Abu Dhabi’s Mubadala Development Co and General Electric Co on Sunday pushed ahead with their partnership signed almost a year ago, appointing executives for an $8 billion commercial finance venture and corporate learning centre, the first details to emerge since it was announced.
The companies said back in July 2008 they would collaborate in various areas - including clean energy, technology, aviation, oil and gas and corporate learning - and Mubadala said it planned to become one of GE's top ten shareholders.
However, since the partnership was announced the global financial crisis took hold and very little has been said about the deal by either company. GE shares have lost more than half their value since the deal was announced, closing Friday at $13.48.
Mubadala CEO Khaldoon al-Mubarak said on Sunday the companies were pressing ahead with the partnership and the executive teams for the finance venture and learning centre were in place and operations should start in the summer.
Ron Herman, a 25-year GE veteran, will head up the Abu Dhabi-headquartered commercial finance venture, to which both companies have committed $4 billion in equity each over the next three years, while Jeff Barnes, who has also spent 25 years with GE, will oversee the corporate learning centre.
“The plan is what it was 12 months ago and we are moving swiftly forwards,” Mubarak was quoted as saying by UAE daily the National.
The companies said last year the fifty-fifty finance venture would have assets in excess of $40 billion within the next 14 to 18 months, initially investing in the Middle East and Africa.
The companies also said the learning centre, which will be based in Masdar City, would be managed by GE and based on GE's 'Crotonville' executive education programme. They had said it would launch by the first quarter of 2009.
Mubadala on Sunday reconfirmed its commitment to become one of GE's top ten shareholders despite its shares poor performance that the investment company cited as partly to blame for the $3.23 billion loss it recorded in 2008.
Mubadala has bought 65.8 million shares in GE, or about 0.6 percent, as of the end of March, according to U.S. magazine Business Week.
Also under the partnership, the companies said they would establish a clean energy technology centre in Masdar City, the new carbon neutral, zero-waste city being build in Abu Dhabi, and GE would commit up to $50 million to Masdar's clean technology fund.
Mubadala would also invest up to $200 million in GE Industrial Investment Partners, an initiative that provides capital to companies in healthcare, energy, and transportation, they said.
GE and Mubadala's aviation maintenance, repair and overhaul (MRO) arm, Abu Dhabi Aircraft Technologies (ADAT), also agreed to expand their MRO capabilities.