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Abu Dhabi’s Aldar sees profit in 2011, shares rise

Spokesman confirms guidance given by CFO on Monday.

January 18, 2011 4:30 by



Aldar Properties expects to post a profit in 2011, the indebted developer said on Tuesday, as it seeks to write off a drop in asset values and repay debt following a $5.2 billion aid package from Abu Dhabi.

A company spokesman confirmed guidance given to investors by the company’s chief financial officer on Monday.

“Aldar confirms the guidance given by Shafqat Malik, Aldar CFO, on an investor briefing call that took place yesterday evening,” a spokesman for the company said in an emailed statement.

The CFO mentioned in the call that the company, part-owned by Abu Dhabi government, will post profits this year and going forward.

Aldar shares closed 3.5 percent higher in Abu Dhabi on Tuesday.

Abu Dhabi stepped in with $5.2 billion of support for the struggling developer on Thursday, including buying some of its key assets and subscribing to a bond sale.

On Tuesday, Moody’s placed Aldar’s ratings on review with direction uncertain. S&P said it was revising CreditWatch implications on its ratings to developing from negative, based on announcements of asset sales and capital raising.

Malik told investors that the company has been in discussion with credit rating agencies following the restructuring announcement.

Aldar would get paid in cash in 2011 for most of its assets sold to the government and for the convertible bond sale, which would allow Aldar to repay about 13 billion dirhams ($3.54 billion) in debt over the next three years, he said at the call.

“This is a marginally positive sign for the shares, as this was not disclosed in the official announcement,” said Akram Annous, MENA strategist for institutional sales at Al Mal Capital, who joined the conference call.

Aldar said last week that it would sell assets worth $1.49 billion to the government to meet looming debt obligations. It will also raise $2.97 billion through sales and reimbursements for some of its key assets including its glitzy Ferrari World theme park .

It also booked an impairment of 10.5 billion dirhams ($2.86 billion) largely related to the valuation of property. “They (Aldar) have been saying that asset value is not bad and they are fine, but it all changed suddenly,” said an investor who attended the call but did not want to be named.

“The impression they wanted to convey is that they’ve been hit and they are putting it all in the books.”

Malik said delisting of the company was never discussed and Aldar would remain a public listed company.

A government rescue for Aldar has been seen as a likely option by analysts since the property crash left the market with few private players willing to buy the developer’s assets.

(Editing by Dinesh Nair and David Cowell)




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