x Abu Dhabi, UAESaturday 29 July 2017

Aldar board to meet on sale of assets

Aldar, Abu Dhabi's largest property developer, is considering the sale of more assets. Its board will meet tomorrow.

The Souk in Abu Dhabi, seen here in 2009, is one of Aldar's projects. Matilde Gattoni / Bloomberg News
The Souk in Abu Dhabi, seen here in 2009, is one of Aldar's projects. Matilde Gattoni / Bloomberg News

Aldar Properties, the Abu Dhabi developer behind Yas Island and Raha Beach, is preparing to sell more property as it continues to reorganise its core business.

The board of directors will meet tomorrow to consider "the sale … of certain assets", the company announced in a statement posted on the Abu Dhabi Securities Exchange.

Board approval for a property sale would be necessary only for a "strategic asset", said Ankur Khetawat, an analyst with HC Securities.

Aldar's shares closed down 3.5 per cent at 83 fils in trading yesterday, after falling 4.7 per cent in early trading.

Traders "fear that [Aldar] may be selling assets to ease the liquidity situation", Mr Khetawat said.

Aldar is carrying Dh13.1 billion (US$3.56bn) in debt, with Dh6.3bn maturing by the end of 2013, according to Bloomberg data.

But the company's cash flow has been bolstered this year by the handovers of homes on Raha Beach and pre-sales of homes in Al Bateen Park, as well as the completion of three new schools in September.

Aldar carried Dh2.2bn in cash at the end of the third quarter, and was able to raise an additional Dh734.6 million in financing, "demonstrating continued access to funding markets", the company reported.

"In the near term, they should be fine," Mr Khetawat said.

Speculation focused on the company's key remaining high-profile properties, including HQ, the company's circular building known at the Coin, and Central Market, the shopping centre development in Abu Dhabi designed by Norman Foster.

The company also may be shopping the 12-storey office tower in the Al Muneera development, according to one property executive, who asked not to be named. But the company did not offer details and a spokesman declined to comment. Aldar's shares have been on a roller coaster in recent days, as investors speculate about the fate of the company.

The stock price fell to a new low of 82 fils on December 21 amid concerns the company would delist, after Mubadala Development converted Dh2.1bn in bonds into stock.

On Sunday, Aldar's shares jumped 2.4 per cent, after the company released a statement saying the board was "fully committed to maintaining the company's listing" on the Abu Dhabi Securities Exchange (ADX).

In January, Aldar announced a funding plan under which the Abu Dhabi Government would buy Dh10.9bn of the company's infrastructure assets on Yas Island, including the Ferrari World theme park, and issued a Dh2.8bn convertible bond to Mubadala, a strategic investment company owned by the Abu Dhabi Government.

Aldar has been continuing to complete aspects of the sale of property throughout the year. In the third quarter, the company recognised Dh2.6bn from a land sale to the Government, part of the January deal.

The Government is the likely buyer of any new property sale, analysts say.

"Most likely these assets will be sold to Abu Dhabi's Government as the company completes implementing the rescue plan announced earlier this year," Mohammed Ali Yasin, the chief investment officer at Capm Investment, told Bloomberg News. "The plan is being implemented in stages and this could be simply the finalisation of it before year-end."

The company says it will also discuss "operational matters relating to the company and its projects" at tomorrow's board meeting.

The company cut 105 employees, a quarter of its staff, in October as it shifted its priority to property and asset management, while de-emphasising new development projects.

"Overall, we see Aldar as a business that is being run with the objective of meeting its debt obligations as a priority over growth," Mohammad Kamal, an analyst at Arqaam Capital,said at the time.