Abu Dhabi: Aldar Properties, Abu Dhabi's biggest developer, will consider the sale of assets at a board meeting tomorrow as well as calling a shareholders' meeting to approve the sale of convertible bonds. The shares dropped.
The board will also consider the conversion into shares of bonds sold in 2008 to Abu Dhabi government-run Mubadala Development, Aldar said in a statement to the Abu Dhabi bourse.
Aldar, which is building thousands of homes and offices across Abu Dhabi, posted its biggest quarterly loss on record in the third quarter after the global financial crisis drove Abu Dhabi property prices down more than 30 per cent from their peak in mid-2008.
Standard & Poor's in November lowered Aldar's corporate-credit rating two levels to B, the fifth-highest non-investment grade, because of concerns about financing and "challenging" market conditions.
Aldar will need Dh9.8 billion by 2011 to "survive" as the UAE's property market recovers, Bank of America Merrill Lynch said in a report dated November 2.
The company has Dh30.3 billion of debt outstanding, including Dh16.8 billion due in 2011, according to data compiled by Bloomberg.
The developer said in March it sold assets on Yas Island, a tourism development off Abu Dhabi's coast, to the government for Dh9.14 billion.
Aldar appointed Sami Asad as its third chief executive officer in four years in November. Aldar shares tumbled 5.4 per cent, the most since November 11, to Dh2.27 at 11.04am in Abu Dhabi.
Arabtec
Meanwhile, Dubai builder Arabtec said its board will call a shareholders meeting to seek approval for a capital raise through a rights issue and sale of five-year convertible debt.
The largest builder in the UAE by market value said yesterday it will call an extraordinary shareholders meeting to consider an issue of 398.67 million shares at Dh1 a share to existing shareholders and sell $150 million worth convertible bonds.
The company's board of directors will meet on January 16, it said in a statement to the Abu Dhabi bourse.
Arabtec plans to use the proceeds to fund its expansion plans and increase working capital, the statement said. Arabtec, which is bidding for $8.17 billion of work outside its local markets, may look at new funding sources for its expansion plans, its chief financial officer told the Reuters Middle East Investment Summit in Dubai in October.
The company is expanding overseas to diversify its portfolio away from Dubai's property sector.
Property prices in Dubai have been under pressure since late last year.
Earlier in the month, Arabtec's Chief Executive Riad Kamal was handed a trading ban by the country's regulator, said he sold shares prior to the announcement of projects in May last year as part of his portfolio reshuffle.
