Dubai's Union Properties has reached a Dh3.8 billion debt deal with major shareholder Emirates NBD, the developer's chief executive told the Al Bayan newspaper yesterday.
The real estate firm will transfer assets worth Dh1.1 billion to the bank, Dubai's largest by market capitalisation, which will now own a significant percentage of two developments in Dubai's financial district, Khalid Bin Kalban said.
Union Properties' remaining liabilities to ENBD, worth Dh2.7 billion, would be extended until 2017, the CEO added, although he declined to comment on the interest rate the company would pay on the revised debt.
Like many real estate firms in Dubai, Union Properties has been hit by the slump in the property sector which has seen prices fall by more than half and large numbers of projects cancelled or put on hold.
Union Properties' third-quarter net loss more than doubled as it booked additional provisions amid a sharp drop in asset valuations. In June last year, the developer said it would repay Dh2 billion in 2011 and was in the process of renegotiating terms on its other obligations to extend the tenor.
Emirates NBD is the largest shareholder in Union Properties, owning a 47.6 per cent stake, according to the Dubai Financial Market.
Union Properties' shares are down 95 per cent from a 2008 peak and were flat at 0610 GMT yesterday.