Dubai: Accumulated losses at Dubai-based Gulf General Investment Co. has crossed Dh1.67 billion – which is a whopping 93.35 per cent of the share capital. It will now start a capital reduction programme to offset the losses.
The Board of Directors have now come up with a set of measures to tackle the losses and steer the company – which is into real estate, manufacturing as well as in other sectors – back into the black. The measures include:
• Reduce the paid up capital;
• Swap assets to settle a sizeable portion of the liabilities;
• Settle existing loans by selling assets to lenders; and
• Focus on ‘profit-making’ investments’.
The losses were brought about because of the general decline in the fair value of investments – an issue that has cropped up for other listed companies as well. Also hurting GGICO was the operational dip in some of its key subsidiaries.
The combined borrowings as of end December 2020 was Dh2.92 billion, “which is payable within one year from the reporting date,” a statement said.
Dh5.75millionGGICO's losses for 2020 compared with a net loss of Dh158.09 million a year ago
The Group is in the process of negotiation with lenders to restructure existing loan and credit facilities to meet its commitments as they fall due in the foreseeable future.
“The Board of Directors expect the group will meet its funding applications through restructuring of certain existing loan and credit facilities, existing cash and bank balances, and future income generated from operations and sale of investment and properties.”
GGICO’s investment property portfolio is valued at Dh2.58 billion – this is where the revaluation would have been most keenly felt as UAE’s property market recorded sharp drop in values.
The company also holds properties for development with a combined value of Dh174.1 million.