements and the satisfactory performance of the bourse.
The lead managers to the issue are GFH and Bayan while the lead financial arrangers are Gulf Finance House Commercial Bank B.S.C (C).
