Arqaam Capital Advises on Middle-East Asian Transaction

Wednesday, March 10, 2010

Middle East-based CTI Group to invest in Indonesian cement producer Bosowa Corporation

CTI Group Inc., the Gulf region's largest independent trader of cement and clinker, has agreed to make an investment in a cement production plant in Indonesia owned by Bosowa Corporation.

The arrangement will give Jordan-based CTI its first investment in one of Southeast Asia's fastest-growing markets for infrastructure and construction projects. Arqaam Capital, the largest Middle Eastern investment bank headquartered in the Dubai International Financial Centre, conceived and arranged the transaction on behalf of CTI. Executives of CTI and Bosowa, one of Indonesia's biggest cement producers, are to formalize the contract in a signing ceremony on Thursday, March 11, in the Indonesian capital Jakarta.

CTI owns and operates a fleet of cement carriers and shore terminals and has a global distribution network in more than 25 countries. It recently concluded an agreement with PT Semen Batam ("Semen Batam"), a cement grinding plant owned by Bosowa on the island of Batam, to become the plant's exclusive supplier of clinker, the semi-processed raw material used in the production of cement. Now, by also investing in Semen Batam, CTI is expanding its international reach in an industry vital to nations that are seeking to develop and modernize their economies.

"This investment supports our strategic plan to diversify into cement production, which ultimately provides tremendous support to our core business of cement and clinker trading," said CTI Chief Executive Officer Mazen M. Dajani. "This transaction will help CTI establish a presence in an important region for us, and we look forward to utilizing the synergies of both companies to gain a competitive advantage in Semen Batam's main markets and across the region as a whole.

"Arqaam worked closely with CTI to help the company explore strategic options to expand its overseas markets. "Arqaam's expertise in working the various issues of cross-border transactions, including structuring, governance issues and the regulatory environment were instrumental in the success of this deal," Mr. Dajani said.

The deal highlights Dubai's role as a bridge for investment between mid-cap companies in the Middle East and East Asia - regions that stand out for their economic resilience and growth at a time when most nations are still reeling from the effects of the global financial crisis.

Bosowa, the only privately-owned cement manufacturer in Indonesia, said that the CTI investment will help Semen Batam improve operating efficiency at its plant.

"With the economic recovery, cement consumption is expected to climb in the Southeast Asia region and in Indonesia, in particular. To position ourselves to take advantage of the likely growth in cement consumption, it was imperative that we explored strategic partnerships with credible, global players in the cement space who would support our expansion plans and help us grow further," said Erwin Aksa, President Director of Semen Batam.

Arqaam Capital acted as the exclusive financial advisor to CTI on this transaction. Terms of the transaction were not disclosed. Hill Dickinson acted as the exclusive legal advisors to CTI on this transaction.

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