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Tue 12 Aug 2008 10:50 PM

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Dubai's Union Properties seeks $1bn for projects

Emirates NBD affiliate open to either conventional or Islamic financing, says CFO.

Dubai-listed Union Properties plans to borrow $1 billion by the end of the year to help finance projects, the company's chief financial officer said.

Dubai's second-largest developer by market value is in talks with local and international banks, including Emirates NBD, to arrange the loan. Emirates NBD holds a 48 percent stake in Union Properties.

"We are in discussions with foreign and local banks," Zaid Ghoul told newswire Reuters late on Monday, adding that the deal would be a single transaction.

"It will probably be $1 billion towards the end of the year." He declined to give further details.

In June, Ghoul said the company would borrow at least 2.5 billion dirhams ($680.6 million) this year and an additional 1.5 billion dirhams either this year or next depending on banks' recommendations, adding that it was open to both conventional and Islamic borrowing options.

Union Properties second-quarter net profit surged 106 percent to 317.7 million dirhams ($86.52 million), beating analysts' forecasts.

The company, which is planning to double its land holdings in Dubai over the next two years, is in talks with the government over a joint venture to be announced soon and is looking to develop its leisure projects in Oman.

Shares of Union Properties were down 0.66 percent at 0727 GMT, having fallen more than 15 percent so far this month. The stock is down 2.44 percent this year. (Reuters)

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