Al Mazaya General Assembly pays 50% cash dividends and 20% bonus share

By issuing 75 million shares of stock worth KD51m, with a nominal value of 100 fils per share and premium of 766 fils per share as a strategic stake that will be sold to strategic investors.

The company capital will be KD45.4m after adding the KD6.8m bonus share, which is equivalent to 20% of the company's capital.

Addressing the shareholders during the meeting, which for which the attendance rate was 78.1%, Mr. Rashid Al Nafisi, Al Mazaya Holding Chairman, said that the General Assembly had agreed to grant 50 fils cash dividends per share and 20% in bonus shares, adding that the capital increase would be allocated to the funding of the company's GCC expansion strategy.

Al Mazaya commissioned Global Investment House (GLOBAL) to negotiate with the strategic investors, who have yet to be announced, stating that negotiations would be conducted with three interested investors and the best offer selected.

Al Nafisi clarified that the selling of the strategic stake woul provide the company with adequate liquidity to fund its outward expansion plans and that the General Assembly had approved all the terms and conditions of this transaction, including terms related to sale of the stake and the dividend, as there were reservations expressed by shareholders, whose stake is 3.2% of the capital, equivalent to 15 million shares.

Al Nafisi said that the board of directors had discussed the offer submitted by strategic investors to acquire a stake of 20-25 percent in their recent meeting, and recommended issuing shares for IPO with a par value of 100 fils and an issue premium of 766 fils per share.

The board has accepted the proposed offer of 23.7% at the price of 866 fils before paying dividends or 680 fils after paying dividends. The increased value will be added to the rights of the shareholders and will establish a solid financial position for the company, enabling it to finance future projects.

Al Nafisi added that the company has 3 regional offices, 2 in Dubai and 1 in Kuwait and there is an intention for regional geographical expansion into several countries, including the KSA, Oman, Bahrain and Qatar, through the establishment of a number of companies, some of which have already been established and others yet to be launched.

The company is gearing up for the announcement of a number of residential projects in Kuwait, the unveiling of a substantial expansion program in Abu Dhabi through its subsidiary, Dubai First Real Estate and the launch of Saudi Mazaya with a capital of SR1.5bn.

Al Nafisi confirmed the company's intention to launch Bahrain Mazaya in 2009, stating that the ongoing expansion will improve the KD109m rights of shareholders and that the current growth of the company's investment is estimated at 10-20%.

In a press statement following the GA meeting, Eng Khalid Esbaitah, Executive Manager and CEO of Al Mazaya Holding, praised the strong position of the company as a key player in the UAE and Kuwait property development markets. 'Our expansion strategy will focus on duplicating the models of our Dubai and Kuwaiti offices in all Al Mazaya Holding subsidiaries across the GCC,' he said.

Esbaitah added that the ambitious plans aim to further improve returns on capital, already 104 percent during 2007, 'We seek to sustain growth, with a special focus on profit growth. The proposed capital increase will provide substantial revenues that will be included in the financial results of the first half of 2008 fiscal year, while the financial results of the first quarter will show growth in comparison with the corresponding period in 2007 as well as those of previous years,' he said.

Speaking of the 23.3% acquisition offer, Esbaitah said, 'We have appointed GLOBAL to manage the negotiations on our behalf, on the condition that no single investor will be entitled to acquire more than 5% of the total capital, which means that the stake sold will be divided among no less than 5 strategic investors.'

Esbaitah revealed that the company has received a number of offers from several potential investors, and has filed more than 20 applications from Japanese, US and European investors who wish to form a strategic partnership with Al Mazaya, adding that each of them have a solid financial position and experience in the GCC market.

Of the company's investment portfolio in the GCC markets, Esbaitah said that it exceeds Dhs20bn ($7bn), including a 45% stake in a KSA-based, SR200m property investment portfolio.

Esbaitah added that Al Mazaya has submitted two initiatives to the government in accordance with BOT regulations, which will be implemented upon approval.