Reuters reported that Dubai builder Arabtec is looking to more than double its workforce to 25,000 in Saudi Arabia as it continues to shift its focus to other markets.
Mr Ziad Makhzoumi CFO of Arabtec said that the company will not reverse provisions in 2011 and has no immediate plans to issue a shelved USD 150 million convertible bond. We had to take provisions as some developers were facing difficulties. Most of these developers are paying us back, but we're not doing reverse provisions yet.
Mr Makhzoumi said that with the market going the way it is, I think it is prudent to wait until possibly the end of the year. The builder would unlikely book further provisions this year. We have to be conservatively cautious now. There are lots of things that we are hopeful will happen soon but the timing is not in our hands.
He said that the builder expects to maintain its current backlog of projects worth around AED 15 billion in all of its markets by the end of the year. We are hoping that Saudi Arabia will eventually become our biggest market it's unlikely to happen this year, because of the delay in building projects, building capacity. We look to build capacity up to 25,000 eventually.
Saudi Arabia is facing a massive housing problem due to rapid population growth and an inflow of expatriate workers coming to the kingdom which is rolling out USD 400 billion infrastructure spending plan.
Mr Makhzoumi said that the company is bullish on Qatar and will push for projects as the country prepares infrastructure for the soccer World Cup in 2022. We are bidding for work in Qatar. We are also going for joint ventures to make sure we can get the maximum. The builder shelved plans for a rights issue and USD 150 million convertible bond earlier this month.
He said that Dubai's return to the bond market last week is a sign of investor confidence returning but the builder has no plans to issue the convertible bond this summer. With the unrest growing in the region, the interest rate was not attractive for us. To me any cheap money should be considered and anything around 6 to 6.5% is cheap for me.
(Sourced from Reuters)
