INTERVIEW - Unicorn eyes Dubai's Bank Islam stake

MANAMA Sun Oct 11, 2009 2:48pm IST

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MANAMA (Reuters) - Bahrain's Unicorn Investment Bank is interested in buying Dubai Group's stake in Malaysia's Bank Islam and plans to issue sukuk in Saudi Arabia before the end of the year, its chief executive said on Sunday.

Dubai Group, an investment vehicle owned by the ruler of Dubai, said Oct 1 it is reviewing its options for the 40 percent stake in Malaysia's second largest Islamic bank as it shifts its focus closer to home.

"We could be interested," Majid al-Sayed Bader al-Refai told Reuters in a phone interview when asked whether the Islamic investment house was interested in the stake. He didn't elaborate whether Unicorn was in talks with the Dubai-based bank.

Unicorn already tried to acquire a stake in the bank in 2006. It said in 2008 it planned to spend around $2 billion on acquiring banks, including in Asia. Al-Refai said on Sunday banking valuations had dropped considerably since then, likely lowering the amount Unicorn would spend on buys.

"We're in strong discussions with two to three institutions," he said.

"We're interested in the Gulf and Malaysia", he said when asked where these institutions were located.

The emerging $1 trillion Islamic finance industry has grown on a five-year long oil boom that ended last year and has yet to see its first wave of consolidation.

It lacks lenders large enough to compete with the Islamic windows of global conventional banks in investment banking and debt arranging services.


"It is our intent to launch a sukuk in Saudi-Arabia during the fourth quarter," Refai said.

He declined to provide an amount. Refai had told Reuters in April Unicorn planned to launch a $425 million sukuk during the second or third quarter.

The Gulf Arab sukuk market is slowly recovering after being hit by the global liquidity freeze with Kuwait Projects Co's (KIPCO) $500 million sukuk issued last week being the first private sector issue to international investors from the region this year.

Refai also said Unicorn was not interested in making any private equity acquisitions in the United States at present.

"The way the markets are at the moment we're not interested in making deals outside the Gulf at the moment," he said.

Unicorn was part of a private equity consortium that bought Qatar Engineering and Construction in September for about $110 million from Qatar Shipping Co.

Qatar America Asia Consortium (QAAC) and The First Investor (TFI) acquired a 41 percent stake each in the company. Qatar First Investment Bank (QFIB) is also part of the consortium.

Refai said Unicorn holds a 10 percent stake in the consortium.

(Reporting by Frederik Richter; Editing by John Irish)

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