Aldar, the Abu Dhabi property developer exploring a merger with Sorouh, plans to tap the debt market this year to finance new projects, its deputy chief executive officer said.
“Our finance team right now is coming up with all the relevant options,” Mohammed Al Mubarak told reporters in Abu Dhabi today when asked about the company’s financing requirements. Bonds and bank loans “are both very sound options. There are very solid options in the market right now.”
Aldar, which is building thousands of homes and offices in Abu Dhabi, received AED36bn (US$9.8bn) in government support last year and sold assets including a Ferrari theme park to the state. The developer struggled to pay its debts after the global credit crisis caused banks to curtail mortgage lending, leading to a more than 50 percent drop in property prices since 2008.
Aldar and Sorouh, Abu Dhabi’s biggest developers, said March 11 they had set up a team to study a possible merger with the “blessing” of Abu Dhabi’s government, which owns stakes in both. The team will present its recommendations to the two companies within the next three months, it said at the time.
The developer said April 17 it raised a AED4bn revolving credit facility from National Bank of Abu Dhabi PJSC to “optimally manage its working capital and liquidity requirements over the next three years.” After the company received the loan, Standard and Poor’s raised Aldar’s credit rating to B+, the fourth-highest non-investment grade, from B with a stable outlook.
“We are going to pay our debts in a timely fashion,” Mubarak said today. The recent loan obtained by the company is an indication that banks are willing to lend to Aldar again, he said.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.