Dubai: Shareholders of Emaar Properties yesterday approved a resolution to allow foreigners to become board members — a shift in its corporate policy that analysts say reflects its readiness to strengthen corporate governance.
The new articles stipulate that a majority of board members will be Emiratis. It is, however, unclear how many foreigners will be inducted onto the board.
"Legally it was possible even earlier. However, with the resolution, it means that the company is ready to take corporate governance to the next level," said investment adviser Raju Menon, managing partner of Morison Menon Chartered Accountant.
"This will encourage international investors to forge alliances with Emaar. We could see Emaar joining some high-end collaboration with international partners."
However, it is not quite clear how much of this has been driven by Emaar's financial health, which was badly impacted by the fin-ancial downturn of 2008.
Hussain Al Qamzi, deputy director of the board of Emaar, said, "We have modified the company's Articles of Association in line with the UAE Companies Law. The majority of our shareholders are foreigners."
At its extraordinary general meeting, Emaar shareholders yesterday also approved a $500 million convertible bond with a 7.5 per cent coupon rate. The conversion rate per bond has been fixed at Dh4.75.
The notes, due in 2015, are intended to contribute to the conversion of Emaar's short-term liabilities into long-term debt. The notes received overwhelming response from investors with demand in excess of $3 billion.
Emaar will make an application for the notes to be listed on the Luxembourg Stock Exchange and admitted to trading on the Euro MTF market. JPMorgan, Royal Bank of Scotland and Standard Chartered are acting as joint bookrunners.
Al Qamzi said the company received over six times oversubscription for the bond issue totalling $3 billion from 230 international investors.
"About 37 per cent of subscription requests have come from the UK, 22 per cent from Europe, 20 per cent from American companies outside the US, 12 per cent from Asia and 9 per cent from the GCC," Al Qamzi announced at the meeting.
He said short-term debt reached $1.4 billion at the end of the third quarter.
Aldar appoints new CEO
Aldar Properties yesterday announced that Sami Asad, currently Aldar's Chief Operating Officer, will succeed John Bullough as Chief Executive Officer following his retirement from the company. Mohammad Khalifa Al Mubarak will act as Deputy Chief Executive Officer whilst continuing in his role as Chief Commercial Officer.
