By Ben Robert www.constructionweekonline.com
Emaar Properties has announced it will roll over its US $1.32 billion (AED4.84 billion) debts into long-term project funding as fears recede of a repeat of the bail-out needed for stricken developer Nakheel.
In a statement to the newswires the company said it was ‘very comfortable’ with its US $1.22 billion loans – mainly bridge loans for overseas buildings – and pointed to its debt-equity ratio, which is one of the best in the sector.
The successful debt conversion indicates that it will not need to divest any projects – which includes Burj Khalifa, the world’s tallest building – to shore up its balance sheet and creates a positive run-up to its annual general meeting on Thursday 29th April.
The move is far from the fate of Nakheel, the property developer at the heart of the request by Dubai to delay its bond maturities last November, which unsettled global markets. The property developer is to receive most of the US $9.5 billion injection from Dubai to Dubai World, the state owned conglomerate that is parent to Nakheel.
Dubai World is now able to pay Nakheel’s Islamic bonds to international creditors that mature this year and in 2011, as well as paying banks in five- and eight-year debt tranches. Around 90 banks were said to be exposed, according to reports.
Emaar posted net profits of US $78.6 million, up from US $33.4 million from the previous year, although annual revenue US $2.28 billion, down almost US $600 million, with falls also in annual net operating profits of nearly a half – US $633 million compared to US $1.153 billion in 2008.
In its financial statement Emaar stated that it would focus on middle income housing and further diversify its portfolio by ‘realizing the benefits of its investments in shopping malls and hospitality & leisure’.
On Sunday it announced that Burj Khalifa is to tap solar power for residential water heating, using technology installed and operated by SOLE UAE Solar Systems.