Emaar moves to quell Saudi deal confusion

Emaar said on Tuesday it still does not know the value of the deal with Kingdom Holding to build the world’s tallest tower in Jeddah, and suggested the Saudi company should have waited with the announcement until a number of other agreements had been finalised.

“As the project is currently at the feasibility and master plan review stage, the level of income currently cannot be envisaged,” the company said in a written response to the UAE bourse regulator, which asked Emaar for detailed clarification about a deal on Monday.

The fee received by Emaar is dependent on the resource cost incurred and to the total development value for the tower.

Emaar is also entitled to an incentive fees if project returns are above a certain threshold, the company said. “In view of all the required agreements not having been finalised as yet, no announcement was made by Emaar in respect of this agreement.

However, Kingdom Holding Company announced the transaction on 13 June 2009 without informing Emaar,” the Dubai-based developer said.

“We shall provide such information subsequent to finalisation of such strategy by the company.”

Shares in Emaar gained 7.18 percent on Sunday, the first day of trading after Kingdom Holding said it had chosen the company to build a tower that will be more than 1,000 metres high in Jeddah, Saudi’s second most populous city.

The share declined 5.74 percent on Monday after the company denied it was investing in the project.

MORE FROM ARABIANBUSINESS.COM