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U.A.E Yacht Builder Gulf Craft May IPO in 2-3 Years on Recovery

Gulf Craft LLC, a United Arab Emirates builder of motorboats and yachts, may sell shares in two to three years amid a recovery in the Persian Gulf nation’s equity markets, Chief Operating Officer Erwin Bamps said.

An initial public offering “will be on the horizon probably in two, three years,” Bamps said in an interview at the Dubai International Boat Show today. “In the meantime, we will expand our line of products, gain market share and build value in the brand and the corporate identity.”

Arab uprisings that ousted leaders in Egypt and Tunisia and Europe’s debt crisis slowed regional share sales the past two years. Money raised from IPOs in the Middle East and North Africa reached $2 billion in 2012, according to Ernst & Young International. In 2008, IPOs worth more than $80 billion were announced, according to data compiled by Bloomberg. U.A.E. stock markets are recovering, with Dubai’s DFM General Index rising 16 percent in January, the best start to a year on record.

The stocks rally is being buttressed by a recovery in Dubai, whose economy probably expanded 5 percent in 2012, the fastest pace since 2007, according to government estimates. Passenger traffic through the emirate’s airport rose 13 percent last year, making it the world’s third-busiest, according to Dubai Airports. The city’s property market is starting to recover in prime locations after prices fell 65 percent from a peak in 2008.

Revenue Growth

Revenue at Gulf Craft grew 20 percent in 2012, Bamps said. The company may disclose financial results to the public in a year as it gears up for the potential IPO, he said. The company's founders, the Al Shaali family, had a history of operating traditional wooden dhows.

Gulf Craft builds about 400 boats a year and relies on its own income to fund operations and expansion, according to Bamps. Last year, it invested 12 million dirhams ($3.3 million) on new machinery and products, Bamps said.

The U.A.E., the second-biggest Arab economy, has three equities bourses, Nasdaq Dubai, Dubai Financial Market and Abu Dhabi Securities Exchange. Gulf Craft, which hasn’t decided where it may list its shares, initially expressed interest in an IPO in 2006, before the onset of the global credit crisis stalled the plan.

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