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Abu Dhabi's government offers $ 4.6 billion to indebted Aldar Properties Abu Dhabi government throws a lifeline to Aldar Properties, one of the country's largest property developers
Abu Dhabi's government offers $ 4.6 billion to indebted Aldar Properties The Abu Dhabi government threw a lifeline to indebted Aldar properties of AED16.8 billion ($4.6 billion) committing to buy several assets from Aldar, which is one of the largest property developers in the country and is partly government-owned. The agreement includes the sale of 760 units in various projects at Al-Raha beach for AED3.5 billion, and a payment of AED5 billion for partially completed infrastructure assets at Al-Raha beach. It also includes the sale of existing assets of Aldar's Central Market redevelopment at AED5.7 billion, and additional funding of AED2.6 billion to complete the project. Aldar is expected to receive the proceeds in the coming four years, with an immediate payment of AED4.5 billion in the next two months. A note from the investment bank Beltone Financial said that the transaction will result in reducing Aldar's liability by AED5 billion immediately and providing much needed liquidity to the company. “The transaction will also boost Aldar's performance in the fourth quarter as the company will recognise the sale of Central Market assets in income statement which is worth AED5.7 billion,” according to Beltone. However, Beltone expressed its concern about trends in the real estate sector in Abu Dhabi which may negatively affect Aldar. “We continue to remain cautious about the real estate sector in Abu Dhabi due to an already oversupplied property market, along with an absence of underlying demand. The existing inventory of residential and commercial spaces is expected to increase further with additional hand over from developers like Emaar, Aldar, Sorouh and Nakheel”, underlines Beltone adding that despite the fact that prices in the Emirates are down more than 50 per cent from the peak in mid-2008, Beltone analysts do not expect further declines of at least 10 per cent in Dubai and 15 to 20 per cent in Abu Dhabi. Abu Dhabi has bailed Aldar in January with a $5.2 billion rescue package in exchange for some of its key assets. http://english.ahram.org.eg/News/30508.aspx
