Mubadala, GE set to make first JV co-investments

Abu Dhabi’s $14 billion Mubadala Development Company and General Electric (GE) are on the verge of making their first co-investment under the $8 billion financial services joint venture created in June.

The two entities have identified investment targets but are awaiting regulatory approval from the United Arab Emirates (UAE) central bank, which oversees the joint venture’s activities.

Carlos Obeid, chief financial officer with Mubadala, speaking during Mubadala’s first interim earnings statement on Monday, said the joint venture had eyed attractive investments targets.

“There have been a number of investments in a variety of sectors that have been identified, and once we obtain regulatory approval we can proceed with some of those investments,” Obeid said.

Greg Fewer, Mubadala’s associate director of project corporate finance, told news agency Zawya Dow Jones in an e-mail that the joint-venture required a commercial trade licence from the UAE central bank before it made any investments.

Under the joint venture agreement, Mubadala and GE will both put $4 billion over three years into commercial endeavours.

An accompanying commitment from Mubadala was its pledge to become, in time, one of GE’s biggest 10 shareholders.

In the interim earnings statement, Mubadala revealed its asset base grew by 46 per cent in 2009 to $21.6 billion in the first half of calendar 2009.

In its first annual report, released in April, Mubadala stated that the financial crisis had ripped $3.2 billion in losses from its portfolios.

Since then, however, higher oil and equities spurred a comeback in asset valuations and its total comprehensive income rose to $735 million, although its operating income fell by 42 per cent to $243 million.

The biggest revenue drivers were oil and gas sales, primarily from its fully owned subsidiary, Pearl Energy of Singapore, and its 51 per cent holding in Dolphin Energy, a UAE company.