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Tue 2 Nov 2010 04:37 PM

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Aldar of Abu Dhabi falls after CEO Bullough resigns

Shares of Abu Dhabi’s biggest property developer, drop 6.2%, the biggest decline since May 25

Aldar of Abu Dhabi falls after CEO Bullough resigns
Bullough has announced his long-planned retirement from the company, Aldar said on Monday

Aldar
Properties, Abu Dhabi’s biggest property developer, dropped the
most in more than five months after chief executive officer John
Bullough resigned.

The shares fell 6.2 percent, the biggest decline since May 25, to close at AED2.43 at 2 pm in Abu Dhabi. Aldar has plunged 51 percent this year.

“Bullough has announced his long-planned retirement from the company,” Aldar
said in an e-mailed statement on Monday. A replacement will be named
after a board meeting November 8, the company said.

The CEO took the job
two years ago.

Aldar,
which is due to announce third-quarter results next week, posted its
third consecutive loss in July on lower land sales. The developer has
about AED30bn ($8.2bn) of debt, including around AED5bn due in the next 12 months, according to Majed Azzam, a
real-estate analyst at Alembic HC Securities who rates Aldar “overweight.”

“Aldar
has a lot of debt maturing next year and the company is due to announce
something on this before the end of the year,” Azzam said in a phone
interview from Dubai. “The departure of the CEO at this critical time
is being taken as a negative sign by investors.”

The company,
19.2 percent-owned by Abu Dhabi-government backed investor Mubadala
Development Co., had its credit ratings cut by Moody’s Investors
Service and Standard & Poor’s this year on concern over a property
market slump and Aldar’s ability to
meet debt obligations.

Abu Dhabi, the UAE’s richest of
seven sheikhdoms, provided loans to Dubai last year to help
state-related companies.
                   

Bullough was appointed CEO in October 2008 after serving as chief operating officer from 2007. Aldar
hadn’t previously announced his intention to leave, according to a
company spokesman. He joined the developer from the Duke of
Westminster’s Grosvenor Group, where he was retail director for the
U.K. and Ireland.

Aldar
is building thousands of homes, offices and hotels in the United Arab
Emirates’ capital. A Ferrari-branded theme park developed by the
company is set to open on November 4.

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John 9 years ago

Did Bullough retire or resign, there is a huge difference? This story says both. If he is retiring as planned, there should be no obvious ripple effect, but if he resigned or was, indeed, asked to do so, then shareholders have the right to know why.

Red Snappa 9 years ago

Turning 60 is not considered the retirement end the line these day, especially if business is going well and the person in the seat is enjoying themselves. The the overall property development sector across the UAE is suffering from an intense lack of demand which could last for years. At the moment grassroots humanity is trying to save money not invest in a falling market that has not reached its bottom dollar by any means. The population and their general net worth is now a long way off the predicted growth rate.

Perhaps the perspicacious Mr Boullough, an industry veteran, has a view of the corporate future based on present market fundamentals that looks none too rosy for some years to come and has basically seen the writing on the wall rather than wait out a lacklustre 2011. One assumes that he will be replaced by a UAE national.

Kiran 9 years ago

If this was a "long planned retirement" - how come his replacement has not yet been announced?

Kate 9 years ago

@Kiran - that way you get two runs at the news cycle - one to announce his retirement, two to announce his replacement - double press coverage.

@Red Snappa - renewing his residency once past 60 is an issue here - so that might be the reason

Mohammed 9 years ago

I am sure that the local market here has many professionals Arabic CEO to replace him.. Since the Gulf region now can outsource many manager from the Arabic Region.
Thank for him, but the local companies here can survive with local stuff.