Al Habtoor Postpones IPO Due To Lack of Suitable Investment Opportunities

Al Habtoor Group LLC, which is under the control of billionaire Khalaf Al Habtoor, has decided to postpone the IPO; as it is not seeing good enough opportunities to invest the proceeds. However, the company may rethink chances of an IPO in 2014. In a recent interview, Khalaf Al Habtoor stated that there are no good opportunities available currently that can give the company nice return, which in turn, can be presented to the shareholders. Khalaf added the company’s initial goal was to invest into something in UK and Germany, but, the touch economic situations at those places are hardly providing them with an option.

Currently, the company will assure funding from the cash on operations. These funds will be used for some of the company’s current projects such as the new skyscraper to be built in Dubai with more than 800 luxury apartments. The development of this particular skyscraper project will start on early half of 2014 and is expected to finish by end of 2015. However, a decision is yet to be made whether the luxury apartments will be sold or rented.

Apart from the skyscraper project, another notable project for Al Habtoor Group is the hotel complex in Dubai, worth $1.3 billion. Recently, an accounting firm named Grant Thornton valued the total worth of Al Habtoor Group (Including Retail, Hospitality and Real Estate Divisions) to be $6 billion.

Khalaf stated that the company doesn’t peoples’ cash to sustain and as no suitable opportunities are there, they will like to refrain from an IPO. He added that the company has already more than $1.6 billion invested into various projects. It is expected that the company will continue to have surplus cash flows until 2015 to continue the development projects. Only after that, it may require a bank loan. Incidentally, the option of an IPO has been weighed by the company for nearly 20 years now.

Many economists believe that the on a whole, the middle-east region is facing an economic slowdown and hence, Al Habtoor Group may have decided to play it safe. The trading volumes in Dubai are the lowest in last 6 years as well.

On 18th December, incidentally, Al Habtoor published information on its earnings for the first time. Comparing with 2011, the company is expecting a profit increase of 16% this year.