Emaar Properties is planning to roll over most of its loans maturing in the current year into long-term project financing deals, according to company sources.
Out of the Dh8.625 billion interest bearing loans and borrowings as of December-end, 2009, more than half of this, at Dh4.5bn, is maturing within 12 months (from December 31, 2009), the remaining being Dh4.125bn.
During the year, Dh1.706bn worth of loans were written down as part of the discontinued operations of the company's US subsidiary – WL Homes that incurred Dh1.761bn loss during 2009 alone. To a query by Emirates Business as to what Emaar is planning to do about the short-term loans [worth Dh4.5bn] maturing during the current year, a company spokesperson said Emaar Properties will seek to convert them into long-term project financing in the next year.
"Emaar's debt position is very comfortable and the company has one of the lowest debt-to-equity ratios. The loans maturing in the next one year are primarily bridge loans for Emaar's international projects, which will be converted into longer term project financing in the next one year," the spokesperson responded in an e-mail.
However, he/she has not given any details on how the project financing will be done or whether this will have any equity component. While the company has a total equity of Dh28.829bn, the total loans and borrowings are to the tune of Dh8.625bn and total assets are valued at Dh64.144bn as of December-end last year.