Gulf Capital Acquires Stake in Maritime Industrial Services Co.
Gulf Capital, the highest capitalized investment company in the UAE, announced that it has acquired, as part of a large investment consortium, a 21% stake in Maritime Industrial Services Co. (MIS), a regional leader in the oil and gas construction and services industry.
Gulf Capital's stake, which will position it as the largest shareholder in MIS, was acquired as part of a larger private placement that raised $80 million for MIS on the Norwegian over the counter (OTC) market.
The private placement will enable MIS, which provides a fully integrated onshore and offshore engineering, procurement, fabrication, construction and shipyard service, to capitalize on the current boom in offshore oil explorations and allow it to enter in a major way into the rig manufacturing business. The current high demand for oil and gas has resulted in an unprecedented amount of offshore exploration activities and boosted worldwide offshore rig utilization to 86%, one of the highest levels ever.
This high utilization rate has put pressure on average rig daily rental rates which have peaked at record levels of up to US $180,000 - $200,000 per day. Middle Eastern jack up drilling rigs are working at close to 100% utilization rates and the GCC market for jack up rigs is the fastest growing in the world. MIS, with its extensive offshore construction and fabrication experience and with yards and operations in the UAE, Saudi Arabia and Kuwait, is ideally positioned to meet the large demand for offshore rigs.
MIS has already secured an order to build two Friede & Goldman designed Super M2 Jack up rigs for MOSVOLD Jackup Ltd., a Bermudan registered Norwegian Shipping Company, with an option to build two more rigs in the future. The construction is under progress in MIS' 200,000 square meter yard which has a capacity to build up to 10 rigs by 2010. As the conventional new build yards around the world have filled their order books and reached maximum capacity, the focus has now turned to newcomers such as MIS who can build such rigs. MIS, with one of the largest yards in the Middle East, is well placed to join the ranks of the Singaporean and US building yards.
Commenting on the deal, Dr. Karim El Solh, Chief Executive Officer of Gulf Capital, said, 'By investing in MIS, Gulf Capital will receive unique exposure to the fast growing regional oil and gas offshore industry. As a 'partner in growth', our aim is to acquire sizeable stakes in premier companies which have a leading market share, strong management and an outstanding growth potential in a promising industry. MIS fits exactly these investment criteria.'
Mr. Chuck Davis, Chairman of MIS, said, 'We are excited about the positive impact Gulf Capital will have on our growth prospects. We look forward to their active participation in our board and their help with strategic relationships, acquisitions and regional expansion. Gulf Capital's investment is a strong demonstration of their confidence in our management, strategy, and our future growth plan.'
Mr. Jerry Smith, Managing Director of MIS, added, 'With the financial backing of Gulf Capital and the other investors in the latest offering, the support of our Board and our established track record in the onshore and offshore engineering and fabrication industries, we are confident that MIS will be able to capitalize on the opportunities presented by the fast growing oil and gas industry in the region. This capital injection will allow us to increase operating revenues in 2007 by more than 100%.'
Dr. El Solh concluded, 'The region's unprecedented growth in the oil and gas industry, especially in the offshore arena, provides an exciting context for Gulf Capital's investment into MIS. We are looking forward to assisting MIS in its subsequent phase of growth and to helping it reach its full potential.'
Established in the Middle East since 1979, MIS has achieved a strong track record in the petroleum-related construction and services industry. MIS focused on local drilling rig fabrication, repairs and maintenance, adding project management services and oilfield safety in the early 1980's to expand its customer base and scope of services. By 1990, MIS was established in the Middle East as a major onshore engineering, fabrication and services company with a reputation for high quality and on time delivery, executed by experienced operating management. Today MIS provides integrated onshore and offshore engineering, procurement, fabrication, maintenance and construction services for fabrication of oil, gas and petrochemical processing equipment, marine and structural items.
Gulf Capital is a leading alternative investment company focused primarily on investing locally raised capital in the GCC region. Incorporated in Abu Dhabi in 2006 as a Private Joint Stock Company, Gulf Capital was established with a capital base of AED 1.225 billion (US $330 million) from 300 of the most prestigious institutional and individual investors in the Gulf. Gulf Capital is focused on acquiring sizeable and controlling stakes in highly profitable and rapidly growing companies within a select number of emerging industries in the GCC region. Gulf Capital is rapidly emerging as a leader in the field of private equity investing in the Middle East.
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