Moody's downgrades Dubai Holding amid merger talks
by This email address is being protected from spam bots, you need Javascript enabled to view it on Tuesday, 30 June 2009
Dubai Holding, the state-controlled entity that is in talks to merge with Emaar Properties, was downgraded to A3 BY Moody’s Investors Service on Tuesday.
The company was also placed on review for a possible further downgrade. Emaar’s rating was also placed under review for a possible cut.
"The rating actions reflect Moody's view that - despite the recently announced plans to merge both entities - both companies' business and financial profiles face continued fundamental challenges in the wake of difficult conditions in Dubai's property market," Moody's said.
Analysts on Monday raised doubts over the value of the land owned by the three units of Dubai Holding that developer Emaar is to merge with.
Emaar said the entity resulting from a proposed merger with three units of Dubai Holding, which include developers Sama Dubai, Dubai Properties and Tatweer, will have combined assets worth AED194bn ($52.85bn).
But there is speculation as to what these assets will consist of.
Analysts said they could include a significant land bank, although questions have been raised about how valuable this would be in the wake of the real estate collapse in Dubai.
READERS' COMMENTS
Posted by Punky Brewster, Dubai on Wednesday 1 July 2009 at 07:15 UAE time
AED 194 BILLION...?? Where do they get these numbers from? I'm sure if they go and try selling land, in today's depressed market, they won't even get HALF... so, I think they might as well jump the ship and move on!!
Posted by Ali Saleh, Paris, France on Wednesday 1 July 2009 at 05:27 UAE time
Moody's is still in the Upgrade and Downgrade business after they contributed to the Fiasco in Wall Street, anybody who trust them deserve to be burned.
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