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23 February 2024

Union Properties to sell stake in Emicool to raise up to Dh700m

DIFC has not confirmed or cancelled its deal for buying space in Union Properties' Index tower for Dh1.8bn. (SUPPLIED)

By Parag Deulgaonkar

Union Properties is seeking to offload its 50 per cent stake in district-cooling company Emicool to raise between Dh500 million and Dh700m, a senior executive said yesterday.

"We are looking to raise cash by selling stake in our non-core units, which will help us meet our cash requirement. We expect to close one large and one small deal this year," CFO Zaid Ghoul told investors on a conference call.

The other partner in Emicool, Dubai Investments, would be willing to buy out Union Properties' stake if the "price is right", Chief Executive Khalid Kalban told Emirates Business.

According to Ghoul, the developer is reconsidering its decision to sell a stake in Thermo, a mechanical, electrical and plumbing unit it wholly owns, but has not put on hold its plans to take it public.

Union Properties needs Dh2.5bn in cash to meet the financial requirements for 2009, Ghoul said.

It plans to make a provision of Dh350m to Dh400m to meet any potential defaults this year.

It took a provisioning of Dh500m on its contracting business in the fourth quarter of 2008.

"This Dh350m to Dh400m cushion will have no impact on our cash flow. It is a provision to face any potential defaults," the CFO said.

Union Properties is also working with financial institutions on finalising a Dh2.5bn non-convertible bond issue, which was approved by its board in last month.

"About Dh1.5bn of it was to be diverted for construction of the F1-X theme park and the remaining Dh1bn for other projects.

"As soon as we get the funding, we will go ahead with the construction of the park," Ghoul said.

The company has now postponed the opening of the theme park to 2010.

Index deal

Dubai International Financial Centre has not confirmed or cancelled its deal for buying space in Union Properties' Index tower for Dh1.8 billion, Ghoul said.

"Although [DIFC] has not cancelled or confirmed their plans, we are still in discussions with them," he said.

The firm will start delivering units between now and

end-September in the MotorCity development followed by units in Limestone House and Index, which are both in DIFC.

About 3,500 units will be delivered this year, he said.