By Staff

Shareholders of Emaar Properties on Monday approved a board proposal to allow foreigners to become board members and to issue $500m convertible bonds through its wholly owned subsidiary.

The shareholders at an extraordinary general meeting (EGM) on Monday also authorised the company to increase the share capital “from time to time in such amount as may be required to satisfy conversion of the notes into shares …”

The conversion rate per bond has been fixed at Dh4.75.

The notes, due in 2015, are intended to contribute to the conversion of Emaar’s short-term liabilities into long-term debt. The notes received overwhelming response from investors with demand in excess of $3 billion, media reports said.

Emaar has established a wholly owned subsidiary, which proposes to issue up to $500m of convertible notes on the Luxembourg Stock Exchange. The money will be lent to Emaar while the notes would be converted, from time to time, into fully paid ordinary shares at the discretion of the holder of the notes.

The EGM, chaired by Hussain Al Qemzi, Vice-Chairman of Emaar, approved the amendment of the Articles of Association of Emaar to replace a clause with “In all cases, the majority of the members of the board of directors must be nationals of the United Arab Emirates” to enable the company to induct non-UAE nationals on the board. The new articles stipulate that a majority of board members will be Emiratis.

At present, Emaar has eight directors on its board, all UAE nationals, with Mohamed Ali Alabbar and Hussain Al Qemzi as chairman and vice-chairman, respectively, of the board.

Emaar will make an application for the notes to be listed on the Luxembourg Stock Exchange and admitted to trading on the Euro MTF market. JPMorgan, Royal Bank of Scotland and Standard Chartered are acting as joint bookrunners.
Al Qamzi said the company received over six times oversubscription for the bond issue totalling $3 billion from 230 international investors.

“About 37 per cent of subscription requests have come from the UK, 22 per cent from Europe, 20 per cent from American companies outside the US, 12 per cent from Asia and 9 per cent from the GCC,” Al Qamzi announced at the meeting.