Dubai's Union Properties gets stay on land auction related to its subsidiary Thermo llc

Dubai: The Dubai developer Union Properties has won a reprieve from the local courts, which has stayed an auction of land held by it.

The auction process, triggered by a local bank, is related to debt held by one of the Union Properties’ subsidiaries, Thermo llc. After the latter failed to make a payment, the bank swung into action, launching the auction where it would sell land owned by Union Properties and reclaim its dues.

On Monday at the DFM, the company's stock was initially trading positive at Dh0.32, up 3.12 per cent. By 11.30, the stock had slipped into the red, by 0.6 per cent. (The broader DFM index is also down by 0.65 per cent, shedding 25 points.)

“Since the company (Union Properties) as the mother company had previously guaranteed the debt of this subsidiary, the bank initiated this measure,” said the developer.

And now, ‘the sale has been halted by the Execution Judge based on the bank’s request.

“Union Properties is in the final stages of negotiating the settlement agreement, which is being reviewed by the bank.”

Thermo llc, which is into MEP (mechanical, engineering, plumbing) services, is in the process of being wound down, as part of the Union Properties' turnaround gameplan. The developer, whose portfolio includes Green Community and Motor City, has been addressing legacy issues and making a slow return to profit. Recently, it reached a settlement that saw it get more than Dh620 million from its ex-chairman.