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Al Mazaya eyes full takeover of First Dubai

Kuwait, May 13, 2009

Kuwait's Al Mazaya Holding is considering buying the remaining 33-per cent share in its First Dubai Real Estate Development subsidiary and has hired a consultant to help it decide on a fair price.

"Al Shall Consulting will do a full analysis of Al Mazaya and First Dubai's situation to see how (beneficial) it is for Al Mazaya to obtain the remaining 33 per cent of the First Dubai shares," Mazaya said in a statement on Wednesday.

"This study (will) cover all assets and liabilities of the two companies, a necessary step to determine a fair price."

It said the study would be completed within two months. Al Mazaya now owns 67 per cent of First Dubai.

Mazaya said in March it was considering consolidation among some of its units to reduce costs and was taking provisions as the global downturn hits the Gulf property market.

The developer has said some of its clients have defaulted on loans forcing the firm to take a series of precautionary measures that could affect earnings.

It reported a decline in 2008 profit to around KD13 million ($44.87 million) from around 24.6 million the previous year. First Dubai made a first-quarter net profit of Dh88.67 million ($24.14 million).

Mazaya said it may increase its capital in order to finance the acquisition of the remaining First Dubai shares.

"The process will also increase Al Mazaya's capital, maximise profits for the shareholders, and increase productivity," Salwa Malhas, executive vice president at Al Mazaya Holding, said.

Al Mazaya Qatar, in which Al Mazaya Holding owns 10 percent, said in August it would launch an initial public offering to double its capital as it looks to benefit from a property shortage in the world's top exporter of liquefied natural gas.

But it later put the plan on hold due to the global crisis. Property prices across the Gulf region are facing downward pressure as a regional economic boom that was fuelled by high oil prices came to an end late last year.-Reuters




Tags: Al Mazaya | takeover | First Dubai Real Estate |

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