Replies to post #237695 on Sulja Bros. Building Supplies, Ltd (SLJB)

[CaesarStone]

Middle East is world’s largest project finance market - 11/6/2006




The Middle East has become the largest Project Finance market in the world, according to HSBC.

Of the global total of US$98.5 billion in project finance debt raised in the first half of 2006, US$33 billion, or one dollar in every three, was raised for Middle Eastern projects.
“The rapid rise in demand for project finance is symptomatic of the rapid growth in regional economies, the rising profile of the Middle East in the global investment community, and the recognition of international debt providers of the fundamental strengths of the region in terms of risk,” explained Darren Davis, HSBC’s Head of Project Finance for the Middle East and North Africa. “Expansion in infrastructure investment has been rapid with all sectors seeing growth, not only the traditional energy-based projects. In addition, both governments and regional corporates are increasingly turning to project finance as a means of financing their infrastructure needs in sectors such as transport and non-power utilities.”
Project Finance is a mechanism of raising finance to fund the development of major industrial and infrastructure assets. Project finance debt is provided by lenders on the basis that repayment of the debt will come from the cash flows generated by the asset being financed. The structure of project finance allows developers to leverage their investment returns without taking on significant long term risk.
The growth in the market has been driven by the needs of the rising population and the increased liquidity in the region as a result of the sustained strength in oil prices. Approximately US$7 billion was raised in project finance debt in 2001 compared to US$33 billion in the first half of 2006, “a figure which we expect to rise to at least US$45 billion by the end of this year,” says Davis.
With the world investment community increasingly seeing the Middle East as an attractive investment opportunity, international banks have substantially increased their presence in the region both on the ground and in terms of the amount of debt they are committing to regional borrowers.
But even with these new entrants, there could be a shortage of debt capital to support the level of funding required by the enormous projects planned for the region. The answer, believes HSBC, will come from the region accessing the international debt capital markets. “This is a trend that has already begun, and will accelerate,” says Davis. “This will mean that those institutions with the global distribution capabilities, as well as strong balance sheets, will be able to reap the rewards.”
HSBC, which has the largest project finance presence in the Middle East, remains the leader in advising regional governments and corporates on the raising of project finance debt. Some recent milestones transactions on which HSBC acted as advisor include:
• In Saudi Arabia, Al-Waha Petrochemical Company’s US$1 billion project which included the first fully stand-alone Islamic financing facility for a project.
• The largest ever privately sponsored petrochemicals plant in the region – the US$2.5 billion Saudi Ethylene & Polyethylene Company’s project in Saudi Arabia
• The Shoaiba Independent Water and Power Project in Saudi Arabia – the first privately developed water and power facility in Saudi Arabia.

http://www.ifpexpo.com/News_show_news.asp?id=2700

[CaesarStone]

Investors return to Lebanon

Investing in a recently pacified war zone may not be most people's idea of smart business, but some with financial ties to Lebanon still see opportunity.
Ben Gilbert reports.
Text of story

KAI RYSSDAL: President Bush wants you to invest in Lebanon. 'Least, that's what he said. The actual phrase was that the U.S. wants Lebanon ‘not only to recover but to flourish. ‘ The President put taxpayers' money where his mouth is. He promised $230 million in reconstruction assistance. And he urged American companies to get back into Lebanon as soon as possible. They've been there before. Beirut had billions of dollars in U.S. capital flowing in before the bombing started this summer. Ben Gilbert reports now on what it might take to get them to go back.

BEN GILBERT: Investing in a recently pacified war zone may not be your idea of smart business, but to Salah Al-Mayhyal, it was an opportunity.

SALAH AL-MAYHYAL: ‘I'm serious. There is no joke about it. Grab it now because prices will shoot up very soon. Al Mayhyl is the Kuwaiti Manager of Levant Holdings, which is already managing one of the largest projects in Beirut at the moment: a $1.3 billion luxury apartment block, hotel and mall right in the city center on Beirut's Martyr's Square. Before the war, property retail prices were topping out at around $600 and $700 per square-foot. They're down to $300 and $400 per square-foot now. And Mayhyl was back in town last week, looking for deals.
AL-MAYHYAL: ‘Lebanon is still very attractive for investors. So, we are studying other projects, and even bigger than this project that we are developing now. So we're definitely very bullish toward investing in Lebanon. ‘

When the war began in July, the hundreds of construction projects fueled by oil-rich Gulf investors stopped. The jackhammers fell silent, and the largely Syrian construction crews fled home. Levant Holdings returned millions of dollars in cash to its shareholders as a precaution. But now, Mayhyl says the shareholders are calling him, asking when the project will begin again. He says the investors will meet in October to make a final decision on the project, but he has no doubt it will continue.

AL-MAYHYAL: ‘Even after what's happening here we are still very optimistic. The peace has to come, and what happened between the Israelis and the latest conflict is not going to happen again. ‘

Most project managers interviewed for this story are very optimistic about the future. It's their job. But despite his positive attitude, Mayhayl's development is still on hold. And so are 10 of the largest projects in Beirut's downtown area. Many investors are understandably nervous about Lebanon's instability.

Michael Dunn is an investment advisor in Lebanon. His firm was about to finalize the contract on a $350 million project just south of the capital, anchored by a well-known European retail company and funded by a Saudi firm. If you drive by it, he says you'll see

MICHAEL DUNN: Absolutely nothing. That's what worries me. It was all due for signature in the last week of July and I'm afraid it's probably not going to happen in the next six months. It's probably not going to happen in the next year. But we haven't given up and I'll be over to Kuwait to see what we can salvage in the next two weeks. ‘

Dunn expects most of his European and American clients will wait for the dust to settle before moving forward on projects.
DUNN: ‘The Arab investors, on the other hand, are slightly more used to these type of events, and already we are working with people who are looking to invest in this country. ‘
Economist Marwan Iskander says there's hope in the fact that many companies already have a major stake in completing the projects they've started:

MARWAN ISKANDER: ‘You have to take into consideration that these are projects where the properties have been bought, so a major part of the investment has been already dispensed with. And you don't go into a final stage, so to speak, of a property you have bought for tens of millions of dollars. ‘
Iskander points out that no company has cancelled a project yet. And the Four Seasons, the Hilton and other hundred-million-dollar projects by international firms continue as scheduled.

Even as Lebanon's stability remains in question, many investors are still gunning to create the biggest shopping district in the Middle East.

http://www.ifpexpo.com/News_show_news.asp?id=2662

[benzdealeror2]

Cool...Much thanks!

[Grande25]

Is there anyway to verify attendance or see what vendors have signed up? Someone said they saw something where it said there would be two reps from north america... anyone have a link to that info?

hrrrmmmmm, there PR says they are the only north american delegate attending (as of the PR date). Maybe that's where I heard the North American comment.

I poked around on the IFP site to no avail.

TIA