Dubai Holding To Merge 4 Of Its Leading Property Entities

Dubai Holding is one of the well known and leading Dubai real estate development and investment firm issued a statement, that it will merge four of its leading property entities which includes: Bawadi, Dubai Properties, Sama Dubai and Remraam and the Tiger Woods golf course. These property entities are being merged in order to form one large property entity in the Middle East.

After combining these four, it will become one major property entity. This merger moves ahead of a planned merger between Dubai Holding’s property subsidiaries – Sama Dubai, Tatweer, Emaar properties and Dubai properties later this year. Dubai Holding also stated that it would also merge the back office operations in order to cut costs.

The merger between the two of these leading master developers is to be done by October as per the government’s plan. The merger of the two Dubai Holding’s three entities and Emaar’s merger would create a company worth an asset base of Dh194 billion and a debt of Dh13.4 billion. A rough idea of 7 percent of the total assets will be given. Moreover, they both are committed to finalize their merger somewhere around October. Merrill Lynch and RBS which were retained as the financial advisers for Emaar and Dubai Holding respectively are advising the two as far as the merger is concerned, as due diligence continues. Both Dubai properties and Sama Dubai together possess one of the largest land banks within the North Africa and Middle East region covering a geographical stretch from UAE to Morocco.

After Emaar and Dubai Properties Merger New Entity to have Dh194bn

Emaar properties have a proposed merger with three Dubai Holding entities and it has been said that now the combined assets are Dh194 billion. Moreover, with their merger a new entity has been created. Emaar Chairman Mohamed Alabbar said to Dubai Financial Market: “The new entity will have Dh13.4 billion of debt obligations, around seven per cent of total assets valued at Dh194bn.”

Dubai properties, Sama Dubai and Tatweer, all three entities of Dubai Holding have a solid land bank, thereby, contributing positively to the consolidation. At the end of the year 2008, the 3 real estate developers excluding Emaar properties has a total asset of Dh126 billion, moreover, an external debt of Dh3.4 billion. This complete are just 2.7 percent of the total assets of the 3 companies. As per 31^st March 2009, the total book value of assets of the largest listed Arab developer was at Dh68bn. The total debt obligation comes out to be 15 percent of total assets that is Dh10bn. Sama Dubai, Dubai properties and Tatweer are the three entities of Dubai Holding which are valued at Dh126bn as of December 2008. Moreover, they have external debt obligations as well which are around Dh3.4bn.

Although, four of them will join their assets, however, they will also share a debt of Dh13.4 billion. Out of these 4 Emaar properties is the only Dubai real estate developer that is being listed on DFM which at the end of March had the total assets worth Dh68 billion and the debt obligation of Dh10 billion.