Dubai: Union Properties, the Dubai developer behind Uptown Mirdiff and other high-end communities, has completed a debt restructuring deal with Emirates NBD. Deal applies to the full Dh946 million outstandings the developer has with the bank.
Payment of the initial amount has also been made, as per the terms of the deal.
It was on Sunday that Union Properties announced it had put together a three-year turnaround plan, and backed it up with the launch of a new project near its Dubai Autodrome destination.
The UP share price was trading in the red early on Monday. Following the announcement, it recovered some of the lost ground.
First steps towards turnaround
Now, armed with the debt repayment plan with Emirates NBD, it will free up UP to focus on its core interests – development.
“Khalifa Hasan Al Hammadi, Chairman, in a statement says as much. “Restructuring our outstanding debt was out number one priority. This is now done.
“With better cashflows and the support of our main creditor, we can from this day exclusively focus on the development of our activities and projects.
“This is a strong sign of confidence from our banking partner.”
In a crunch
Union Properties is the name behind the Uptown and Motor City residential clusters. But in the last three to four years, the developer had been going through a cash squeeze and had slowed down on new launches. The most recent financial results too showed a company in quite some difficulty.
In the recent past, there had been speculation the developer could sell off some of its prized assets. There were also talks with potential Chinese entities about potential equity/debt tie-ups.
But the Dh946 million debt restructure represents a major milestone by all measure.
“We have efficiently dealt with legacy issues and are now fully geared for a new growth chapter in our history, which will improve our commitment to the banks and enhance confidence of shareholders,” the Chairman added in the statement.
• Alongside this, the Dubai developer also managed to arrive at “better” repayments terms, which would, in turn, improve its cashflow.
• Emirates NBD is the main creditor to Union Properties.