The Dubai Financial Market (DFM)-listed Union Properties has informed the bourse that it has reached a significant milestone in its debt restructuring plan agreed with local banks by paying AED290 million ($78.9 million) to its lenders.
UPP has achieved this by asset sales and cash flow generation in the first quarter of 2024 during which the company successfully closed AED816 million ($222.2 million) of plot sales and utilised the proceeds to make the repayments.
The company also informed DFM that it is on the verge of repaying an additional AED250 million ($68 million) in the second quarter of 2024.
Union Properties embarked on its turnaround strategy in the first quarter of 2022. The restructuring reduces financing costs and deleverages Union Properties’ balance sheet for improved profitability and enhanced cash flow generation.
With a strengthened balance sheet, the company is poised to pursue additional financing for future real estate developments and explore new value-creation opportunities.
Amer Khansaheb, Board Member and Managing Director of Union Properties, commented: “We have witnessed significant improvement on the demand for company-owned plots in Motor City, leading to increased cash flow during the first quarter of 2024.
“This reflects the successful implementation of our turnaround strategy. With a bolstered balance sheet and improved free cash flows, we are now in a strong position to leverage our deep expertise, reputation, and highly sought-after land bank locations to pursue strategic growth opportunities and expand our market presence with confidence and agility.
“This milestone marks a significant achievement after the successful conclusion of our debt restructuring, laying a sturdy foundation for propelling growth and enriching shareholder value.
The strong performance and outlook for the UAE’s real estate market provides significant opportunities for Union Properties, including the potential for new developments.”
As part of its commitment to minimising the accumulated losses, Union Properties and its subsidiaries intensified efforts to restructure the outstanding debt and reduce the finance cost. This includes a strategic asset divestment strategy, initially presented to shareholders in FY2022.
These proceeds furnish the necessary funds to fulfill debt settlement agreements and honour the agreement reached with ‘Dubai Land’ in 2023, which now allows Union Properties to change the original land usage and reallocate the GFA, thereby unlocking the full potential of its land bank in alignment with market demand.
Follow us on
