Emaar in talks over separation from Indian partner, says report

Report says founder of MGF Development no longer wants to be involved in project.

Emaar MGF logo is seen on top of its business centre on a main crossing in Gurgaon, outside New Delhi, India. Prashanth Vishwanathan / The National

Emaar Properties is in talks with its Indian partner MGF Development about winding down its 10-year-old joint venture in the country.

India’s Economic Times reported that both sides were thrashing out a deal to separate assets owned by the joint venture, which was set up in February 2005 with an investment of about US$1.5 billion by Emaar Properties.

The report quoted a source stating that MGF Development’s head Shravan Gupta was “no longer keen to actively participate” in the joint venture.

Emaar Properties declined to comment on the newspaper report.

“As a matter of policy, we do not comment on market rumours or speculation,” a spokesman said. “India is one of our key markets and we are committed to our projects in the country.”

Emaar shares in Dubai did not react to the report, closing unchanged at Dh8.10.

Emaar MGF is said to have a land bank of 3,035 hectares and 55 projects under development with a saleable area of 6 million square metres. These have a combined value of about $5bn.

According to its most recent financial statement for the three months to March 30, Emaar MGF and its related parties owe $722 million to Emaar Properties. About $513m of this is secured against existing developments.

Emaar MGF has faced a number of troubles since its formation.

The company had announced plans to float in 2008 with a view to raising $1.7bn through the sale of a 10 per cent stake, but this never materialised. It was also criticised for the late delivery of a $240m athlete’s village that was used for the 2010 Commonwealth Games in Delhi.

According to the Economic Times, the joint venture has racked up combined losses of $206m over the past three years, including a loss of $60.3m in 2014.

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