Three sources who are familiar with the decision said Dubai Holding's private equity arm is contemplating on the possible sale of Mauser, a German packaging group. The potential sale would reportedly pick up somewhere between EUR1 billion or USD1.4 billion and EUR1.5 billion.
Should the sale happen, Reuters had dubbed it in its report as the largest asset exits done by Dubai since it experienced a debt crisis in 2009. Dubai Holding is owned by the emirate's ruler. The debt crisis had sent some of the state entities to restructure debt and ask for more time to comply with its repayments. Although it showed strong economic growth, largely because of its recovery in property, trade and tourism, its core sectors, the emirate was still facing USD50 billion in debt repayments over the next three years, said the Reuters report. As such, the emirate was reportedly needing to exit from some of its assets to raise funds solely for repayments.
Two of the sources were from the banking sector, and refused to be identified as the talks were private. They said Dubai International Capital (DIC) planned to conduct a formal sale of Mauser by January of next year. A third source said the banks who had been working with potential buyers of Mauser made their visits in Dubai to meet with DIC in the last two weeks to discuss about the sale. DIC would be expecting formal bids to be submitted in the first quarter of next year.
The source added, "Mauser has been a great turnaround story and DIC is keen that they get the best value for it through a competitive process. They have been waiting for a good time to dispose this and looks like it will be next year,"
The sources also disclosed that Bank of America Merrill Lynch had been tapped to assist DIC regarding the sale.
Mauser was acquired by DIC from the buyout unit of JP Morgan Chase Inc for EUR850 million or USD1.2 billion in 2007. Mauser is a maker of packaging equipment tha include cans and drums to be used for transportation of medical waste and other biohazard materials.
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