Saudi's Dar Al Arkan refutes 'crisis' claims

Construction firm hits back after claims appear on website called Dar Al Arkan in Crisis
By Bloomberg
Wed 29 Feb 2012 06:59 PM

Dar Al Arkan Real
Estate Development Co said it’s in compliance with regulatory
requirements and on track to meet payments, including Islamic bonds due
in July.

Saudi
Arabia’s second-biggest property company by market value responded to
questions from Bloomberg News after a website by the name of “Dar Al
Arkan in Crisis” said it had “prepared an archive of information and
evidence which details a series of fraudulent actions, regulatory
breaches and corporate malpractice.”

“We categorically deny that Dar Al-Arkan is facing any sort of crisis,” the developer said.

The yield on
Dar Al-Arkan’s 10.75 percent dollar-denominated Islamic debt due
February 2015 soared 42 basis points, or 0.42 percentage point, the most
since Nov 28, at 5:19pm in Riyadh. The shares declined 2.1 percent,
paring their rise this year to 26 percent.

Dar Al Arkan
plans to repay about SR5bn ($1.3bn) as it sells land
to build cash holdings, Andy Raheja, the company’s chief financial
officer, said in an interview on Feb 15. Fourth-quarter profit beat
analyst estimates even after dropping 12 percent to SR289.6m
because of lower land and apartment sales.

“Our
business is robust and we are on track to repay all debts as they come
due including the upcoming sukuk in July,” Dar Al Arkan said. The
overall intent of the website seems to be to “lead readers to false
conclusions, mixing fact and fiction and to harm Dar Al Arkan by
creating a false image of a company,” it said.

“Dar Al Arkan is seeking legal advice to take action against this website, as it is hosted in Russia,” the company said.

The
developer has SR6.2bn of bonds due until the end of 2015,
according to data compiled by Bloomberg. This includes a $1bn
Islamic bond due in July.

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