Text size:

  • Small
  • Normal
  • Large

Leighton head regrets Al Habtoor deal

The chairman of Leighton Holdings, Australia¿s biggest builder, believes the company should never have gone into a joint venture with Al Habtoor Group.

The chairman of Leighton Holdings, Australia's biggest builder, believes the company should never have gone into a joint venture with Al Habtoor Group in Dubai, having faced severe challenges in the region.

The Habtoor Leighton Group venture was established in 2007, before the global financial crisis took its toll on the UAE's property sector.

"With hindsight, no, we're not happy with [the joint venture]," Stephen Johns, the chairman of Leighton Holdings told The Australian Financial Review. "We should never have gone into it."

Leighton has written down the value of the joint venture sharply. Habtoor Leighton Group, which is based in the UAE, has struggled to collect payments, which resulted in Leighton suffering an A$153.9 million (Dh556.7m) loss in the Middle East and Africa in the six months to the end of December.

"Are we happy where it is post-GFC [global financial crisis] and what's happening in Dubai? No. Are we going to work our way out of it? Certainly we'll give it a very good shot … but it's not going to happen overnight," Mr Johns told the Australian publication.

Habtoor Leighton and Al Habtoor Group declined to comment on the matter. Habtoor Leighton had also requested Dh500 million (US$136.1m) of additional funding, Leighton said in February. It is also expecting to collect only half of its unpaid legacy receivables over the next two years.

"This is what keeps me awake," Hamish Tyrwhitt, the chief executive of Leighton Holdings, said at the time. "Not all of it is in our control." Still, Habtoor Leighton later that month announced it had won a Dh480m deal to build part of the Dh3 billion Jewel of the Creek marina development on Dubai Creek. Habtoor Leighton is hoping it may also be able to generate more business from infrastructure projects in Abu Dhabi and it is diversifying away from Dubai into other emirates, other countries in the region and North Africa.

It is also increasingly focusing on a broader base of projects including civil, rail, water, oil and gas, and services, rather than simply building and property development.

In February, Leighton also revealed it was facing a possible breach of its ethics code surrounding payments connected to work at a project related to oil exports in Iraq.

The possible ethics breach was related to Leighton's subsidiary company, Leighton Offshore, "in connection with work to expand offshore loading facilities for Iraq's crude oil exports", the company said.


twitter: Follow and share our breaking business news. Follow us

iPad users can follow our twitterfeed via Flipboard - just search for Ind_Insights on the app.

Back to the top

More articles

Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 Three generations of the Hakimi family tend to their stall Crawford Market in Mumbai. Subhash Sharma for The National

In pictures: Shopper’s delight at Crawford Market in Mumbai

Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.


To add your event to The National listings, click here

Get the most from The National