Wednesday 28 September 2022

Aras arranges $816m funds for development projects

DUBAI, October 14, 2018

Dubai-based Aras Group said it has helped arrange Dh3 billion ($816.5 million) worth of funds for nearly 100 projects across a diverse portfolio ranging from real estate, renewable energy, hospitality, start-ups, refineries and ships in the UAE.

With tighter lending regime, alternative investment and private financing are flourishing in the UAE due to higher demand for capital, said experts.

The company, which is involved in corporate finance, alternative investment, commercial lending as well as consulting business, has also created more than 100 special-purpose vehicles (SPVs) in the UAE and Europe to provide financial lifeline to hundreds of companies and projects and helped them come to fruition.

"Many of these projects are in advanced stage of production and implementation. We have not exited any of them due to their strong growth prospects. We are happy with the way we have been able to support the private sector with our resources and co-financers," said a company spokesperson.

Aras Group, which employs 110 highly-skilled professionals, receives a good number of project finance applications from a number of project-owners every day that are been vetted by a group of specialised financing team who carry out a thorough study on the project’s commercial viability and success potentials as well as long-term sustainability.

The total value of small and medium enterprises (SMEs) in the Gulf region is tipped to more than double over the next five years, to $920 billion, according to reports.

Waha Capital, a major player in the region, said there may be fertile ground for mid-market companies to thrive in. But what is often missing from the picture is the right capital solution to propel the company to its next stage, and become the leading enterprises of tomorrow.

With banks remaining asset focused and becoming more risk-averse, mid-market firms can struggle to access traditional forms of funding. This creates a clear opportunity for private debt to fill the gap, stated the company.

Aras Group said it is working to support the private sector with financial solutions tailor-made for their success.

Before any project is considered for financing they will be vetted, stated the Dubai-based group which uses proprietary research tools and media intelligence software to screen all clients to be certain of their intentions.

The company officials also conduct background checks and financial history verification with various institutions that specialise in providing such services. If they make it through the preliminary screening then Aras Group officials discuss financing options in face-to-face meetings.

The Dubai group revealed that it gets numerous business plans on a daily basis from registered mediators and only about 5 per cent of them are considered for evaluation.

The client's success in being selected for financing will hinge on a realistic target, sensible valuation, effective pitch and well-executed communication/business plan to stimulate as much interest from our financing board, stated Aras Group, which specialises in silent partnership, subordinated loans and leasing.

If the clients bring in equity then they are entitled to a lower interest rate, otherwise the vetting process is a lot more strict and the interest rate is higher but then again the probability of receiving financing approval reduces, said the company.

The client then receives payment in tranches as opposed to a one-shot payment. This is to feed their business in regular intervals, it added.-TradeArabia News Service

Tags: funds | development projects |

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