Mubadala Is Said to Explore SR Technics Sale, Satellite IPO

Updated on
  • Fund considering sale of Swiss unit SR Technics and Yahsat IPO
  • Abu Dhabi said to review state-owned firms amid slump in oil

Mubadala Development Co., the Abu Dhabi investment fund, is considering the sale of Swiss aircraft-maintenance business SR Technics and an initial public offering of Yahsat Satellite as the emirate reviews its largest state-owned companies, according to four people with knowledge of the matter.

The government-backed fund has held talks on the possible transactions with banks and any deal will depend on market conditions, the people said, asking not to be identified because the talks are private. Mubadala is also seeking the sale of a stake in U.S. chipmaker Globalfoundries Inc., one of the people said.

Abu Dhabi is reviewing its largest state-owned companies as a slump in oil pressures the emirate’s finances, people with knowledge of the matter said in November. The capital of the United Arab Emirates and source of about 6 percent of the world’s proven oil reserves may also tap the Abu Dhabi Investment Authority wealth fund and issue local and foreign debt to bridge a deficit wrought by lower crude prices, according to Fitch Ratings.

"As an active investor across multiple sectors, we are continually looking at ways to manage our portfolio in line with our long-term vision and mandate to help drive the diversification of Abu Dhabi," Mubadala spokesman Brian Lott said.

The fund held early talks with potential acquirers for all or part of Global Foundries last year, people with knowledge of the matter said in November. It also considered a share sale of SR Technics in 2014, other people aware of the matter said at the time.

Aircraft Maintenance

SR Technics has 3,300 employees and services about 1,050 aircraft, according to its website. Mubadala was part of a group of three United Arab Emirates-based investors that bought control of SR Technics in 2006. In 2011, Mubadala became the sole owner of the company, which was spun off from the maintenance and engineering business of Swissair, the Swiss carrier. Set up in 2007, Yahsat provides multipurpose satellite operations across the Middle East, Africa, Central and South West Asia.

Globalfoundries is one of the largest contract manufacturers of semiconductors, competing with market leader Taiwan Semiconductor Manufacturing Co. for orders from companies such as Apple Inc. and Qualcomm Inc. The company was created when Mubadala bought the manufacturing facilities of Advanced Micro Devices Inc. in 2009 and combined those with its acquisition of Singapore’s Chartered Semiconductor Manufacturing Ltd. the following year.

Mubadala was set up in 2002 to help diversify the U.A.E. economy from fossil resources to industries including aerospace, real estate and financial services, with a portfolio of activities now valued at about $65.9 billion, according to its website.

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