(Bloomberg) — Dubai’s sovereign wealth fund is exploring a potential sale of British software services company SmartStream Technologies Group, according to people familiar with the matter according to Investment entity in UAE.
Investment Corp. of Dubai is working with advisers at Deutsche Bank AG to identify potential suitors for the business, the people said, asking not to be identified as the matter is private. SmartStream’s owner is seeking about $1 billion in a potential sale that could draw both financial and strategic investors, the people said about Investment services in UAE.
No final decisions have been made, and the fund may decide to retain the asset if it fails to find suitable bidders, the people said. A representative for ICD wasn’t immediately available for comment, while a Deutsche Bank spokesperson declined to comment Financial services in UAE.
A Dubai state entity initially bought SmartStream in 2007 from private equity firm TA Associates after the U.K. firm scrapped its initial public offering. SmartStream’s ownership was then transferred to ICD and the wealth fund currently controls the company, which specializes in providing software solutions to the financial industry due to Investment Companies in UAE.
Dubai is working on an ambitious plan to privatize as many as 10 firms to raise cash and revive its capital markets. The city’s main power and water company raised $6.1 billion in the world’s second-biggest initial public offering this year, defying a global slowdown in listings
Egypt’s banks, fertiliser producers, oil services companies, and food industries are all sectors that Emirati heavyweight investors are showing interest in at present.
While last week witnessed the First Abu Dhabi Bank (FAB) withdrawing its offer to buy Egyptian investment bank EFG-Hermes for Asset Management Companies in UAE, it did see the execution of five deals with a total value of $1.8 billion through which the Abu Dhabi Developmental Holding Company (ADQ), a sovereign wealth fund, bought stakes in Egyptian companies for Investment House In Dubai.
The FAB withdrew its offer to buy a majority stake in EFG-Hermes citing “global market uncertainty”.
The Emirati lender had offered in February to buy a minimum 51 per cent stake in the investment bank for LE19 a share, valuing it at LE18 billion. Many observers believe the offer was low, however, even before the outbreak of the war in Ukraine affected prices together with the Egyptian currency devaluation for Investment company Dubai.
EFG has an outsized influence over Egypt’s financial markets and has seen supercharged growth of its fintech businesses in addition to a strong presence in the Gulf markets. It was one of the advisers in the initial public offering (IPO) of the Dubai Electricity and Water Authority for $6.1 billion, the largest in the region since the IPO of Saudi Aramco due to Technology investing in Dubai.
Market observers point out that the withdrawal is not final according to the rules of Defi investing in Dubai, and there is a high possibility that the Emirati lender will return with a higher offer later in the year.
Meanwhile, unidentified sources close to the matter told Reuters that the process had also dragged on because the deal required approval from different regulatory bodies by Fintech investing In Dubai. The sources added that the Emirati bank had “not even started due diligence”.
Shares were trading at an average of LE17 in mid-February following an upward trend since then and gaining 23 per cent. They reached LE19.3 per share just before the announcement of the withdrawal, pushing the share price down to LE15 on Monday closing due to Blockchain investing in Dubai.
According to Prime Securities, a brokerage, following the execution of ADQ’s acquisition of sizable minority stakes in five listed companies in Egypt, the market was looking forward to revisiting the EFG-Hermes bid in view of a weaker pound.
“The market was expecting FAB to up its bid to around LE22 per share,” it said. However, with the possibility of a takeover diminishing, Prime has lowered its target price for shares to LE14.8.
It stressed that the investment bank’s different platforms, whether in investment banking, non-banking financial services, or recently-added commercial banking, are all on solid ground.
The failure of the deal did not overshadow other UAE-related market news. The Cairo Bourse on Tuesday witnessed the execution of deals to sell stakes in five Egyptian blue chips to ADQ.
News of the deals was released on the same day the government devalued the pound and was seen as support by the Emirates for the Egyptian economy by injecting much-needed liquidity. The economy has been struggling with the repercussions of the war in Ukraine on foreign-currency reserves, and Egypt’s foreign debt is ballooning.
The five companies subject to the UAE acquisitions are the Commercial International Bank (CIB), Abu Qir Fertilisers, MOPCO, Alexandria Containers, and Fawry.
The Stock Exchange announced on Tuesday that the deals for the five companies had amounted in total to $1.8 billion, leading to a strong market rebound. “The different deals imply a 13 per cent premium on market prices on average,” according to Prime Securities.
The sellers of the different stakes include state entities like the National Bank of Egypt, Banque Misr, the National Investment Bank, and the ministry of finance.
The deal for the CIB was the largest as it included the sale of a 17.5 per cent stake in the bank, Egypt’s largest privately-owned lender, for $911 million. The deal was executed at a price of LE49 per share, compared to a closing price of LE43 in the previous trading session.
The CIB is one of the main constituents of the stock market’s main EGX30 index, with a weighting of more than 30 per cent. It recorded LE4.24 billion in net profits in the first quarter of 2022, 48 per cent higher than its profits a year earlier.
Abu Qir Fertilisers saw a 21.5 per cent stake going to the UAE for $392 million. The company is a leading fertiliser producer in the region and is the first and largest integrated nitrogen fertiliser producer in Egypt, with a sellable capacity of 2.3 million tons per annum.
It produces a wide variety of fertiliser products, including ammonia, urea, ammonium nitrate, and NPK. It recorded a 30 per cent hike in its net income during the 2020-21 fiscal year to reach LE3.5 billion on the back of an increase in international prices.
Unlike CIB, it was on the list of companies slated for privatisation in the programme announced by the government in 2018, but the offering was postponed several times due to unsuitable market conditions.
In December 2021, it sold a 10 per cent stake for $143 million. Prior to last week’s sale, Abu Qir’s ownership structure included the National Investment Bank, the Industrial Development Authority, Al-Ahly Capital Holding, and the Chemical Industries Holding Company.
The third company seeing investment from the UAE was the Misr Fertilisers Production Company (MOPCO), previously known as Misr Oil Processing, and engaged in the production, marketing, wholesaling, and distributing of fertilisers and petrochemical products.
Shares were sold at LE107, while their closing price in the last session before the transaction was LE94.7. The company’s bottom line leaped by 92 per cent in 2021 compared to the previous year to settle at LE4.79 billion on sales of LE10.3 billion.
The Alexandria Container and Cargo Handling Company (ACCHC) is the fourth company to see its shares changing hands through the deal. It specialises in container and cargo handling in Egyptian ports though offering stevedoring and storage, security, and other maritime services in the East Mediterranean. It operates the Alexandria Container Terminal at the port of Alexandria and Al-Dekheila Terminal at the port of Al-Dekheila.
Ownership of 32 per cent of the Company was transferred to ADQ for $159 million. ACCHC is the only one of the five companies whose sale price was less than the price its shares were traded at during the last trading session.
The ACCHC shares were sold at a price 17 per cent less than in the last trading session, explaining why its shares closed in the red in the session following the execution of the deal to defy the upward trend followed by the other four companies.
Shares of the e-payment platform Fawry grabbed the highest gains among the five companies whose shares were being sold, with almost a five per cent hike on the news. The company, which sold 36 per cent of its shares through an IPO in August 2019, saw a 12.6 per cent stake grabbed by the ADQ.
Both the National Bank of Egypt and Banque Misr snatched a seven per cent stake in the 2019 IPO. It is believed that the stake sold to ADQ was bought from the two banks.
The five deals are not the first sign of ADQ’s interest in Egyptian listed companies. In 2019, it signed an agreement with the Sovereign Fund of Egypt to form a joint fund to invest in different industries.
While nothing materialised concerning the proposed new fund, in 2021 ADQ bought a majority stake in one of Egypt’s largest real-estate developers, the Sixth of October Development and Investment Company. It also acquired majority stakes in drug producer Amoun Pharma as well as in Ismailia Agricultural and Industrial Investments, the owner of food industries brand Atyab.
*A version of this article appears in print in the 21 April, 2022 edition of Al-Ahram Weekly.
The UAE Cabinet announced on 18 April that has approved a great swathe of changes to its visa and residency rules which will come into effect in September of this year.
Key new elements include ending the need for arrivals to acquire sponsorship and allowing visitors to stay for 60 days rather than the 30 days currently.
Parents will also be able to sponsor their male children until the age of 25, up from 18, allowing them to remain in the UAE after school and university.
The UAE Cabinet, headed by the ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum, set out the details in a release by the UAE Government Media Office.
This revealed that it had approved the executive regulations of the Federal Decree-Law on Entry and Residence of Foreigners aimed at strengthening the UAE’s position as an ideal destination to live, work, and invest.
“The new system of entry and residence aims at attracting and retaining global talents and skilled workers from all over the world, boosting the competitiveness and flexibility of the job market and fostering a high sense of stability among UAE residents and families”, it said.
The new regulations will come into force after ninety days from the date of its publication in the Official Gazette.
Substantial amendments are introduced to the Golden Residence Scheme to simplify the eligibility criteria and expand the categories of beneficiaries. This long-term 10-year residence is granted to investors, entrepreneurs, exceptional talents, scientists and professionals, outstanding students and graduates, humanitarian pioneers and frontline heroes.
The amendments allow the Golden Residence holder to sponsor his/ her family members, including spouse and children regardless of their age, and to sponsor support services (domestic) labourers without limiting their number. Furthermore, there is no restriction related to the maximum duration of stay outside the UAE in order to keep the Golden Residence valid.
There are other benefits for family members that allow them to stay in the UAE in the event of the death of the original holder of the Golden Residence until the end of their permit duration.
Golden Residence for Scientists
This residence is granted to scientists and researchers with high achievements and influence in their field based on recommendation from the Emirates Scientists Council.
The candidate should have a PhD or master’s degree in the disciplines of engineering, technology, life sciences and natural sciences from the best universities in the world, as well as substantial research achievements.
Golden Residence for Professionals
A major expansion is introduced in this category to attract highly skilled workers with educational qualifications and professional experience in all disciplines, including medicine, sciences and engineering, information technology, business and administration, education, law, culture and social sciences.
The applicants should have a valid employment contract in the UAE, and should be classified in the first or second occupational level as per the Ministry of Human Resources and Emiratisation classification, which is aligned with the International Standard of Classification of Occupations ISCO by the International Labour Organisation.
The minimum educational level must be a bachelor’s degree or equivalent, and the monthly salary should not be less than AED30,000.
Golden Residence for Exceptional Talents
This residence is granted to top talents in vital fields. It is awarded based on talent only regardless of the educational qualification, employment status, monthly salary or professional level.
It requires the recommendation or approval of a federal or local government entity, and includes talented individuals in culture, art, sports, digital technology, inventors and innovators and other vital fields.
Golden Residence for Real Estate Investors
Real estate investors can obtain Golden Residence when purchasing a property worth no less than AED2 million.
As per the new amendments, investors are also entitled to obtain the Golden Residence when purchasing a property with a loan from specific local banks. Investors can also obtain Golden Residence when buying one or more off-plan properties of no less than AED2 million from approved local real estate companies.
Golden Residence for Entrepreneurs
The executive regulations set flexible requirements for entrepreneurs eligible to obtain the Golden Residence; an entrepreneur should own or be a partner in a startup registered in the country in the small and medium enterprises (SMEs) category and generates annual revenues of not less than AED1 million.
In addition, obtaining approval for a startup idea from an official business incubator or from the Ministry of Economy or the competent local authorities is sufficient to obtain the Golden Residence in this category.
Moreover, if the person is a founder (one of the founders) of a previous entrepreneurial project(s) that was sold for a total of not less than AED7 million, he/she will be entitled to the Golden Residence. The approval of the Ministry of Economy or the competent local authorities is required for projects or ideas.
Golden Visa for Outstanding Students and Graduates
This residence targets high performing students in UAE secondary schools, and outstanding graduates from UAE universities and the best 100 universities worldwide, according to specific criteria that includes their academic performance (cumulative average), the year of graduation, and the university classification.
New Residence Types with Unparalleled Benefits
Major improvements include introducing new 5-years residence tracks to attract talents, skilled professionals, freelancers, investors and entrepreneurs. More benefits are offered to facilitate family members residence, and longer flexible grace periods that reach up to 6 months to stay in the country after the residence permit is cancelled or expired, in addition to facilitating and simplifying the requirements of all residence types.
Green Residence for Skilled Employees
This new track provides a 5-year residency for skilled employees, without a sponsor or employer. The applicants should have a valid employment contract, and should be classified in the first, second or third occupational level as per the Ministry of Human Resources and Emiratisation. The minimum educational level must be a bachelor’s degree or equivalent, and the salary should not be less than AED15,000.
Green Residence for Freelancing and Self-Employment
In line with the growing importance of flexible work models, this track provides a 5-year residency for freelancers and self-employed individuals without requiring a sponsor or employer in the UAE. It requires obtaining a freelance/ self-employment permit from the Ministry of Human Resources and Emiratisation, the minimum educational level should be bachelor’s degree or specialised diploma, and the annual income from self-employment for the previous two years should not be less than AED360,000, or that the applicant proves financial solvency throughout his/her stay in the country.
Green Residence for Investor or Partner
This residence permit is introduced to encourage investment, providing 5-year residency for investors establishing or participating in commercial activities. It replaces the previous residence that was valid for 2 years only. Requirements include approval of the investment and proof of investment. If the investor (partner) has more than one licence, the total invested capital will be calculated. Approval of the competent local authorities is mandatory.
New Benefits for Family Members
The new system provides more benefits to family members, allowing residents to easily issue residence permits for their family members, including spouse and children.
The age of children who may be sponsored has been raised to 25 years (previously 18 years), with no age limit for unmarried daughters. Children of determination are granted a residence permit, regardless of their age.
Green Residences holders are allowed to issue residence permits for their first-degree relatives, and in all cases the residency of family members shall be the validity duration as the original residence holder.
New System for Entry Visas
The new system offers the UAE visitors a variety of visa types for different visit purposes. New types of visas are introduced without requiring a host or sponsor for the first time. Major improvements include facilitating the entry requirements for all visa types, offering flexible visa durations that meet the needs of the visitors and the purpose of the visit. In addition, all entry visas are available for single or multiple entry and can be renewed for similar period(s) and are valid for 60 days from their issuance date.
Job Exploration Entry Visa
This visa is introduced with the aim of attracting young talents and skilled professionals to explore job opportunities available in the country, it does not require a sponsor or a host. It is granted to those classified in the first or second or third skill level as per the Ministry of Human Resources and Emiratisation and the fresh graduates of the best 500 universities in the world and the minimum educational level should be a bachelor’s degree or its equivalent.
Business Entry Visa
This type enables easy entry without requiring sponsor or host to encourage investors and entrepreneurs to explore business and investment opportunities in the UAE.
In addition to the regular tourist visa that is sponsored by tourism establishment in the UAE, a five-years multi-entry tourist visa was introduced.
This type does not require a sponsor and it allows the person to stay in the country up to 90 continuous days, and it may be extended for a similar period, provided that the entire period of stay does not exceed 180 days in one year.
This visa requires proof of having a bank balance of US$4,000 or its equivalent in foreign currencies during the last six months prior to submitting the application.
Entry Permit to Visit Relatives or Friends
As per the current amendment, a visitor can apply for this entry permit if he/she is a relative or friend of a UAE citizen or resident. It does not require a sponsor or a host.
Entry Permit for a Temporary Work Mission
This type is intended for those who have a temporary work assignment like probation testing or project-based mission, and is sponsored by the employer. It requires a temporary work contract or a letter from the employer clarifying the visit purpose and proof of health fitness to work.
Entry Permit for Study and Training
This type is intended for those attending training and study courses and/or participating in internship programmes. The sponsor can be universities or educational or research institutions licenced in the country or government or private entities. It requires a letter from the entity, clarifying the details of the study or training or internship programme and its duration.
The executive regulations of the Federal Decree-Law on Entry and Residence of Foreigners shall come into force after ninety days from the date of its publication in the Official Gazette.