By Ben Roberts  www.constructionweekonline.com

Emaar Properties is to raise up to US $500 million in five-year convertible notes through a new subsidiary called Pyrus Company, a statement to the Dubai Financial Markets Index has revealed.

The company had debts of AED9.2 billion in June.
The company had debts of AED9.2 billion in June.

The Dubai-based developer behind the world’s tallest tower is positioning Cayman-domiciled Pyrus to issue the notes on the Luxembourg Stock Exchange, the proceeds of which will be lent to Emaar. The notes can be converted into ordinary shares “from time to time at the option of the holder of the notes”, the statement says.

Emaar, which held a delayed board of director meeting yesterday, is looking to reduce its short-term debts with longer-term borrowing. At the end of June its total debts stood at AED9.2 billion, according to its financial statement, with AED5.2 billion due within the next year.

The developer posted net profits of AED802 million for the second quarter, below analysts’ expectations, with half-year profits hitting AEDE1.656 billion.

The issuance had been ‘upscaled’ from an initial target of US $375 million due to demand for the bonds. The issuance is dependent on the approval of shareholders, who will be invited to an extraordinary general meeting on the back of this money-raising venture, minutes from the meeting reveal.

JP Morgan Securities, Royal Bank of Scotland and Standard Chartered are handling the issuance. Company shares rose more than 0.7% yesterday to close at AED3.8. Analysts across the Gulf have recommended ‘buy’ or ‘overweight’ positions since April.

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