Abu Dhabi: Aldar Properties PJSC Wednesday announced unit sales, asset transfers and reimbursements with the Government of Abu Dhabi, for a total consideration of Dh16.8 billion.
Under the deal, Abu Dhabi government has purchased 760 three-, four- and five-bedroom units within the Al Bandar, Al Zeina and Al Muneera developments in Al Raha Beach for a total consideration of Dh3.5bn.
“Aldar retains ownership of the remaining inventory of units at Al Raha Beach, which are available for purchase or “rent-to-own”,” the company said in a statement.
“[Wednesday's] transactions will immediately reduce Aldar’s indebtedness by Dh5bn and continue the deleveraging of its balance sheet. Aldar has repaid Dh 14.2bn in debt during 2011 including the Dh4.5bn convertible Sukuk on 10th November 2011. In addition, equity has further increased with the conversion of AED 2.106bn convertible bonds to Mubadala on 15th December 2011.”
In line with previous agreements with the Government of Abu Dhabi in relation to Yas Island, the Government of Abu Dhabi has agreed to reimburse Aldar Dh5bn towards certain existing and to be completed infrastructure assets at Al Raha Beach.
This amount will be settled by the immediate retirement of Dh5bn towards the currently outstanding infrastructure loan from the Government of Abu Dhabi. These infrastructure assets will be transferred to the relevant government authorities as and when directed by the Government of Abu Dhabi.
Ali Eid AlMheiri Chairman of Aldar Properties, said: “Following the financial framework announcement in January of this year, the Board undertook a comprehensive review of Aldar’s business model, finances and operations. As part of this process, we continued negotiations with the Government of Abu Dhabi, which led to the transactions we are announcing today, that are designed to create the solid financial foundation needed to drive returns to shareholders. Moreover, we have realigned our organisational structure, reduced headcount and refined our business strategy.”
In line with previous transactions relating to strategic assets, existing assets of Central Market and its associated infrastructure have been sold to the Government of Abu Dhabi for Dh5.7bn.
Aldar will be responsible for the construction management and supervision of the completion of the project as well as the immediate day-to-day operation and management of the facilities and tenant relations on behalf of the Government of Abu Dhabi.
The estimated completion costs of Dh2.6bn will be funded by the Abu Dhabi government.
The proceeds from the sale transactions will be received over the next four years pursuant to an agreed payment schedule which includes the receipt of Dh4.5bn in the next two months.
“With a substantial land bank across Abu Dhabi, Aldar is well placed to capitalize on future development opportunities based on demonstrable market demand. Aldar will also benefit from sustainable recurring revenues from our office, retail, hotel and education assets, as well as development management fees from large scale third party projects,” AlMheiri said.
Al Raha Beach Infrastructure: There will be no immediate impact on the income statement as a result of this element of the transaction however cost of goods sold attributable to future land and unit sales will reduce in line with the reimbursements. Liabilities will decrease with the reduction of Dh5bn of the Government of Abu Dhabi infrastructure loan.
