Archive for the ‘Regional News’ Category

Zuffla LLC’s Ultimate Fighting Championship (UFC) is potentially a billion dollar-plus company, based on reported prior buyout offers of similar amounts. Abu Dhabi’s 10% stake thus, while undisclosed, could be upwards of $100 million. UFC is the largest grossing PPV franchise in history, having beaten its own record in 2009 at $349 million. With seemingly plenty of growth still possible in the U.S., the UFC and Abu Dhabi have their eyes set on international growth — and of course on some MMA action in Abu Dhabi. See the clip (and link) from Yahoo! Sports below for more details.

clipped from sports.yahoo.com Zuffa LLC, the parent company of the Ultimate Fighting Championship, announced on Tuesday the completion of a deal in which a 10-percent interest in the company to the Abu Dhabi government-owned Flash Entertainment. Flash Entertainment was formed two years ago by the Abu Dhabi government’s Executive Affairs Authority, which brings big-name entertainment and sporting events to the United Arab Emirates and the city, including big-name concerts, Formula 1 racing, and in recent weeks, a Rihanna New Year’s Eve concert and the Capitala World Tennis Championship. Sheikh Tahnoon Bin Zayed Al Nahyan, who is affiliated with Flash Entertainment, is an MMA fanatic who promoted early world submission grappling championship events through the Abu Dhabi Combat Club. He was attending college in the U.S. and saw the first UFC event live in 1993.

The Dubai Exchange rallied 10.4 percent yesterday in the wake of a $10 billion credit line from Abu Dhabi, coagulating some of the recent hemorrhaging.  A portion of the funds will reportedly be used to meet a $4.1 billion bond payment owed by Nakheel–a real estate subsidiary of Dubai World.  Though seen as a positive step in restoring fiscal balance, the process, in the view of one market analyst, “is far from over.”  (See Financial Times coverage and also read TF21 Managing Partner Lew Nescott’s take on the viability of Dubai.) 

A $25B joint venture was announced earlier today between Qatari Diar Real Estate Investment Co. and Deutsche Bahn AG, to build a railway system in the very liquid Gulf state of Qatar — the world’s largest producer of liquefied natural gas and the issuer of $7B of 4x oversubscribed bonds last week. Qatari Diar is a real estate company owned by the state’s sovereign wealth fund. It owns 51% of Qatar Railways Development Co., while Deutsche Bahn owns the remaining stake. The three phase project has an expected completion date of 2026, but Reuters reports that a major section will be done by 2022, when Qatar hopes to host the FIFA World Cup. The project includes passenger and freight trains, as well as connections to Saudi Arabia and Bahrain.

As Gulf states continue to spend tens (make that hundreds) of billions of dollars on infrastructure and other domestic projects, TradeFlow21 believes that it is a terrible mistake, for whatever reason, for American businesses and politicians to miss opportunities to do business and deepen ties with the Gulf. Qatar’s GDP is expected to grow over 9% this year and upwards of 35% next year, both clips by far the fastest among the GCC.

Hats off to Rothschild for its successful M&A advising in the Gulf; and it looks like the investment bank is far from finished. Rothschild recognizes Saudi Arabia (the Gulf’s largest economy and one that is poised for sustained solid growth) and Qatar (which is forecast to grow over 9% this year and a whopping 35%-plus next year thanks to an expansion of LNG capacity and exports) as the two places it most desires to grow its business. See clip from Reuters below.

clipped from www.reuters.com Rothschild busiest in Mideast M&A DUBAI (Reuters) – Rothschild ROT.UL has been the Middle East’s busiest advisor on mergers and acquisitions so far in 2009, data shows, underlining the growth potential for independent investment banks in the region. “Our strategy is long-term driven, our view remains that we expect this to be one of the fastest-growing regions,” said Michael Helou, co-head of investment banking in the Middle East for Rothschild. “The crisis didn’t change our plans, it’s been almost business as usual,” Helou said, adding that Qatar and Saudi Arabia are the regional markets where the investment bank sees more opportunities to expand its presence.

The Institute of International Finance (IIF) is forecasting a return to solid growth for Gulf Cooperation Council (GCC) states in 2010. The IIF expects current account and fiscal surpluses to remain “sizable,” driven by a recovery in oil prices. The partners of TradeFlow21 believe that while oil of around $70/bbl is less than half of last year’s peak, its more than doubling since the trough, not to mention the sizable domestic investments made by the GCC, make the soundness of their economies and finances all the more laudable. In fact, according the IIF, the Gulf’s non-hydrocarbon sector, which employs 95% of the labor force, avoided a recession in 2009 (with a growth forecast of 2% this year and 4% next year).

IIF GDP forecasts for the GCC:

Qatar — ’09: 9.3% and ’10: 35.5% (fueled by LNG exports and capacity expansion)
Oman — ’09: 5.2% and ’10: 9.7%
Bahrain — ’09: 1.9% and ’10: 4.1%
Kuwait — ’09: -1.9% and ’10: 4.0%
Saudi Arabia – ’09: -1.2% and ’10: 3.5%
United Arab Emirates — ’09: -1.5% and ’10: 3.4%