Al Habtoor Group, the Dubai-based construction, hotels and cars conglomerate, is putting in place a trust to ensure future family involvement in the company.
A spokesperson for the family business confirmed on 8 January that a family trust arrangement was being introduced to smooth succession from chairman and founder of the group Khalaf Al Habtoor to the second generation.
But speaking to United Arab Emirate newspaper The National, Khalaf, 63, said the succession plan did not mean he would be stepping down as chairman of the company, which he founded as a construction enterprise in 1977, any time soon.
"We are currently forming a trust for members of the family to stay involved in the company and to determine how much can be taken out in dividends. The advisers are drawing up the papers," he said.
A family meeting was being held every month to discuss the future of the company, he added.
The conglomerate, which is best known for construction but also deals in hotels, retail and leisure outlets, office buildings and car showrooms, has grown rapidly in its 40-year history – mirroring and contributing to the architectural and economic rise of its host city, Dubai.
Al Habtoor Group surprised investors last month when it postponed plans for a $1.6 billion (€1.2 billion) initial public offer of company shares.
The group, which was recently valued at more than $6 billion by Grant Thornton, had planned on floating shares on the Nasdaq Dubai in either March or September 2013. It also reportedly considered Saudi Arabia or London as possible options in a dual listing IPO.
Khalaf told The National the IPO may still go ahead come 2014 or 2015, but for now the group’s priority appears to be its trust scheme, which is being advised locally by Dubai law firm Habib Al Mulla and internationally by PwC.
Khalaf already involves two of his sons in the operation of the business. Rashid, a polo enthusiast who has previously played with Prince Charles, is chief executive of the group’s trading enterprises. His brother Ahmed is chief executive of Al Habtoor Motors, a distributor of classic sports cars including Rolls-Royce, Bentley and Aston Martin.