Business Daily from THE HINDU group of publications
Saturday, Nov 28, 2009
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Business Daily from THE HINDU group of publications Saturday, Nov 28, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Corporate
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Outlook Markets - IPOs
Our Bureaus New Delhi/Mumbai, Nov. 27 Real estate firm Emaar MGF – a joint venture of MGF and UAE's Emaar Properties – said on Friday that the Dubai crisis will have no bearing on the business and funding plans of its India operations. The comment comes at a time when Emaar MGF has filed its preliminary draft prospectus with SEBI for Rs 3,850-crore initial public offer. “Emaar MGF has operations only in India and the developments in Dubai have no impact on Emaar MGF's business or operations. Our business and funding plans are on track,” the company said, indicating that IPO plans are on schedule. It said the recently announced plans in respect of debt of Dubai World has no impact on Emaar Properties' financial position or operations or its ability to meet any obligations. Emaar has a strong balance sheet of about $17 billion and low debt obligation (net debt to net worth of 18 per cent), it said. Share appeal “Significant stable stream of rental revenue, unlevered operating assets and superior cash flows enables Emaar Properties to meet all its obligations. Emaar has not asked for any external support and maintains a good financial strength. Emaar Properties remains committed to its investments and Emaar MGF's business in India,” the statement said. However, market pundits said the Dubai financial crisis may have an impact on Emaar MGF's initial public offering. “Emaar MGF will most likely withdraw its IPO. Even if it comes out with the IPO, the company will not get the desired pricing and response,” the head of research of a top institutional broking firm said. This will be Emaar MGF's second attempt at the primary market to raise funds, which would be used for debt repayment and prepayment and funding of Emaar MGF Construction (an SPV for executing the Commonwealth Games Village project). The size of the public offer is substantially lower than what the company had intended to raise in February 2008 when it announced plans for a Rs 7,072-crore public issue. However, it had been forced to withdraw the IPO due to a sudden downturn in the market condition at that time. The IPO was subscribed by 0.39 times only and the company refunded money to the investors. Emaar Properties PJSC, UAE's largest property developer, has been facing troubles back home too. Earlier this week, Dubai's ruler demoted some of the Emirate's most prominent executives. Emaar Chairman Mr Mohammed Ali Alabbar was among officials moved off the board of Dubai's main holding company, Investment Corp. of Dubai. More Stories on : Outlook | Real Estate & Construction | IPOs
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