Dubai developer Union Properties to start capital reduction on Aug. 29

Dubai: The Dubai developer Union Properties will go ahead with a capital reduction on August 29 after getting the all-clear from the regulator, the Securities & Commodities Authority (SCA).

The capital reduction will see Union Properties mark a key milestone in its 3-year operational and financial makeover project. The latest process will see UP address some of the legacy problems it had faced, including losses through the years.

Union Properties' stock has gained 100% plus in the year to date and is trading at Dh0.8.

From September 1, Union Properties' shares will start trading after integrating the changes.

"The company will implement a capital reduction through reducing the nominal value of each share," said Union Properties.

"As a result, the number of shares held by each shareholder will remain unchanged and will not be affected by such capital reduction and the share price will not be adjusted."

At Dh4.28 billion, UP's capital before reduction will be cut to Dh2.85 billion. The nominal value of the share will drop to Dh0.66 from Dh1.

Union Properties, listed on DFM, has seen its share price surge as shareholders enthused over the turnaround processes the management had brought in.

In the recent past, another Dubai developer, Deyaar, had taken a capital reduction approach to handle its legacy losses and bring the company into a healthier, forward-looking status.