Dubai Financial Market (DFM) announced on Wednesday that Abu Dhabi's Aabar Investments has cut its stake in Arabtec Holding (ARTC.DM) to 18.85% since Sunday. Aabar spent AED827.6mn (USD225.32mn) buying up 21.6% of Arabtec's shares in 2012 and later led an overhaul of the ARTC's board and senior management. Aabar's buying helped Arabtec's shares rebound.

In February, ARTC said it would build 37 towers worth AED22.44bn (USD6.11bn) in the UAE for Aabar, while a month later it agreed a USD40bn housing project in Egypt. It is worthy to note that four of Arabtec's nine board members are associated with Aabar and its parent firm International Petroleum Investment Company, including the Chairman Khadem Abdulla Al Qubaisi, according to Arabian Business.

Mubasher Trade and Research stated that this news comes confirming Aabar selling speculation that had been prevailing during the last three days in the market which we believe is negative for Arabtec's investors who have been hoping that Arabtec will be awarding more Abu Dhabi business because of its strengthened connection with Aabar.

Furthermore, reducing Aabar stake could put the vast MoU agreement for building as many as 37 major buildings across the UAE worth USD6.11bn at risk as this contract represent around 10% of ARTC's total backlog, including all MoUs. Moreover, Aabar announced last February that it would assign all the construction work at its USD20bn real estate portfolio around the world to Arabtec in the future. Thus Aabar selling could put all of these current and potential projects at risk taking in to consideration the prevailing strong competition among the GCC contracting players.