And they account for 42 per cent of the workforce and 40 per cent of the Emirate’s GDPNovember 24, 2015 4:32
Aldar Says No Financial Help Needed From Abu Dhabi
Abu Dhabi's Aldar Properties , currently in merger talks with rival Sorouh Real Estate, says it is committed to repay its huge pile of debt and sees further consolidation in the emirate's battered property market.
April 23, 2012 9:07 by kippreport
Abu Dhabi’s Aldar Properties , currently in merger talks with rival Sorouh Real Estate, says it is committed to repay its huge pile of debt and sees further consolidation in the emirate’s battered property market.
The company, which has been rescued twice by Abu Dhabi with funds amounting to nearly $10 billion, will not need any more funds from the government, chief executive Mohammed al Mubarak, said on the sidelines of a property conference on Sunday.
“We are committed to all our debts and they will be paid, we are in a healthy financial position,” Mubarak told reporters.
The potential merger of struggling Aldar and Sorouh unveiled last month could take some pressure off state investment fund Mubadala, which owns about 35 percent of Aldar.
Aldar’s $1.25 billion 10.75 percent bond, maturing 2014 was bid at 109.5 on Saturday, according to Thomson Reuters data, to yield 5.847 percent, about 23 basis points tighter since beginning of the month.
The builder of the Yas Marina Formula One circuit, which was forced to sell key projects to the government including the Ferrari World Theme Park, is generating income from the lease of “many residential and retail projects”, Al Mubarak said.
Aldar secured a 4-billion-dirham ($1.1 billion) credit facility from National Bank of Abu Dhabi last week, a deal expected to help the developer manage its liquidity needs.
State-owned investment fund Mubadala, which holds a near-majority position in Aldar said last month that it transferred a 14 percent stake in the developer to secure a loan facility from Abu Dhabi Commercial Bank.
Abu Dhabi is poised for more consolidation as it streamlines state-linked firms in the face of tougher property and economic conditions. “Abu Dhabi market is growing – on that front it has to be managed, this could be either through consolidation or other means,” Mubarak said.
The state-backed tie-up between Aldar and Sorouh to create a company worth some $15 billion in assets comes as prices slide in the emirate’s real estate sector, which has not recovered from the downturn seen after the 2008 global financial crisis. Property firms have been forced to cancel projects and restructure their huge pile of debt.
Sorouh, which has assets of 14.1 billion dirhams, has fared better than its bigger rival, supported by a focus on existing project completion and delivery. While Dubai’s real estate crisis came as a shock to global markets, the Abu Dhabi reckoning has been a more gradual and incremental process as real-estate values continue to slide.