Mumtalakat External Investments Unannounced Losses due to Pandemic
2020-05-29 - 8:54 p
Bahrain Mirror (Exclusive): Bahrain's Mumtalakat has 34% investments abroad, some of which are in sectors that have been extensively affected by the Coronavirus pandemic, however, the company did not disclose the extent of the damage in its investments.
Mumtalakat owns large stakes in McLaren UK, Aleastur Company which is specialized in manufacturing aluminum and a share in Axtmann Aviation Holdings.
British supercar manufacturer McLaren Group, which includes the Formula One team, said it would cut 1,200 jobs under a proposed restructuring program as it deals with the fallout from the COVID-19 pandemic.
The company owns 59% of the shares of the luxury sports car manufacturer.
The company had announced that existing shareholders had invested $369 million in the company, but said it needed a similar amount to help it cope with financial difficulties.
Bahrain has not announced the size of its new investment stake in the company. Mumtalakat Company believes that leaving losing companies are often a backward escape and that companies need to be reshaped.
The company suffered heavy losses as fast-track racing and demand for its cars declined.
In the metals sector, the aluminum industry also recorded significant losses as demand dropped. Aluminium in the London Metal Exchange fell 9% due to market turmoil.
As a result of the impact on manufacturing, demand for aluminum declined by 10% in Europe and China, the main market for Spanish Asturiana de Aleaciones S. A company, 49% of whose shares Bahrain bought in 2016.
In May 2017, Mumtalakat bought a minority share in Axtmann Aviation Holdings, which provides maintenance, repair and operations services, along with FAI Air, which serves air ambulance services.
Although FAI is currently operating at maximum capacity as a result of the global pandemic, its activity and that of Axtmann in maintenance, repair and operations have been damaged by the near-complete disruption of global air traffic.
The International Air Transport Association (IATA) estimates the losses of the aviation sector at about 250 billion.
The safest investment for Mumtalakat is considered purchasing a share in KOS, an Italian medical services company, as CRI, which holds the largest stake, said KOS activities were stable during the first quarter.
In addition to these investments, Mumtalakat company has minority stakes in the Spanish Primo company, which specializes in manufacturing automotive electronics. The company's headquarters are in Shanghai, Vietnam and Morocco.
It is believed that the company's activities related to the manufacture of smart automotive software have been affected by the decline in the automotive industry around the world.
By the end of 2018, Mumtalakat Company had acquired two large properties in California, and fortunately the two office complexes acquired by Mumtalakat were fully leased to Lenovo and The Lash Group which are specialized in the medications sector.
These major investments represent a map of Mumtalakat investments in Europe and the US, and these investments have undoubtedly been affected by the crisis that is ravaging the global economy.
Local Mumtalakat investments are not immune to these effects, as industries such as aluminum and the aviation sector were affected. The Transport Union expects airlines to lose about $200 million, along with The Bahrain Circuit's ongoing losses.
The government's sovereign wealth fund is worth more than $10 billion, the fund is considered the smallest among the Gulf States.