Waha Capital invests Dh184m in Latin American online travel company

The move is part of the company's mandate to invest $150m in US-listed companies

Non-digital assets such as real estate and even companies can be tokenised. Mona Al Marzooqi / The National

Waha Capital, an investment company that counts Mubadala Investment Company as one of its shareholders, is investing Dh184 million in New York-listed online travel company Despegar.com.

Waha Capital will invest in Despegar.com's Series B preferred shares, which are convertible into ordinary shares, through a private placement deal.

“As was evident in our recently announced first-half financial results, we are pursuing a vigorous turnaround strategy to position Waha Capital for renewed growth in the coming years,” said chief executive Amr Al Menhali, who took charge of the company in September 2019.

“We are confident that investments such as the one we are making in Despegar.com will put us on a firm footing to deliver significantly higher future returns for our shareholders as we successfully navigate past the impact of Covid-19 and look to the future.”

Waha Capital intends to invest $150m (Dh550.8m) in a number of US-listed companies in finance, health care, telecoms, FinTech and e-commerce, Mr Al Menhali said in May.

It has two business divisions – a private investment arm that invests directly in high-potential companies, and an asset management division that invests in proprietary and third-party funds in globally listed equities and credit.

The Despegar.com investment supports Waha Capital’s growth strategy for its private investment portfolio, the company said.

It also expands the portfolio to include a new sector and region.

Waha Capital will also appoint a representative to Despegar.com’s board of directors.

Despegar.com offers access to more than 270 airlines, 690,000 hotels, 1,260 car rental agencies and about 200 destination services suppliers across Latin America.

“Latin American online travel bookings are expected to accelerate in the coming years, once the effects of the pandemic have subsided,” Waha Capital said.

“Factors driving the growth in online travel bookings include the increase of internet penetration, further adoption of smartphones, tablets and other mobile devices and a growing middle class with greater access to banking services and credit products.”

Waha Capital’s investment portfolio includes Dubai-based FinTech Channel VAS, Dunia Finance, National Energy Services Reunited and Petronash Holdings.

It sold its stake in New York aircraft leasing company AerCap last year in a deal that generated Dh933m in net cash.

"Whenever there is a crisis, there is a great opportunity," Mr Al Menhali told The National in May.

“In the US market, we have seen some good prices in certain companies which are listed,” he said at the time.

Waha Capital, which was established in 1997, also plans to launch a Sharia-compliant fund by the end of this year, with seed funding that is between $30m and $50m to invest in equities and sukuk.

The investment company swung to a profit in the second quarter of this year on the back of a higher operating income. Net profit attributable to owners of the company for the period ending June 30 stood at Dh267.2m, compared with a loss of Dh124.3m during the same period last year.

Waha Capital carried out a review of its business in the second half of last year.

Total assets at the end of last year stood at Dh9.3 billion, down from Dh11.6bn in the previous year.