JPMorgan and HSBC Hired to Sell Senaat Unit Shares

A lot of major changes have been occurring in the Middle East as of late.  Last year Abu Dhabi’s Senaat hired HSBC Holdings Plc and JPMorgan Chase & Co. to do Senaat’s IPO.  The Senaat is a part private, part public identity.  It manages well over $6.9 billion USD of industrial assets for the Abu Dhabi government.  The original plan was to have its IPO be started at $1 billion last March, but that failed to happen.  The Abu Dhabi Executive Council wound up not approving the sale.  Since then the question of what would happen has been in limbo.

Now it has been announced that the Senaat will be selling shares of units this year.  “Our initial strategy was to IPO the main holding company.   Subsequently we have changed our mind.  We are now looking at the possibility of IPO-ing specific industries” said Hussain Al Nowais, chairman of the Senaat.  Neither Hussain Al Nowais nor any member on the Executive Council has given any hints at which industries may be put up for IPO later this year.  The company has a number of subsidiaries; a few of them are Agthia Group PJSC, Arkan Building Materials co. and Al Foah.

The decision to IPO various units is apparently hinging on how the economy is doing, but, according to Hussain Al Nowais, in the end it all comes down to the executive Council and their decision to pass it or not.  One of the units, National Petroleum Constructions, is contemplating to expand outside of the UAE by acquiring a sizeable engineering company in India and Europe.  The company has been looking to expand its engineering capability for quite some time, so this move isn’t a complete surprise but it will be interesting to see whether they go into the European or the Indian market.

All of this news comes at the same time as the Senaat is making major loans to Egypt in order to help it rebuild its economy.  Egypt’s economy has sat in a state of disarray and malaise since the Arab Spring and is finally making a push to raise its citizens out of poverty and rebuild the country so that it can be a contributing member to the region and the world.  The UAE has recently redoubled its efforts to diversify its economy away from oil and natural gas products.  As the production of both in North America has ramped up the country has found itself needing to work harder to invest in multiple sectors to protect itself from the dropping prices of oil and natural gas.





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