Dubai’s Union Properties gets significant time as a result of the Dh595 million debt restructuring agreement

Dubai’s Union Properties has restructured a Dh595; million debt restructuring has given the Dubai developer its biggest boost since new management took over. The Dh223 million in lender repayment is a part of a comprehensive restructuring plan that was approved by all parties.
The deal will also likely help secure financing for new projects, according to the developer. Union Properties’ shareholders were certainly thrilled by the development, leading to the stock gaining an immediate 4 percent in heavy volumes on the DFM. The stock is now up 3.6 percent to Dh0.259. (The stock’s 52-week high is Dh0.42, and Dh0.22 being the lowest.)
“The successful completion of our debt restructuring process is an important milestone in Union Properties turnaround strategy, placing us on a firm foundation to drive future growth and value creation for our shareholders,” said Amer Khansaheb, Board Member and Managing Director.
“With a bolstered balance-sheet and improved free cash flows, we are now in a strong position to leverage our deep expertise, reputation and highly sought-after land bank locations.
“The strong performance and outlook for the UAE’s real estate market provide significant opportunities for Union Properties, including the potential for new real estate developments.” The mention of new projects is informative – while the developer has the land available in Motor City, market sources were saying that UP first had to reach a deal with lenders before it can initiate serious operational moves. Now, it has got that deal.
The market is also expecting some action at some of the UP subsidiaries, including possible sell-offs or stake sales. “Some of these entities are operationally resilient and could bring in top dollar if UP were to consider any deal involving them,” said an analyst.
In July, UP had merged three of its units under the banner of ‘Edacom Owners Association Management’. In a statement, the company said: “Union Properties’ management remains focused on improving the efficiency of the business and driving cost synergies across its subsidiaries and is confident in its debt servicing abilities going forward.
“The group’s and its subsidiaries’ strong brands are being used to propel expansion and seize new opportunities brought about by the UAE’s economy’s and real estate market’s strong momentum. As it advances its recovery strategy, Union Properties also has a laser-like focus on enhancing its internal controls and governance.