Dubai-based developer has have debts of AED6.8bn
Union Properties’ debt pile of AED6.8bn ($1.9bn) is expected to wipe out all its equity value over the next year.
According to a report by Swiss bank Credit Suisse even if Union Properties can collect outstanding payments on delivery and sell real estate assets there would be no equity value left after servicing all debt requirements. The bank has cut its target share price for the company to AED0.03 a share.
Union Properties is expected to collect around AED2bn on completion of properties currently under construction. But Credit Suisse says that this is not enough to meet its AED6.8bn debt obligations.
The bank’s report adds that the current Dubai real estate market is not considered conducive for Union Properties to sell any of its notable assets such as the Ritz Carlton in the Dubai International Financial Centre. Union Properties’ investment properties portfolio is valued at AED2.6bn.
In early 2009 the developer suspended work on a F1 theme park, part of their Motor City project (MEED 18:12:09).
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