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Dubai-based real estate company Deyaar Development announced on Friday that its board of directors has approved a proposal to write off its accumulated losses by using the company’s legal reserve and through a capital reduction.
The proposal will be presented to the shareholders at the next general assembly meeting after obtaining the necessary regulatory approvals, the developer said in a statement to the Dubai Financial Market (DMF), where its shares trade.
The stock jumped 2.6 percent to 0.46 dirhams shortly after opening on Friday.
While the developer swung to a net profit of 50.8 million dirhams ($13.8 million) for 2021, its accumulated losses as of December 31 came to 1.70 billion dirhams, it said earlier this month. The company’s accumulated losses reached 1.75 billion dirhams in in 2020.
As per the balance sheet, legal reserve stood at 303 million dirhams.
Majority-owned by Dubai Islamic Bank, Deyaar said its accumulated losses to capital ratio reached 29.5 percent. It said the main reason for the losses were the provision for impairment of assets.
The application of International Financial Reporting Standards (IFRS) also resulted in provision for assets amounting to 661 million dirhams, it added.
Regarding its dispute with developer Limitless, the board decided to continue the negotiations to reach an amicable agreement as soon as possible.
The board also approved bank facilities for its Regalia real estate project.
(Reporting by Brinda Darasha; editing by Cleofe Maceda)
