15th Apr 2008 07:01
Interior Services Group PLC15 April 2008 Interior Services Group PLC ("ISG" or "the Group") ISG forms Joint Venture in Dubai to exploit fast growing Middle Eastern Markets ISG is pleased to announce that in accordance with its stated strategy it hasentered into Heads of Agreement with the Al Habtoor Leighton Group (HLG), one ofthe largest construction groups in the Gulf region, to establish a 50:50 jointventure based in Dubai to focus on the UAE and the Gulf region. The partiesplan to merge their respective interior fit-out businesses in the Middle Eastinto a new company, Al Habtoor ISG (HISG), and in support of anticipated growthto jointly invest up to AED80m (approximately £11m) in the venture over the nextthree years. The joint venture will focus on providing: • Integrated fit-out solutions in combination with HLG's base build capabilities; • Project management and associated consultancy services; and • Interior fit-out contractingto the retail, hotel, residential and corporate sectors and to ISG's multinational clients active in the region. HISG will acquire HLG's existing fit-out business, Al Habtoor Interiors forapproximately AED3.5m, and ISG's recently-established project managementbusiness in Dubai for approximately AED1.9m, both at net asset value. The parties expect HISG to commence operations from 1 July 2008 once duediligence and documentation has been completed and all necessary approvalsobtained. ISG will have day to day management control of HISG through ISG Asiaand will also provide marketing, best practice and technical assistance. HLGwill provide HISG with local knowledge and access and has committed to ensureHISG has access to fit-out opportunities in the Gulf for construction projectswith which it is involved. Demand for construction services in the Middle East is expected to remain strongparticularly in the UAE as the country diversifies into new areas such astourism and financial services. The UAE construction industry is forecast togrow from $15bn in 2008 to $22bn over the next five years. In particular 7%year on year growth in 2008 is forecast as the sector benefits from a number oflarge scale projects including new hotels, commercial buildings, residentialdevelopments and the expansion of existing airports. The Board of HISG will comprise three representatives from each shareholder.HLG's proposed representatives are Mr David Savage, Managing Director of HLG; MrPaul Watson, General Manager, HLG Associated Businesses and Mr Nigel Poole,Deputy Managing Director of HLG. ISG's proposed representatives are Mr DavidKing, Chairman of ISG Asia; Mr Gary Allin, Managing Director ISG Asia; togetherwith a new Managing Director for HISG to be appointed. David Lawther, Chief Executive of ISG, said: "We are extremely excited by this partnership - this is a unique opportunity forour business in the Middle East to take a quantum leap forward and to continueto expand ISG in targeted marketplaces overseas. We are partnering with one ofthe Gulf's leading construction firms with unrivalled access and opportunitiesin a region where demand for our fit out capabilities is forecasted to growstrongly." David Savage, Managing Director of HLG, said: "This is an important development for HLG that represents another step in ourplans to become a full-service, turnkey contractor. "ISG is a leader in the interior fit-out industry and we're delighted that we'vebeen able to reach agreement with them to establish this exciting new company. "HLG's existing workload and long list of prospective projects will ensure thatHISG has immediate access to a large range of opportunities in this region." 15 April 2008 NOTES TO EDITORS Information on Al Habtoor Leighton Group ("HLG") and Al Habtoor Interiors HLG was established in September 2007 following the merger of Al HabtoorEngineering, constructors of the Burj al Arab hotel, and the Gulf operations ofLeighton International. The new entity immediately became the UAE's largestconstruction group, with revenue of over AED6bn in 2007. HLG currently hasaround AED15bn of work in hand spread across the UAE and Qatar, and isanticipating further strong growth over the next three years. Leighton International is part of the Leighton Group, Australia's largestproject development and contracting group with annual revenues exceedingUS$10bn. Al Habtoor Interiors was established in the early 1970s as a fit-out and joineryoperation to support Al Habtoor Engineering's construction activities. In 2007AHI had turnover of AED33m and recent projects include the retail mall atMadinat Jumeirah Souk, 11 residential and commercial towers at Business Bay andthe Habtoor Grand Hotel, all in Dubai, and the Abu Dhabi National ExhibitionCentre. For further information on: Leighton International, please visit: www.leightonint.comLeighton Group, please visit: www.leighton.com.auAl Habtoor Engineering, please visit: www.habtoorengg.ae Information on Interior Services Group plc and ISG Dubai ("ISGD") ISG PLC, the £1bn plus turnover UK listed company, delivers award-winning newbuild, refurbishment and fit-out services internationally with operations in theUK, Europe and Asia. The Company is headquartered in the UK. As one of the mostestablished and respected companies in the fit-out construction industry, ISGhas a wealth of experience working across a variety of sectors, locations andproject values up to £100 million. In the six months ended 31 December 2007,ISG had a turnover of £521m and the Group has recently been mandated on industryleading projects such as the refurbishment of the Royal Festival Hall and thenew Eurostar Terminal at St Pancras station. ISG established an office in Dubai offering project management and otherfee-based consultancy services to clients such as Standard Chartered Bank,ExxonMobil, Emaar and ABN AMRO in May 2006. ISGD has recently been licensed toprovide fit-out construction services in the UAE. For further information on: Interior Services Group please visit www.isgplc.com Enquiries: Interior Services Group PLCDavid Lawther, Chief Executive 020 7392 5307Greg Aldridge, Corporate Development Director 020 7392 5393 College HillJustine Warren 020 7457 2020 Numis SecuritiesSimon Blank 020 7260 1000 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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