Maple Invest, the company planning to take Damac Properties private has postponed its acquisition offer, pending a regulatory review. Reuters
Maple Invest, the company planning to take Damac Properties private has postponed its acquisition offer, pending a regulatory review. Reuters
Maple Invest, the company planning to take Damac Properties private has postponed its acquisition offer, pending a regulatory review. Reuters
Maple Invest, the company planning to take Damac Properties private has postponed its acquisition offer, pending a regulatory review. Reuters

Business

Hussain Sajwani delays bid to take Damac private as market regulator reviews deal

Mr Sajwani, who owns 72% of Damac, plans to fully acquire shares of the developer and delist it

Sarmad Khan
Sarmad Khan
Abu Dhabi

June 22, 2021

  • English
  • Arabic

Maple Invest, the company that plans to take Damac Properties private, is delaying its offer to acquire publicly-traded shares of the Dubai developer as the transaction is pending a regulatory review.

Damac received a formal letter from Maple notifying it of its intention to postpone the acquisition, the company said in a filing to the Dubai Financial Market, where its shares currently trade.

“Given that the Securities and Commodities Authority is undergoing a review in this respect, it has been decided to postpone the acquisition procedures until the review is concluded,” Maple said in the letter to Damac.

Maple Invest, a British Virgin Islands company owned by Dubai billionaire Hussain Sajwani, plans to make a voluntary and conditional offer to acquire shares in the issued and paid up share capital of Damac that will result in it owning no less than 90 per cent and up to 100 per cent, it said in a June 9 statement.

Mr Sajwani, who currently owns 72 per cent of the company, has submitted an offer to acquire the remaining stake at Dh1.30 per share, amounting to about Dh2.185 billion ($595 million).

Once Maple receives acceptance from more than 90 per cent of the shareholders, it plans to acquire the remaining shares through a mandatory offer under a "squeeze out" agreement and then delist, the investment company said at the time.

Mr Sajwani resigned as the chairman of Damac prior to making the offer. On June 15, the Dubai developer named vice chairman Farooq Arjomand as his replacement while Ali Binjab was appointed as vice chairman of the company, Damac said in a statement.

The company also appointed KPMG Lower Gulf as valuer and Arqaam Capital as financial adviser to evaluate the offer from Maple. Al Tamimi & Company has been named as legal adviser.

Damac, which built the Middle East’s only Trump-branded golf course, has reported six successive quarterly losses and its share price has fallen by more than 60 per cent from its most recent peak in August 2017.

The company, which has projects in the UAE, Lebanon, the UK, Jordan, Saudi Arabia and Qatar, reported a loss of Dh189.6m in the first quarter of this year, compared with a Dh106.1m loss in the same period last year.

As of March 31, it had delivered 33,334 homes and had a development portfolio of 33,000 more units at various stages of progress and planning, according to its website.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

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Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

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