Wednesday, Jan 18, 2012
DUBAI (Zawya Dow Jones)--Shares in Union Properties, a Dubai-based real-estate company, soared Wednesday after it confirmed it has struck a deal with major shareholder Emirates NBD (EMIRATES.DFM) regarding 3.8 billion U.A.E. dirhams ($1.03 billion) in debt.
The firm's Chief Executive Khalid bin Kalban told local Al Bayan newspaper that Union Properties will transfer property assets worth AED1.1 billion to Emirates NBD, which owns 47.6% of the developer. Three independent companies have evaluated the properties to guarantee the fairness of the deal, he added.
Union Properties shares closed trading Wednesday 12% higher at AED0.265 in a broadly positive overall market.
Bin Kalban said Emirates NBD has also agreed to postpone payment of the remaining AED2.7 billion for another 5 years, with Union Properties assets as collateral. He declined to reveal the amount of the interest to be paid on the rest of the loan, only describing it as "fair".
Union Properties is one of a number of Dubai developers that ran into financial trouble after being hit hard by the fallout from the global financial crisis, which saw housing prices in Dubai slump and a property bubble burst.
-By Shereen El Gazzar, Dow Jones Newswires, +9714 446 1684 Shereen.elgazzar@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
18-01-12 1011GMT
