Reuters quoted Abu Dhabi listed Aabar Investment said that state owned International Petroleum Investment Company has bought convertible bonds worth AED 1.5 billion in the first tranche of a bond issue.

Aabar said in a statement that the remaining tranches of mandatory convertible bonds totalling AED 5.184 billion will be purchased by IPIC at any time prior to the maturity date of November 30th 2009.

IPIC said that it planned to take a majority stake in Aabar through buying AED 6.684 billion worth of convertible bonds to help the firm invest in sectors across the region, including in energy. The bond is convertible by IPIC at any time and upon conversion would give IPIC a majority ownership in Aabar.

The bonds would be convertible into 2.23 billion ordinary shares in Aabar at a conversion price of AED 3 per share. The bonds would pay a floating rate coupon of three months Emirates Interbank Offered Rate plus 1.95% per annum, to be payable quarterly in arrears, adding that the maturity date would be November 30th 2009.

IPIC, which is expanding in the international oil and gas sectors, invests in oil and gas related assets for the Abu Dhabi government, which controls more than 90% of the oil reserves in the United Arab Emirates, the world's fifth largest oil exporter.

Aabar is partly owned by the Abu Dhabi government but allows foreigners to hold up to 40% of its stock.

(Sourced from Reuters)