The British building consultancy Mouchel Group expects to complete the sale of its Middle East business by September next year as it struggles to collect payments from Dubai developers.
Mouchel to sell regional unit within 15 months
DUBAI // The British building consultancy Mouchel Group expects to complete the sale of its Middle East business by September next year as it struggles to collect payments from Dubai developers. The company, which said late last year it was owed Dh59.8 million (US$16.2m) in unpaid bills in Dubai, initiated the sale of its regional operations shortly after the Dubai World conglomerate asked creditors last November for a six-month debt standstill.
A slowdown in construction and outstanding debt issues have led Mouchel to wind down operations in Dubai, despite business in Abu Dhabi being more stable. The company has about 37 staff in its Dubai office, compared with 500 at the peak of the construction boom in 2008, and about 70 in the capital. Mouchel also had significant exposure to Nakheel, the Dubai World property unit that is restructuring $10.5bn of debt.
The company, which was hired as a project manager on Nakheel's Waterfront development and worked on the Jumeirah Village South project, said it had been "encouraged" by the developer's repayment offer. Nakheel offered to pay contractors 40 per cent of their agreed claims in cash and 60 per cent in the form of a publicly tradable security with an annual return of 10 per cent. "Other amounts will take longer to recover but the process continues and also includes other clients in the region," Mouchel said.
"Our cash flow forecasts still include very little for collection of Dubai contract receivables, most of which have now either been impaired or are likely to form part of the planned sale of the Middle East business." Mouchel and its joint-venture partner Parkman have worked with Sorouh Real Estate as infrastructure consultants on a range of projects in Abu Dhabi. @Email:firstname.lastname@example.org