AGILITY EXPLORES $1bn BOND AND A BID FOR ABRAAJ

▶ Kuwaiti logistics company is looking to expand its industrial real estate and warehousing business

Kuwait’s Agility is considering a bond issuance of up to $1 billion (Dh3.67bn) in 2019 to fund expansion and remains confident of an investment deal in part of embattled private equity player Abraaj, its chief executive said.

The logistics and warehouse company, which plans to invest $1.6bn by 2020, is seeking to grow its industrial real estate and warehousing business across emerging markets to meet growing demand driven by e-commerce transactions, Tarek Sultan said.

It could raise finance from either syndicated bank loans or a dollar bond issuance, and will make a decision based on market conditions and pricing.

“A good part of our investment programme will be financed with banks but we consider the possibility of a bond for next year,” Mr Sultan said. “We’re open to going down the route of issuing bonds provided its more attractive than going through syndication.”

Agility is expanding to diversify its revenue streams and reach its target of $800 million earnings before interest, taxes, depreciation and amortisation (ebitda) by 2020. Last year’s ebitda grew 17 per cent to 135m Kuwaiti dinars (Dh1.63bn).

The Kuwaiti company has also teamed up with an investment firm in its bid to acquire part of Abraaj’s business.

The Dubai company, which is undergoing a provisional liquidation in the Cayman Islands, is looking to sell part of its fund management business Abraaj Investment Management.

Agility expressed an interest in the company in July.

Negotiations over the deal are continuing at a “very slow” pace, Mr Sultan said, without revealing the name of the partner.

“Those talks are on a slow-burner, the discussions are still taking place,” Mr Sultan said.

“I wouldn’t describe them as being in advanced stages, there’s open levels of communications and we’re still exploring ideas.”

Agility remains “confident” that its business track record in emerging markets makes for a “compelling argument” to limited partners in Abraaj’s funds to choose the Kuwaiti company’s bid.

Mr Sultan said the company expects to turn an annual profit in 2018 and that it would be “safe to assume” a growth in annual earnings next year, up from 2018 as its logistics and infrastructure business continues to grow.

Agility, which is listed in Kuwait and Dubai, is bullish on emerging markets in Africa, where it has invested heavily, as well as the Middle East and South East Asia.

“We’re bullish on technology and how it intersects with emerging markets and smalland medium-enterprises,” he said.

Agility earlier this week announced it will invest $100m in digital logistics website Shipa.com that allows small businesses and entrepreneurs to manage their freight and deliveries online.

“With the growth of e-commerce and the initiatives to approach the Middle East market, it is timely to come up with a one-stop shop for e-commerce providers to address the region as a whole,” he said.

“It’s still early days for e-commerce in the Middle East and there is tremendous market potential.”

Mr Sultan, whose company operates in more than 100 countries with 22,000 employees, expressed concern about the effect on global economic growth from rising trade tensions between the United States and China, he said.

“We’re a global company so anything impacting global growth will impact us in some way shape or form,” Mr Sultan said. “The trade dispute is somewhat concerning.”

His perception is that the negotiations between the world’s two top economies would be resolved in a “positive way,” he said.

A good part of our investment programme will be financed with banks but we consider the possibility of a bond TAREK SULTAN Agility CEO