Mubadala GE Capital commits $2b

Mubadala GE Capital PJSC has committed $2 billion in financing over 45 transactions in the Middle East and North African region in its first year of operations, a top official said.

The joint venture, equally owned by Mubadala Development Company and General Electric, provided structured financing across 14 different industries, Mubadala GE Capital Chief Executive Officer Ron Herman said in a briefing, attended by local and international media here on Monday.

He observed that there is increased demand for capital to fund private sector growth and expansion in the region.

The firm obtained a licence in January this year and went into business in operations offers commercial lending, leasing and equity finance across key sectors such as power and water, infrastructure, energy, healthcare, aviation and industry.

Herman said the recent deals include acquisition finance for an oil and gas company in the country and a corporate finance deal for a company in Jordan.

The specialised commercial finance company also plans to close in two weeks an aircraft financing deal for an Abu Dhabi-based company, he said adding that it will make a secondary acquisition of a minority equity interest in a Gulf power asset towards the end of the week.

“Throughout the region, there is a good market for financing,” he said. “The regional nations are investing heavily in oil and gas, water and power, healthcare, transportation and logistics, aerospace and industry to expand current capacities and creating                    new projects.”

Licenced in January 2010 by the UAE Central Bank, Mubadala GE Capital combines the international corporate finance experience of GE Capital with the regional insights of Mubadala.

“By providing growth capital to businesses in the region, we are helping them increase sales, better manage their balance sheets and achieve their long-term business objectives,” said Herman.

“In turn, this will contribute to the economic growth and diversification of all the markets we serve from our strategically located headquarters in             Abu Dhabi.”

“Mubadala GE Capital represents a very important business for us here in the vibrant Middle East region where the need for growth capital will remain significant for many years to come,” GE Capital EMEA President and Chief Executive Officer Richard Laxer said.

Over a five-year period, GE Capital and Mubadala will each allocate up to $4 billion in equity to support Mubadala GE Capital, which has two strategic pillars: access to investment opportunities generated through GE Capital’s existing global activities, and building a Middle East and Africa Origination platform with select focus areas aligned to both partners’ capabilities and regional presence.

Infrastructure fund

Abu Dhabi investment fund Mubadala is open to raising its stake in General Electric Co, and expects to close a joint infrastructure fund with the US firm worth $500 million in 2011, its chief operating officer said.

The Abu Dhabi investment fund is the 14th largest shareholder in GE with 76.92 million shares, or 0.2 per cent of the total. “It is a solid investment and if market conditions allow Mubadala could raise its stake in GE,” Waleed Al Muhairy told reporters.

The infrastructure fund between Mubadala, GE and Credit Suisse invested $300 million in its first closing a few months ago, and expects to increase it to $500 million in 2011, he said.