Senior Sorouh exec says discussions are moving forward in Abu Dhabi real estate merger
A potential merger agreement between Abu Dhabi developers Aldar Properties and Sorouh Real Estate is expected to be announced "within a month," a senior Sorouh executive said on Sunday.
Indebted Aldar and Sorouh said in March they were in talks for a state-backed merger, creating a company with $15bn in assets.
"We are moving (forward) in the process," Sorouh's managing director Abu Bakr Seddiqi al-Khoury told Reuters on the sidelines of a conference.
When asked the time schedule for a potential merger agreement, he said, "within a month."
Aldar, which built Abu Dhabi's Yas Marina Formula One motor racing circuit, has relied heavily on the government over the past two years for funding. Abu Dhabi has spent more than $10bn on the company, equivalent to the amount it deployed to rescue Dubai from a bond default in 2009.
Abu Dhabi's top two developers said in June that due diligence for the merger was underway.
Goldman Sachs and National Bank of Abu Dhabi are advisors to the steering committee overseeing the proposed tie-up. Credit Suisse is advising Aldar while Morgan Stanley will work with Sorouh.
The merger talks between the two firms come as Abu Dhabi's property market continues to face challenges amid a huge supply of high-end homes entering the market this year. Property prices in the emirate are expected to fall another 5 percent in 2012, a Reuters poll in May showed.