Sunday June 28, 08:08 PM
Emaar downplays debt burden of Dubai property merger
DUBAI (AFP) - Dubai real estate giant Emaar Properties said on Sunday that the debt of the entity to be created through its merger with three other property developers will not exceed 3.64 billion dollars, seven percent of combined assets.
The listed company, which is mostly controlled by the government, and the government-owned Dubai Holding had said on Friday that they were in advanced talks to merge Emaar and three Dubai Holding property units -- Dubai Properties, Sama Dubai and Tatweer.
"The combined entity will have an indebtness of AED 13.4 billion (3.64 billion dollars) with total assets of AED 194 billion (58.9 billion dollars)," Emaar said in a statement to the stock market to assure panicking shareholders.
Emaar's share shed 9.97 percent of its value on Sunday.
The company said the three Dubai Holding units had by the end of 2008 a combined total assets book value of 126 billion dirhams (34.3 billion dollars), while their total external debt amounted to about 3.4 billion dirhams (926 million dollars).
Meanwhile, the assets of Emaar, which is building the world's tallest tower, Burj Dubai, had by March 31 a book value of 68 billion dirhams (18.5 billion dollars) and a total debt of 10 billion dirhams (2.7 billion dollars), it said.
The assets of the Dubai Holding units include an "attractive land bank," Emaar said, adding that it will contribute positively to the consolidation.
Tatweer is in charge of developing Dubailand, which was expected to be the Middle East's equivalent of Orlando, but most of its projects hang in the balance as the emirate's once-booming property sector struggles to stand on its feet after being hit hard by the global financial crisis.
Emaar said it expected the consolidation process to be completed in about four months, boasting that the new entity will be "one of the largest real estate developers worldwide."
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