Dubai: Dubai’s listed developer Union Properties PJSC, on Friday, announced a breakthrough in its 'legacy debt' restructuring challenges by entering into a settlement with EmiratesNBD and Dubailand for Dh1.25 billion.
Under the agreement with Dubai’s biggest bank, Union Properties will pay a settlement amount of Dh850 million to Emirates NBD in installments within nine months of the date of executing the agreement.
“After a long journey and constructive negotiation”, Union Properties has announced a major step forward by achieving a settlement with Dubailand for Dh400 as well.
Under the agreement, Dubailand Union Properties will pay Dh400 million in installments over a period of three years. Furthermore, Dubailand will provide a no-objection certificate, allowing Union Properties to repurpose parts of its Motor City master plan, including the theme park land.
“This will allow Union Properties to apply to the zoning authority for a change of usage permit. Once approved, it will develop additional residential zones and increased GFA, thereby unlocking further value in Union Properties Motor City master plan, resulting in increased shareholder value,” the company said in a statement of Dubai Financial Markets (DFM).
Amer Khansaheb, Board Member and Managing Director of Union Properties PJSC said, “The recent Settlement Agreements with Dubailand and Emirates NBD not only underscore our unwavering commitment to addressing challenges through effective means but also highlight the paramount importance of productive cooperation within the dynamic real estate sector.”
Khansaheb said, “Our resolve at Union Properties to surmount obstacles aligns seamlessly with our remarkable progress in implementing our turnaround strategy and our steadfast commitment to executing our recovery plan. We appreciate the trust and continuous support of our Shareholders.”
According to the developer, these settlements are as a monumental achievement for Union Properties Company. The company’s new board, appointed in December 2021, was tasked with the mammoth task of a turnaround strategy and steering the organisation back towards profitability.
The Securities and Commodities Authority (SCA), the UAE's markets regulator, filed a complaint against Union Properties' senior executives in October 2021, accusing them of selling one of the company's property assets at a price below its real value, forgery, abuse of authority, fraud and damage to the interests of the company.