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Bahrain-based fund snaps up UAE utility stake

Abu Dhabi’s Ghantoot Group will reap $147m from selling part of Utico to ASMA Capital, a manager backed by the IDB and two Saudi institutions.

ASMA Capital, a fund manager owned by a clutch of institutions from the Gulf, has agreed to acquire a minority stake in a United Arab Emirates-based utility amid growing demand for power in the country.

Based in Bahrain, the firm is owned by institutions including the Islamic Development Bank, Saudi Arabia’s Public Investment Fund and Public Pension Agency, and the finance ministries of Bahrain and Brunei.

It will make the investment via IDB Infrastructure Fund II, a vehicle launched in 2014 with a $2 billion target. ASMA’s shareholders are also investors in the fund, which held a first close on $750 million the same year, slightly above the $730 million total raised for its predecessor.

Whether another close has been held on the vehicle is not clear.

Utico, which bills itself as the region’s “largest private full-service utility”, is one of the 27 subsidiaries of Abu Dhabi-based holding Ghantoot Group, whose business spans infrastructure, manufacturing and real estate. The conglomerate stands to pocket $147 million from the partial sale.

ASMA Capital said it would also be looking to invest alongside Utico in projects undertaken by the company.

“Utico is making significant investments in the UAE and expanding its infrastructure assets in water, power, transmission and distribution, storage, billing and collection,” the company noted. “Utico hopes to do more deals in the near future and propagate its model of development globally including Saudi Arabia and in over 80 countries, including IDB member countries.”

Previous assets backed by IDB Infrastructure Fund II include Nigerian gas group Seven Energy, a power joint-venture with Korea’s Daelim Group and UAE-based healthcare business Avivo Group.