Emaar Properties, the largest developer in the region, is in negotiations to roll over Dh4.5 billion (US$1.22bn) worth of short-term debt that is coming due over the next 12 months. Property companies across the Emirates are trying to preserve their cash as the market remains slow, but only the larger companies with income-producing assets are succeeding in negotiating new terms on their debts, analysts said. An Emaar spokeswoman said yesterday the company "expects the loans to be converted into project finance during this year", but did not specify the amount.
"Emaar's debt position is very comfortable and the company has one of the lowest debt-to-equity ratios," she said. "The loans maturing in the next one year are primarily bridge loans for Emaar's international projects, and as per terms, are to be converted into longer-term project financing." Majed Azzam, an analyst at HC Securities, said the company had already rolled over most of its short-term liabilities.
"It is very positive for the company," he said. "It gives them some breathing room to sort out some of their finances and alleviate some of their near-term liquidity concerns." He said Emaar's income-producing hotels and shopping malls would make it easier to negotiate with banks. Companies across the sector were trying similar strategies to lessen the pressure on their balance sheets this year, which is expected to continue to see low sales activity.
"In these current conditions people would like to hold on to their cash," he said. Union Properties, another major Dubai property developer, has also managed to roll over some of its short-term debt after seeing sales decline and customer defaults increase. Emaar shares fell about 1 per cent yesterday. bhope@thenational.ae
