18 May 2010
London-based direct investment group MerchantBridge is embarking on a campaign to attract up to $40 million of UK investment in a major rehabilitation project in Iraq.
MerchantBridge has been awarded an existing cement plant under a 15-year lease in the Kerbala Governate, 80 miles southwest of the capital Baghdad, by the Iraqi Ministry of Industry and Minerals. The plant has been damaged by years of underinvestment and lack of spare parts and is currently operating at 300,000 tons per year, well below capacity. The plant will go through a complete rehabilitation program with an investment of US$200 million to achieve a production in excess of 1.8 million tons per year. Lafarge, the world leader in cement, is joint partner and will be operating the plant.
The project has already attracted investment interest from other foreign direct investors, including the International Finance Corporation, the private arm of the World Bank, and France’s Proparco, 67% owned by the French Development Agency. MerchantBridge is now embarking on a targeted campaign in the UK to highlight the opportunities Iraq offers and actively encourage investment in what it considers the first ‘live’ opportunity for UK investors to take advantage of in Iraq.
Over the next two weeks, MerchantBridge is approaching hedge funds, private equity houses and other selected institutional investors in the United Kingdom.
MerchantBridge has been awarded an existing cement plant under a 15-year lease in the Kerbala Governate, 80 miles southwest of the capital Baghdad, by the Iraqi Ministry of Industry and Minerals. The plant has been damaged by years of underinvestment and lack of spare parts and is currently operating at 300,000 tons per year, well below capacity. The plant will go through a complete rehabilitation program with an investment of US$200 million to achieve a production in excess of 1.8 million tons per year. Lafarge, the world leader in cement, is joint partner and will be operating the plant.
The project has already attracted investment interest from other foreign direct investors, including the International Finance Corporation, the private arm of the World Bank, and France’s Proparco, 67% owned by the French Development Agency. MerchantBridge is now embarking on a targeted campaign in the UK to highlight the opportunities Iraq offers and actively encourage investment in what it considers the first ‘live’ opportunity for UK investors to take advantage of in Iraq.
Mr Basil Al-Rahim, MerchantBridge’s Chief Executive Officer, stated: “Our strategy is to engage UK and European investors and partner them on entering the Iraq market. The potential there is huge and as with the Kerbala project, we are at the forefront of creating unique investment opportunities, from their inception, to identifying the number one partner in the field to work with, right through to the end. This is why we are also launching our Mesopotamia Fund targeted at the UK and European market, which will invest in selected companies listed on the Iraq Stock Exchange. While the stock exchange is currently illiquid with a total market capitalisation of around US$3.3 billion, there is an incredible potential for early entrants in the market.”
Over the next two weeks, MerchantBridge is approaching hedge funds, private equity houses and other selected institutional investors in the United Kingdom.
“Our approach is highly targeted”, says le Blan. “We appreciate that Iraqi investment risk is difficult to assess for UK institutions, as there is a lack of reliable data and information. However, over the last six months, we have witnessed a greater awareness and appetite for investments in Iraq but have been told repetitively that tangible investment opportunities have remained inexistent. By offering a direct investment in a cement plant as well as the possibility to take exposure to Iraq via our new Iraq Listed Equity Mesopotamia Fund, we are providing clear investment paths into Iraq for UK and European investors.”
