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The state-owned , Emirates National Oil Company (ENOC) has announced that it will not be selling any of its stake in the oil exploration company Dragon Oil despite the current financial crisis in Dubai.
In a statement ENOC said that it would retain all of its 51.5% stake in Dragon until the end of 2011 at the earliest whether or not its planned US$1.8 billion acquisition of the company is successful.
The UK newspaper The Financial Times reported that ENOC’s planned acquisition still has the financing in place and that it would not be affected by recent events in the emirate.
“ENOC is insulated from the problems elsewhere in Dubai,” a person close to the transaction is quoted by The FT as saying.
“This is the company reiterating for the first time after the events last week that Dragon Oil is an absolutely core asset.”
ENOC’s planned purchase of Dragon Oil has been met with fierce resistance by shareholders who believe that the offer price of GBP4.55 undervalues the company.
A major shareholder, the UK-based financial institution Baillie Gifford, opposes the deal and recently upped its stake in Dragon Oil to 4.4%.
The FT reported that shareholders need a 12% no vote to stop the proposed deal if a 100% turnout is achieved. However, if the turnout is around 70%, just over 8% will be enough to block ENOC.
