Global Investment House “Global” announced today the launch of National Ranges Company’s “Mayadeen” capital increase to KD100 million to fuel its ambitious plans in becoming a leading regional real estate company. The placement is open to all investors.
Mr. Omar M. El-Quqa, Executive Vice President at Global, said that Mayadeen, which is listed on the Kuwait Stock Exchange (KSE Ticker: Mayadeen), will use the funds raised through the capital increase to implement its aggressive expansion plans throughout the region.
The expansion strategy has commenced through Mayadeen’s subsidiary signing a Memorandum of Understanding to acquire income-generating and development real estate assets in the UAE.
“Mayadeen is gearing up to become a GCC real estate company, and through this offering, new and existing investors will enjoy the fruits of the company's real estate plans and also benefit from the increased liquidity in the market,” Mr. El-Quqa added.
El-Quqa stated that Global will manage the offering, open to all interested investors, as of today through December 13, 2006, with over 975 million new shares to be issued to cover the capital increase.
Mayadeen is increasing its paid-up capital to KD100 million by the issuance of 975,692,080 new shares, of which, new investors will subscribe to 866,306,440 shares at price of 109.91fils per share. Shareholders registered as of the end of trading session on November 11th, 2006 will receive 42,538,860 shares (1.75 shares for each held) as free distribution shares and 66,846,780 rights shares (2.75 shares for each held) at 100fils per share.
New and existing shareholders will be able trade the company’s shares freely on the KSE once the share allocation and issuance process is finalized, El-Quqa said.
The Global EVP affirmed that Mayadeen is embarking on a new era in corporate growth by positioning itself as a leading regional real estate company by increasing its capital. Mayadeen, listed on the KSE, intends to list on the Dubai Financial Market to complement its regional expansion plan.
“The company will focus its real estate initiatives on income-generating and development real estate properties, with three identified real estate projects, one in Abu Dhabi and two in Dubai as the company’s seed projects. These projects will be funded by the capital increase.”
El-Quqa added, “As the secured projects are located in Dubai and Abu Dhabi, among the most dynamic real estate markets in the GCC, Mayadeen is on an exciting track of corporate growth.”
“It is anticipated that both new and existing shareholders will significantly benefit from expected increase in the valuation of the company driven by its sound real estate portfolio,” he followed.
Mayadeen’s income-generating properties (secured through an MOU, by a subsidiary of Mayadeen) include two 100% occupied prime and quality office buildings in Emaar Business Park, Dubai. Additionally, Mayadeen has secured a prime office building property (secured through an MOU, by a subsidiary of Mayadeen) with a small retail component, located in Dubai Healthcare City, which will be ready by the end of this month. The acquisition cost of these three existing buildings is approximately KD48 million.
Driven by strong economic growth, Dubai is unable to meet the demand for quality office space due to requirements from an increasing number of foreign companies setting up base in Dubai, Mayadeen plans to capitalize on this opportunity.
The company’s most extensive project is within Reem Island (a natural island), part of the Shams Abu Dhabi development. For this project, Mayadeen has also signed a Memorandum of Understanding (through its subsidiary) to acquire three strategically located land plots in Abu Dhabi within the Entertainment District in Shams Project. Construction is set to begin in January 2007.
Reem Island is one of the few projects in Abu Dhabi which is defined as an Investment Zone, complementing Abu Dhabi’s new property laws, which both foreigners and nationals will benefit from.
Abu Dhabi’s real estate market, prior to recent reforms, was fairly closed with limited private investments. Currently in Abu Dhabi, the supply deficit scenario in the residential and commercial segments holds significant opportunities for developers. The demand-supply gap has resulted in significant increase in lease rentals for quality real estate.
The real estate sector continues to be a key sector in the GCC economies, contributing about 6% of the GCC GDP. The Company will stand to significantly benefit from the booming real estate market in the region.
Mayadeen has strategically selected its portfolio with the intent to diversify on revenue front as well as on a geographical front.
El-Quqa ended by saying that Mayadeen plans to leverage its KD100 million capital to expand its real estate portfolio into other lucrative markets in the region like Qatar and Saudi Arabia, through its subsidiary.
“It is already actively studying few attractive projects and has engaged reputed agencies for the same to expand its portfolio in other countries in the Gulf,” he concluded.
