Arab Today, arab today 3 uae developers statebacked merger
Last Updated : GMT 16:18:17
Arab Today, arab today
Arab Today, arab today

3 UAE developers state-backed merger

Arab Today, arab today

Arab Today, arab today 3 UAE developers state-backed merger

Dubai - Arabstoday

Abu Dhabi\'s struggling developer Aldar Properties may merge with local rival Sorouh Real Estate in a state-backed tie-up that could create a company worth some $15 billion in assets. A decision on the merger of the top two developers in the emirate will be made within three months after a joint committee assesses the matter, the companies said in a joint statement on the Abu Dhabi bourse, adding the talks had \"the blessing of the Abu Dhabi government\". The plan 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. Aldar, in which Abu Dhabi state fund Mubadala has a 49 percent stake, has relied heavily on the government over the past 18 months. The builder of the Yas Marina Formula One motor racing circuit has assets worth more than 40 billion dirhams ($10.9 billion) and finally swung to profit in 2011, lifted by two government bailouts totalling nearly $10 billion. Smaller 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. \"We\'ll do it if it\'s good for both companies,\" Sorouh Managing Director Abu Bakr Seddiqi Al Khoury said at the developer\'s annual general meeting in Abu Dhabi. \"It won\'t change or shift our strategy from what we are doing today.\" Aldar\'s Deputy Chief Executive Mohammed Khalifa Al Mubarak also said there is no concrete decision yet and the way forward would only be clear after assessment by the committee. Shares in both companies ended up 8 percent on the Abu Dhabi exchange on Sunday. The statement came after markets closed. \"I think this is not only for Aldar but also for the real estate (market) in Abu Dhabi,\" said Ali El Adou, portfolio manager at The National Investor. \"The current business set-up for Sorouh and Aldar is not viable in the long run. So the government is trying to create an entity which will have a stronger (footing).\" Sources told Reuters in January that Abu Dhabi had held talks to offload all or part of the Aldar stake in an attempt to stop its falling asset value from dragging down Mubadala. \"I think it is too early to identify the effect on Mubadala, but this might be an opportunity to exit Aldar or dilute their ownership in it,\" said Adou. CONSOLIDATION Abu Dhabi\'s property market fared better than neighbouring emirate Dubai, which saw a collapse and the restructuring of its flagship property firm Nakheel, which was a part of Dubai World. However, Abu Dhabi is now facing challenges as a huge supply of high-end homes are expected to enter the market. Property prices in the emirate are expected to fall another 11 percent from here, a Reuters poll showed. Abu Dhabi, which rescued Dubai with a $10 billion bailout, has spent an equal amount on Aldar, which landed in debt from a building spree. The oil-rich state, which accounts for more than half of the United Arab Emirates\' economy, government-backed real estate, commercial and tourism projects, many conceived during the boom years of 2003-2008, are under review and in some cases being delayed or put on hold. \"The initial reaction has been positive from the shareholders,\" Sorouh\'s Al Khoury said. However, both companies have weak balance sheets and this may not be resolved by the merger, analysts said. \"Merging the two companies won\'t turn around the dynamics of the Abu Dhabi property market,\" said Robert McKinnon, ASAS Capital chief investment officer. \"Both companies have fairly weak balance sheets and so merging them isn\'t going to solve that problem.\"

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today 3 uae developers statebacked merger Arab Today, arab today 3 uae developers statebacked merger

 



Arab Today, arab today

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today 3 uae developers statebacked merger Arab Today, arab today 3 uae developers statebacked merger

 



Arab Today, arab today France defies terrorism through tourism

GMT 15:18 2017 Saturday ,20 May

France defies terrorism through tourism
Arab Today, arab today Zainab Fadel Oglu designs “Shakerin” mosque

GMT 12:13 2017 Thursday ,11 May

Zainab Fadel Oglu designs “Shakerin” mosque
Arab Today, arab today Seeks to move past rift with Israel

GMT 08:00 2017 Monday ,08 May

Seeks to move past rift with Israel
View News in Arabic - Business: اقتصاد عربي
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday