Dubai: The Dubai developer Union Properties is closer to getting its hands on Dh620 million.
This follows the 'commencement' of execution' on the settlement agreement it had reached with the former chairman, Khalifa Al Hammadi, members of his family and others. The funds flowing in will definitely be timely as Union Properties moves on with a turnaround plan and other steps to effect a full-scale financial restructuring.
Starting the settlement agreement process follows 'signing of side agreements with the custodian and escrow agent' and - in April - receiving the go-ahead from a majority shareholders on the deal with the ex-chairman.
According to the agreement, the Dh620 million will be paid to Union Properties through a structured instalment plan.
"We believe that this progress marks a significant turning point and enable us to refocus our efforts on the core business and strategic growth initiatives," said Amer Khansaheb, Managing Director. "The company remains dedicated to its shareholders and stakeholders and will continue to work diligently to resolve outstanding matters in a transparent manner.”
As and when the full sum of Dh620 million gets credited, it will be another stress buster for the developer, which had endured an extended rough patch in recent years. In the last couple of quarters, the first signs of a bounce back was visible, which is what the company would want to see continue.
The stock price definitely has been on the mend, and is quoting at Dh0.38 and close to the 52-week peak of Dh0.47. "The peak price reflected investors' belief that Union Properties managed to see off the worst phase," said an analyst. "The stock bounce was reinforced once the shareholder approval was received last April to strike the deal with the ex-chairman."