Jan 16 2010 |
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Alaqaria Rating Agency Updates
Fitch Rating Watch Positive, Moody's DowngradeDoha - 16 January 2010: Qatar Real Estate Investment Company (" Alaqaria ") noted as a positive development the announcement by Fitch Ratings ("Fitch"), that it has placed the company's Long term Issuer Default (IDR) rating and senior unsecured ratings of BBB+ on Rating Watch Positive. In the same announcement, Alaqaria noted, Fitch reaffirmed the short term IDR of 'F2'.
This will affect Alaqaria 's corporate rating as well as the rating for its USD300 million of outstanding Sukuk due 2012 and will result in the ratings agency upgrading or maintaining its current ratings. Fitch will review and announce its decision upon completion of the proposed merger, according to the announcement.
This announcement follows an early statement by Moody's Investors Services ("Moody's") in which it said that it had downgraded the ratings for Alaqaria and its USD300 million Sukuk due 2012, to Baa1 from A2. The ratings have been kept on review for further possible downgrade once the merger with Barwa Real Estate Company (" Barwa ") closes.
In the announcement, the Government of Qatar and Qatari Diar Real Estate Company ("Qatari Diar") confirmed their support for the transaction. Subject to detailed offer terms, Qatari Diar agrees to approve the merger and accept the offer in respect of its holdings of 45% and 27% of the share capital of Barwa and Alaqaria respectively and agrees to maintain a 45% equity shareholding in the enlarged Barwa group.
Commenting on the announcement by Fitch, Sheikh Khalid Bin Khalifa Bin Jassim Al- Thani
Chairman and Managing Director of
Alaqaria
said: "Today's news from Fitch underlines the logic of the Qatari government's vision in creating a Qatari real estate champion through the implementation of this merger. The Government's unequivocal support for this transaction has been expressed through Qatari Diar's decision to maintain its shareholding within the enlarged group - thereby increasing their holding in
Alaqaria
from 27% to 45%, underlining their very real support for us and our strategy."
Alaqaria 's Chief Executive Officer, Mohammed Ismail Mandani, added, " Alaqaria already enjoys a strong credit rating due to its position as one of the country's leading developers and its long history of delivering steady growth and stable cash flow generation. This is resulting from the company's solid business model and the consistent successful delivery of its strategy over time. We are pleased that Fitch has recognised the potential benefits of this merger.
"However, conversely, we do not understand the rationale behind Moody's downgrade, based on their belief that Government support for Alaqaria will be reduced following the merger. In fact, not only have the Government and Qatari Diar been explicit about their support for the transaction, but the Government's shareholding in Alaqaria through Qatari Diar will actually increase significantly following the completion of the transaction."
-Ends-
About Alaqaria
Qatar Real Estate Investment Company
, also known as
Alaqaria
, is a Qatari public shareholding company, with diversified activities in the real estate sector in the State of Qatar, and the largest real estate developer in the Industrial cities of Qatar.
Alaqaria was established in 1995. The Company was one of the first to be listed on the Doha Securities Exchange (DSM) and is rated Baa1 by Moody's and BBB+ by Fitch. Alaqaria 's total shareholders' equity was QR2.0 billion and total assets were QR6.6 billion as of 30 September 2009. Alaqaria owns 50% of ASAS Real Estate Co., 33% of Freej Real Estate Co., 8% of Mazaya Qatar Co. and 17% of Barwa Albaraha Co.
For further information
Capital MS&L
Patrick Forbes / Farris Bukhari +974 715 5301
Neil Doyle/Nick Bastin +44 (0)20 7307 5330
© Press Release 2010
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