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Emaar Plans to Keep Safe Distance From Troubled Amlak

Emaar Properties PJSC, the sprawling Dubai real estate developer, had a near-death experience this past week when its chairman made remarks hinting that it might increase its stake in its troubled Amlak Finance unit, a move that would saddle Emaar’s balance sheet with huge debt.


Emaar quickly denied any move was afoot to boost its holding in Amlak, telling the Dubai Finance Market that it had considered converting part of the debt to equity but was now weighing “other better and viable options.”


Emaar, whose projects include the El-Burj tower, the world’s tallest skyscraper, isn’t yet out of the hole. The debt at Amlak, in which it has a 48% interest, remains unresolved, and its MFG joint venture in India continues to weigh on Emaar’s cashflow. Meanwhile, Emaar itself faces a potentially rocky transition from reliance on Dubai real estate to a more balanced international portfolio.


While its El-Barj Tower has come to symbolize the excesses of Dubai’s once red-hot property market, Emaar has succeeding in remaining profitable even as home and office valuations collapsed and Dubai’s biggest companies were forced to seek relief from debts. Emaar, the United Arab Emirates’ biggest property developer, posted a gross profit of 3.4 billion dirhams in the first nine months of this year, a 25% increase from the same period in 2009.

http://www.themedialine.org/news/news_detail.asp?NewsID=30863 [2]