By Aarno Schuetze and Dinesh Nair
The private equity arm of Dubai Holding, owned by the emirate's ruler, is weighing the sale of German packaging group Mauser, three sources aware of the matter said, in a deal seen fetching between one billion euros ($1.4 billion) and 1.5 billion.
The sale of Mauser would be one of the largest asset disposals by Dubai since its debt crisis in 2009, when several of its state entities were forced to restructure debt and seek more time for repayment.
Backed by a recovery in core sectors such as property, trade and tourism, Dubai is now witnessing strong economic growth and renewed investor confidence.
Yet the emirate, facing debt repayments of about $50 billion over the next three years, still needs to sell assets to raise money.
The private equity unit, Dubai International Capital (DIC), is planning to launch a formal sale process for Mauser by January 2014, two of the banking sources said, requesting anonymity as the plan is not public.
A third source said banks working with potential bidders had visited DIC in Dubai over the last couple of weeks to discuss the sale and they expect formal bids to be due in the first quarter of 2014.
The sale is mainly seen attracting large private equity players, with few of them trying to pre-empt a formal process and seeking exclusive negotiations, though DIC is keen to engage in a competitive process for the asset, one of the sources said.
Best value
"Mauser has been a great turnaround story and DIC is keen that they get the best value for it through a competitive process. They have been waiting for a good time to dispose this and looks like it will be next year," the source said.
DIC Chief Executive David Smoot declined to comment. Mauser was not available for comment.
Bank of America Merrill Lynch is assisting DIC in the sale, the three sources said. The U.S. bank also declined to comment.
DIC bought Mauser from JP Morgan Chase Inc's buyout unit in 2007 in a deal which valued the firm at 850 million euros ($1.2 billion).
The company, founded in 1896 in the small town of Black Forest in southern Germany, makes packaging equipment such as cans and drums for transporting medical waste and other hazardous chemicals.
While DIC considered launching a sale in 2012, it decided to delay the project to refinance Mauser.
Mauser said in May it had received support from about 96 percent of its creditors to amend and extend maturities on senior debt totaling 678 million euros. It employs about 4,400 and had consolidated revenue of 1.2 billion in 2012.
Mauser also said in the statement its earnings before interest, tax, depreciation and amortisation (EBIDTA) reached a record high of 134 million euros in 2012.
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