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| Emaar's merged entity to have $3.65 bn in debt |
| Press Trust of India / Dubai Jun 29, 2009, 12:07 IST |
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Dubai-based Emaar Properties has said the combined entity formed by its merger with three real estate units of Dubai Holdings LLC will have $3.65 billion (13.4 billion dirhams) as external debt commitments.
However, the entity's total asset will be 194 billion dirhams, it said in a statement to the Dubai Financial Market.
The total debt is about seven per cent of the company’s total asset. As of March 2009, Emaar’s own external debt obligation was 10 billion dirhams given that the real estate major had about 68 billion dirhams in book value of assets.
"As for Dubai Holdings, we believe the 126 billion dirhams in assets quoted in the press release consists mostly of land, which could be potentially valued much lower given the current market conditions."
"We currently have no idea as to what Dubai Holdings’ cash position is and what is owed to its contractors and suppliers," it said.
Emaar is seeking to merge with three real estate units of Dubai Holdings — Sama, Tatweer and Dubai Properties. Dubai Holdings is a 100 per cent state controlled entity, while the government of Dubai owns a 32 per cent stake in Emaar.
The parties expect to complete the deal valuation by August 2009. The merger is expected to take about four months and could be finalised in October 2009, pending the approval of shareholders and regulators.
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