Arab Today, arab today abu dhabi rescues aldar with dh168b
Last Updated : GMT 21:20:28
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Abu Dhabi rescues Aldar with Dh16.8b

Arab Today, arab today

Arab Today, arab today Abu Dhabi rescues Aldar with Dh16.8b

Abu Dhabi - Arabstoday

The Abu Dhabi government yesterday came to the rescue of the emirate\'s biggest property developer, Aldar Properties PJSC, with a Dh16.8 billion lifeline in exchange for strategic assets. This is the second such move in a year. In January, the developer had agreed to sell real estate assets, including the Ferrari theme park, and convertible bonds to the government for Dh19.2 billion to reduce its debt. Under the agreement announced yesterday, the Abu Dhabi government has purchased 760 apartments in Al Raha Beach for Dh3.5 billion. Aldar retains ownership of the remaining inventory of units at Al Raha Beach, which are available for purchase or rent-to-own. Infrastructure work The Abu Dhabi government has also agreed to reimburse Aldar with Dh5 billion once it finishes work on certain existing and to-be-completed infrastructure assets at Al Raha Beach. This amount will be settled by the immediate retirement of Dh5 billion towards the currently outstanding infrastructure loan from the government of Abu Dhabi. These infrastructure assets will be transferred to the relevant government authorities as and when directed by the government of Abu Dhabi. \"Today\'s transactions will immediately reduce Aldar\'s indebtedness by Dh5 billion and continue the deleveraging of its balance sheet,\" the company said in a statement. Aldar also said that Central Market and its associated infrastructure have also been sold to the government of Abu Dhabi for Dh5.7 billion. Aldar will be responsible for the construction management and supervision of the completion of the project as well as the immediate day-to-day operations, management of the facilities and tenant relations on behalf of the government of Abu Dhabi. The estimated completion costs of Dh2.6 billion will be funded by the government of Abu Dhabi, the developer said. \"The proceeds from the sale transactions will be received over the next four years, pursuant to an agreed payment schedule which includes the receipt of Dh4.5 billion in the next two months,\" said Aldar. \"Following the financial framework announcement in January of this year, the Board undertook a comprehensive review of Aldar\'s business model, finances and operations. As part of this process, we continued negotiations with the government of Abu Dhabi, which led to the transactions we are announcing today. They are designed to create the solid financial foundation needed to drive returns to shareholders,\" Aldar\'s Chairman Ali Eid Al Muhairi said in a statement. With a substantial land bank across Abu Dhabi, he said, Aldar is well placed to capitalise on future development opportunities, based on demonstrable market demand. \"Aldar will also benefit from sustainable recurring revenues from our office, retail, hotel and education assets, as well as development management fees from large-scale third party projects,\" Al Muhairi added. Mousa Haddad, Head Trader with National Bank of Abu Dhabi Asset Management, told Gulf News the announcement by Aldar is \"very positive for both the bondholders and shareholders\" and it demonstrates the capital strength of the Abu Dhabi government. \"This will boost investor sentiment. A stock like Aldar, which is down 65 per cent in the year-to-date, will have only one direction to go, that is up,\" Haddad added. Aldar\'s shares rose 3.7 per cent yesterday on the Abu Dhabi Securities Exchange, closing at Dh0.85. The stock is recovering from its all-time low of Dh0.79 earlier this month. Earlier in December, Aldar denied reports that it was planning to delist from Abu Dhabi\'s stock exchange. On October 31, Aldar said changing market conditions had provoked the layoff of 24 per cent of its workforce. Aldar reported its biggest quarterly loss last year after the global credit crisis drove down Abu Dhabi property prices by more than a third from their 2008 peak. The company reported a profit of Dh144 million for the quarter ended September 30, compared with a net loss of Dh731.2 million in the same period a year ago. Aldar\'s portfolio of projects in Abu Dhabi is valued at more than $75 billion (Dh275.40 billion), with the entire inventory slated to be completed and delivered within this decade.

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