Less than three months
after the Ferrari World theme park opened, Aldar
Properties has been forced to unload it onto the state
government of Abu Dhabi as it ditches chunks of its high
profile property portfolio in an effort to raise the
cash it urgently needs to pay down due debts.
Aldar Properties PJSC,
Abu Dhabi's leading property development, investment and
management company has been reeling ever since the onset
of the global financial crisis laid bare a glittering real estate
empire that was built on sand, and the instant slowdown in demand
for property in the Gulf left its operations in deep
trouble.
Aldar has been attempting to restructure
itself ever since and with payments due imminently on around US$3 billion it
has been forced to part with some of its prized assets
in an effort to raise the nessecary cash and avoid the
humiliation of defaulting.
Following a board meeting
at the end of last week Aldar
announced that it had recognised
an "approximately AED 10.5 billion (US$2.86 billion)
impairment charge relating to the value of assets".
Into the void has come the government of Abu Dhabi which
will take over the Ferrari World theme park and much of
the other infrastructure assets belonging to Aldar in
the much vaunted Yas Island development zone which is
stuttering as construction dries up. "Reimbursement and
sales totalling AED 10.9 billion (US$2.97 billion) for
the transfer of certain infrastructure assets on Yas
Island including the recently opened Ferrari World Abu
Dhabi theme park, roads, bridges, marine infrastructure
and land," said Aldar in a statement. As well as
ditching the theme park - which was only previewed to
the media at the end of last October - further cash will
be raised through the "sale of residential units and
land for AED 5.5 billion (US$1.49 billion) to the
Government of Abu Dhabi."
Abu
Dhabi's state investment company, Mubadala, will also
buy a convertible bond worth AED 2.8 billion (US$760
million) from Aldar. In a gloomy prognosis U.S.
investment bank Merrill Lynch recently stated that Aldar
would need around AED 10 billion this year just to
"survive" and the drastic measures taken to unload its
prized Yas Marinas assets should keep the company from
defaulting for the time being.
"The
financial framework approved by the board, including the
convertible bond issue, will strengthen our capital
structure and provide us with a stable and sustainable
platform from which we can continue to capture
commercial opportunities to deliver value to
shareholders." said Ahmed Al Sayegh, Chairman of Aldar.
"The impairment recognition reflects the adverse
conditions that have affected the real estate market,
but is an important step in allowing Aldar to achieve
long-term sustainable growth."
Aldar's diverse portfolio currently includes commercial
developments such as Central Market, Al Raha Beach, Yas
Island (including the Yas Mall and Yas Hotel), HQ, and
Al Bateen Park, and government projects such as the Al
Falah Emirati housing project.
ItaliaspeedTV
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Ferrari World Abu Dhabi Media
Preview (10/2010)
