Monday, 29 June 2009

Share slump follows Emaar merger announcement

From 29 June 09
Dubai's Emaar Properties said on Sunday the entity resulting from a proposed merger with three units of Dubai Holding, owned by the emirate's ruler, will have combined assets worth AED194bn ($52.85bn).
Emaar Properties' shares plunged after announcing merger plans, dragging Dubai's index to its biggest one-day fall for seven months.
Emaar, which is building the world's tallest tower in Dubai, and Dubai Holding announced a plan on Friday to merge the developer with real estate units Dubai Properties, Sama Dubai, and leisure developer Tatweer – all prominent players in a sector badly hit by the global financial crisis.
The new entity would have AED13.4bn of debt obligations, around 7 percent of total assets, Emaar chairman Mohammed Alabbar said in a statement on the bourse website.
The property developer also said its own total book value of assets at the end of March was AED68bn, with AED10bn of debt obligations.
"The proposed consolidation will create a robust and strategic asset base while joining the strengths of the management teams and employees of these companies," said Alabbar.
Dubai Properties, Sama Dubai and Tatweer had combined total assets of AED126bn at the end of last year, with around AED3.4bn worth of external debt obligations, the company said.
Property prices in Dubai have slumped since last year when the global economic crisis and a drop in oil prices ended an economic boom in the Gulf region.
Emaar, the largest listed Arab developer, which is 31.2 percent owned by the ruler, said the consolidation process will take around four months.
Tatweer said earlier this month the bankruptcy of its partner Six Flags, one of the largest theme park operators, would not delay a multi-billion dirham park project in Dubai.
Tatweer is building at least seven theme parks in the Gulf Arab emirate.
Dubai Holding said in February it would merge back-office operations at Dubai Properties, Sama Dubai and Mizin to cut costs.

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