Abu Dhabi’s IPIC Posts Loss After $1 Billion UniCredit Writedown

  • Fund records write-down of $998 million on 5% stake in lender
  • IPIC merging with Mubadala to create $125 billion entity

Abu Dhabi sovereign fund International Petroleum Investment Co. posted a first-half loss after its shares in UniCredit SpA slumped.

IPIC recorded a loss of $91 million compared with a $1.25 billion profit a year earlier, the Abu Dhabi-based company said in an e-mailed statement on Wednesday. It posted a $998 million loss due to marking to market its 5.04 percent stake in Italy’s UniCredit, whose stock declined 62 percent in the first six months of the year.

IPIC is merging with Abu Dhabi fund Mubadala Development Co. to create an entity with assets of about $125 billion and debt of about $42 billion. Abu Dhabi, holder of about 6 percent of global oil reserves and IPIC’s sole owner, is cutting spending, tapping reserves and driving mergers at state-owned companies to cope with oil prices that have fallen more than 40 percent in the past two years.

IPIC’s first-half revenue retreated 14 percent to $16.09 billion, and its operating profit declined 7.7 percent to $1.43 billion. The company’s core energy sector investments were “robust” despite the lower oil price environment and its downstream portfolio recorded “healthy margins,” the statement said.

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