Gulf Finance House & Kuwait Investment Company launch US$395 million private placement for Energy City project in India
Manama, Kingdom of Bahrain/ 20 May 2007: Following the success of the Energy City Qatar project, Gulf Finance House (GFH) today officially announced the launch of its US$395 million private placement to raise the equity required to fund the development of the infrastructure of Energy City India. The investment is expected to yield a total return of at least 75 per cent over three years. The equity issue is being underwritten by Kuwait Investment Company (KIC).
Energy City India is the second Energy City in a series of energy focused business clusters planned across the Middle East and Asia. Energy City India will occupy a prime-site of 600 acres in Navi Mumbai (New Mumbai), in the State of Maharashtra, the master-planned, satellite city to Mumbai, the financial and business hub of India.
The project will be located within a few kilometers of Navi Mumbai's upcoming new international airport, which upon completion will be both the largest and busiest in Asia. The project site is also located along the Mumbai-Pune expressway, which is being developed by the Government as a key business corridor.
The Energy City cluster concept provides a complete business infrastructure to both local and foreign oil and gas producers, as well as downstream refiners and producers and businesses involved in shipping, energy trading and support services.
The first of these business clusters, Energy City Qatar, was announced in March 2006 and is being developed in the prestigious Lusail area of Doha in Qatar. GFH raised over US$500 million from regional investors to fund the development of the Qatar project's infrastructure. With most plots within the Qatar project already sold, the project has achieved its initial targets and is now progressing towards the construction of site infrastructure ahead of construction of the buildings.
Announcing the launch of the private placement, Mr. Esam Janahi, Chief Executive Officer and Board Member of GFH, said: "The US$ 395 million Energy City India private placement offers regional investors with an opportunity to participate in the tremendous prospects being offered by the Indian economy, which is growing at a rate of over 9.2% per annum."Â
The private placement initiative, which is currently underway, is only open to institutional investors, and has a minimum subscription level of US$250,000, with subsequent investments in multiples of US$50,000.
"India has tremendous energy needs which are growing by the day. With a strong local offshore oil producing industry and a vibrant energy sector centered around Mumbai and Navi Mumbai, we are already witnessing a steady expansion of energy related infrastructure and capacity. Significant advances have also been made in the areas of renewable and alternative energy sources and in the area of research and development.
"Given this background, we are of the view that this is a project whose time has come, particularly in the context of India's rapid and obvious development,"Â said Mr. Janahi. "Our view matches that of the State Government of Maharashtra which is offering its full support to the project."Â
In October last year, GFH signed a wide ranging Memorandum of Understanding (MoU) with the Government of Maharashtra, in the presence of its Chief Minister, which articulated the Government's commitment to the project.
"Energy City brings to Mumbai and to India a new concept - that of being able to work and live in one holistic environment. No longer will employees have to spend their valuable personal time commuting to work. The project will include a substantial amount of land dedicated to providing accommodation, leisure, medical and shopping facilities to people working at Energy City,"Â said Mr. Peter Panayiotou, Deputy CEO of GFH and Chief Investment Officer
"The Energy City India site is also located right alongside the Mumbai-Pune business corridor. In fact recent land auctions in the vicinity of our site have already registered substantial capital growth. We further expect it to rapidly grow in value over the next three years as the airport construction progresses and the new bridge is completed linking the Navi Mumbai area to downtown Mumbai," he added.
Navi Mumbai is the new growth corridor of the state and is being developed using a master plan designed to decongest the city of Mumbai. Rapidly emerging as a key Information Technology hub, Navi Mumbai is also amongst the largest recipients of Foreign Direct Investment in the country, thereby fuelling other areas of business and economic growth. The new international airport, and the sea-link bridging downtown Mumbai to Navi Mumbai are only some of the major infrastructure projects that are currently underway in the city of Navi Mumbai. -http://v2.gfhouse.com
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