Two UAE firms sign Dh3b worth of Russian deals
Muzaffar Rizvi
18 September 2010
DUBAI — Two UAE firms on Friday signed agreements worth Dh3 billion ($800 million) in Russia to create joint companies to manage foreign direct investment in infrastructure and real estate sector.
Luxury property developer Damac Properties and Sharjah-based Gulftainer signed the deals on the sidelines of the 9th international investment forum in the Russian Black Sea resort city of Sochi.
Gulftainer, a subsidiary of the Crescent Group of companies and the largest private port and logistics operator of the Middle East, signed a major joint venture agreement with Prominvest, the financial and investment arm of Russian State Corporation, Russian Technologies.
Badr Jafar, Executive Director of the Crescent Group and Vice-Chairman of Gulftainer, and Mikhail Shelkov, CEO of Prominvest, signed the first agreement in the presence of Vladimir Putin, Prime Minister of the Russian Federation.
The new joint venture company, Gulftainer Russian Technologies, will pursue investments and management opportunities in the complete logistics chain within the Russian Federation and the rest of the Commonwealth of Independent States including strategic port assets and related infrastructure.
The joint venture also announced plans to establish a fund of $500 million to acquire port and logistics assets in Russia and the region, some of which have already been identified by the partners.
The Damac Group developer will also commit $300 million for another fund investing in real estate including the facilities for the 2014 Winter Olympic Games in Sochi.
"We have always been interested in investing in the CIS countries and this joint venture presented us an opportunity to enter into a market with great potential and a strong regulatory and transparency framework,” Hussain Sajwani, Chairman of Damac Properties, said in an e-mailed statement to Khaleej Times.
He commended the Russian authorities for all their assistance in establishing this joint venture.
"The rapid growth of the Russian economy will increase demand for more efficient and a wider range of port and logistic services — Gulftainer and Prominvest will together meet that challenge using Gulftainer’s well established reputation for optimum efficiency in the Ports and Logistics industry, plus the vast expertise and local knowledge of the successful Prominvest organisation in Russia,” Badr Jafar, Group Vice-Chairman of Gulftainer, said.
Crescent Petroleum had earlier signed a joint venture agreement with Rosneft, one of Russia’s largest energy companies to invest in energy exploration opportunities in the region.
Gulftainer Managing Director Peter Richards said the investment potential in Russia and the CIS is huge in ports, related infrastructure and logistics. "We are very confident that aligning our two organisations’ proven track records and know -how will prove successful in meeting Russia’s need for enhanced logistics operations , assisting Russian exporters and importers access to world markets.”
Prominvest CEO Mikhail Shelkov said: "We are at the forefront of co-operation between Russia and the Gulf region and this agreement firmly establishes the commitment of our organisations to develop and expand supply chain logistics in the Russian Federation.”
State Corporation Russian Technologies is the biggest industrial holding in Russia with a monopoly on strategic markets. With over 700 subsidiaries Russian Technologies is involved in every aspect of the day-to-day business in Russia. Prominvest, the investment arm of Russian Technologies, plays an active role in the establishment and management of assets and, in future, holdings of the corporation. It is responsible for implementation of its parent company’s investment policy.
Sajwani concluded by saying that Damac Properties is making good progress on all its current projects, having delivered over 3,600 units so far and will be delivering more than 3,500 units across the GCC over the next 12 months.
