Abu Dhabi, UAESunday 21 July 2019

Emaar Properties sells back its DAE stake to Dubai aircraft lessor for $107m

The increase in retained earnings from the share sale will reflect in Emaar's second quarter financial statement

DAE repurchased its shares from Emaar Properties to be fully owned by Dubai's ICD. Courtesy Dubai Aerospace Enterprise
DAE repurchased its shares from Emaar Properties to be fully owned by Dubai's ICD. Courtesy Dubai Aerospace Enterprise

Emaar Properties sold its shares in Dubai Aerospace Enterprise (DAE) back to the plane lessor in a deal valued at $107 million (Dh393m), which will boost the developer's retained earnings.

The transaction will be reflected in Emaar's second quarter financial statement, the company said in a statement to the Dubai Financial Market, where its share trade.

DAE last week said it repurchased about 4 per cent of its common shares owned by Emaar, the biggest real estate developer in the UAE by market capitalisation.

"DAE is now 100 per cent owned, directly and indirectly, by the Investment Corporation of Dubai [ICD], the investment arm of the Dubai government," the aircraft lessor said.

Emaar was part of the initial group of investors, along with Dubai's sovereign wealth fund ICD, when DAE was established in 2006. DAE became one of the world’s biggest aircraft lessors after acquiring AWAS based in Dublin. The acquisition tripled the Dubai company's portfolio to about 400 aircraft, worth more than $14 billion.

"DAE’s capital position has gone from strength to strength over the years," Firoz Tarapore, chief executive of DAE, said last week.

DAE will complete the share repurchase transaction in the second quarter without any impact on its capital adequacy and liquidity metrics, Mr Tarapore said.

The state-controlled company separately said last week it raised a $440m syndicated bank loan.

DAE signed a long-term unsecured revolving credit facility with First Abu Dhabi Bank and HSBC Bank Middle East as bookrunners and mandated lead arrangers, it said.

The oversubscribed facility was closed at $440m with a group of 12 lenders and DAE will use the money to support the "future financing needs of the business", it said without providing details.

DAE raised $2.8bn of new long-term unsecured revolving credit facilities in 2018, Mr Tarapore said.

"These facilities support the growth of our business, dramatically boost the liquidity cushion and facilitate our migration to a principally unsecured debt issuer," he said.

DAE's unsecured debt-to-total-debt ratio is approaching 60 per cent, according to Mr Tarapore.

Updated: July 2, 2019 12:54 PM

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