December 8, 2016 / 7:39 AM / 10 months ago

Bilfinger CEO says will take time for Iran to regain investors' trust

The logo of German industrial services provider Bilfinger is pictured at its headquarters in Mannheim, Germany, May 11, 2016. REUTERS/Ralph Orlowski

FRANKFURT (Reuters) - Financing is the main hurdle facing companies looking at doing business in Iran, Bilfinger (GBFG.DE) Chief Executive Thomas Blades said in German newspaper Handelsblatt and he also said it would take time for the country to regain investors’ trust.

“The biggest challenge that I currently see in Iran is the financing of projects,” Blades said in an interview published on Thursday.

Many Western banks have been reluctant to provide financing for big projects in Iran, fearing a regulatory backlash if there is a new setback in relations with the country.

Blades said Bilfinger’s response to Iran’s “bring your own money” attitude was to focus on trying to win projects that run for only a few months rather than several years.

The engineering services group won a contract worth several million euros in July to supply a process control system for the upgrade of one of Iran’s largest refineries.

“It’s not just the oil and gas industry that make the country attractive for us. There is also high demand for environmental technology,” he said, pointing to the high air pollution levels in Tehran.

Other Middle Eastern markets that are of interest to Bilfinger are Egypt, Saudi Arabia and the Gulf countries, he said, saying that shortfalls in the efficiency of chemicals plants there offered opportunities.

He said he was also “cautiously optimistic” following the election of Donald Trump as U.S. President last month.

“With Trump, a businessman is coming to the helm who wants to support the economy and continue projects. And all that in sectors in which we are active,” he said.

Asked about acquisitions, he said Bilfinger would make purchases eventually, but that it was currently still too soon. Bilfinger is in the middle of a restructuring to cut costs.

“First we have to stabilize the company and create efficient structures. When earnings and cash flow are at the right level, we will build it up and expand, organically and through targeted acquisitions,” he said.

Reporting by Maria Sheahan. Editing by Jane Merriman

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