UK contractor agrees $13.7m cash deal to sell entire share in Dutco Balfour Beatty and BK Gulf
Balfour Beatty, the international infrastructure group, has announced plans to exit two Middle East joint ventures.
It says it has reached a cash agreement with its joint-venture partner to sell the group’s entire share of Dutco Balfour Beatty and BK Gulf – subject to regulatory approval – for a total cash consideration of $13.7 million.
In a statement released on its website, the UK-based contractor said that the local partner would assume responsibility for Balfour Beatty’s guarantees of bonding obligations in the joint ventures as part of the transaction.
The contracting giant had been in partnership with Dutco as a main contractor, and with BK Gulf in MEP contracting since the 1970s. Both local firms employ about 6,000 staff each, and have worked on a number of high profile projects in Abu Dhabi and Dubai.
Since the start of 2015, Balfour Beatty has been exiting operations in the Middle East, Indonesia and Australia as part of its strategy to focus its attention on its chosen markets in the UK, USA and Far East.
“We continue to simplify the Group and strengthen the balance sheet through our Build to Last programme. As a result, Balfour Beatty enters Phase Two of its transformation with a solid foundation for long term profitable growth,” said Leo Quinn, group chief executive.
Dutco Balfour Beatty has been involved in a number of major infrastructure projects in the UAE, including Sheikh Zayed Road interchange numbers 3, 4 and 5. It has also worked on the Business Bay Creek Extension project and the development of Qaffay Island.
Tariq Baker, Dutco Group chief executive, told The National that the company had enjoyed a successful relationship with Balfour Beatty for more than 40 years.
“A review of the strategic objectives of the two shareholders suggested that the time was right for a new chapter to be written for the joint businesses. This would allow Balfour Beatty to focus on their target areas of operation, which no longer includes the Middle East,” he told the Abu Dhabi-based newspaper, adding that there would be “no fundamental change to our existing operation” in the wake of the sale.
“Dutco is part of the original fabric of construction in this area and we continue to believe we have a significant role to play in the development of the country,” said Baker. “We have a strong order book and we are committed to grow the business in a controlled and focused manner.”
MEConstructionNews.com contacted BK Gulf for comment, but had not received a reply at the time of publication.
Credit: meconstructionnews.com
