They also agreed to raise the company's foreign ownership limit to 49%
Union Properties gets shareholders' approval for Dh1bn sukuk
Union Properties shareholders approved the developer's plans to shore up its finances through the issuance of up to Dh1 billion in sukuk and increase the company’s foreign ownership limit, as the firm continues to re-organise its business amid tough market conditions.
The Dubai developer that swung to a Dh2.38bn loss last year, will privately place the Islamic bond to one or more qualified investors, it said in a statement on Sunday to Dubai Financial Market, where its shares are traded.
The Sharia-compliant debt instrument, which will not be convertible into company shares, won't pay more than 9 per cent profit and will be payable in 10 years, the company said without stating when the transaction is expected to take place.
The shareholders at the general assembly meeting authorised the board to raise funds “through one issuance, or several issuances or a [debt] programme”, it said in the statement.
Union Properties has struggled to maintain profitability amid sliding real estate prices in the UAE. After a massive loss last year, it reported Dh180 million in first quarter net income in April. The company has been actively looking to diversify income streams, expand its footprint outside its home market and enter new business lines.
In December, Union Properties said it will sell shares in its facilities management unit through an initial public offering in the second half of 2018. Union Properties will float 100 per cent of ServeU shares by listing the unit on the Dubai bourse and will use the proceeds from the sale to boost its investment portfolio and operations, it said at the time. This year, it also sold its stake in district cooling firm Emicool.
In April, the company dismissed three board members - Khalid Al Kalban, Ali Al Fardan and Mohammad Al Ketbi. Last week, it elected to the board Ahmed Khouri, Khalifa Alhammadi and Amna Alhammadi, who will represent NBB Capital Investment.