By Bernd Debusmann Jr
Damac chairman Hussain Sajwani is said to be mulling taking the company private
Dubai-based developer Damac Properties has not received any acquisition requests, amid media reports that company chairman Hussain Sajwani is considering taking the company private, it said on Wednesday.
On Tuesday, Reuters reported that Sajwani is considering buying out minority stakeholders and taking the $1.1 billion Dubai-listed company private.
Citing anonymous sources, the report said that Sajwani has been mulling the deal since late last year, after share prices fell over the course of the last two years. He is reportedly in talks to finance the deal.
When contacted by Arabian Business, Niall McLoughlin, Damac’s senior vice president of marketing and corporate communications, said, “We would like to clarify that the company has not received to date any requests from any party that includes the intention of the acquisition.”
Damac, which operates in the UAE, Saudi Arabia, the UK and a number of other markets, has seen share prices fall 80 percent since the beginning of 2018 amid a slump in the emirate’s real estate market.
The company’s shares were first listed on the Dubai stock market in 2015.
In May, the company the company reported a net loss of AED120 million ($32.7m) for the first quarter of 2020, compared to a AED31m ($8.4m) profit for the same period last year, which has been attributed to “non-cash items”.
Sajwani said profits were hit by the provision for impairment on development properties amounting to AED130m ($35.4m), provision for impairment on trade receivables (AED53m - $14.4m) and “loss on fair value” of financial investment (AED14m - $3.8m) “due to prevalent market conditions”.
He has also warned of the inevitable impact of coronavirus on future results. “We have assessed the potential impacts of the outbreak on our operations due to the restrictions placed by various governments to curb the spread of Covid-19. This will likely impact the prices and demand of properties, expected credit loss from trade receivables and contract assets and the fair valuation of financial investment.”