Union Properties Company recorded a strong performance in terms of cash flows and asset sales during the first quarter of the year 2024. During the aforementioned period, the company was able to sell plots of land worth 816 Million Dirhams, which contributed to using the proceeds from the land sale to pay an amount of 290 Million Dirhams to its creditors, and the company intends to pay… 250 Million Dirhams during the second quarter of 2024, to continue achieving qualitative progress in the debt restructuring plan agreed upon with local banks.
This step constitutes an important step within Union Properties’ strategic recovery plan, which began in the first quarter of 2022 and was strengthened in the last quarter of last year. Debt restructuring allows for debt reduction, lower financing costs, and enhances the company’s profitability and cash flows. Improving the budget also reflects positively on the company’s ability to obtain additional financing for future real estate projects and explore new opportunities to enhance value.
As part of its commitment to reducing cumulative losses, Union Properties and its companies redoubled their efforts to restructure outstanding debts and reduce the cost of financing. These efforts include a strategic asset diversification plan, the beginning of which dates back to fiscal year 2022 when it was presented to shareholders as part of the comprehensive recovery plan.
The proceeds generated from the sale of assets provide the necessary financing to implement debt repayment agreements, and adherence to the agreement reached with “Dubai Land” in the year 2023, which allows Union Properties to modify the original use of the lands and change the total floor area, thus paving the way for achieving optimal use of the land. These lands meet market demand. This strategic step also allows the company to benefit from development opportunities within these major real estate projects during the next five years.
Increase cash flows
Engineer Amer Khansaheb, Member of the Board of Directors and Managing Director of Union Properties, said: “We witnessed a significant improvement in demand for plots of land owned by the company in the Motor City area, which led to an increase in our cash flows during the first quarter of 2024, and this is attributed to the efficient implementation of the strategic recovery plan.” . Strengthening our balance sheet and improving free cash flows gives us greater capabilities to take advantage of our leading expertise, prestigious position, and distinctive land locations, to continue to employ strategic growth opportunities and expand our presence in the market with confidence and flexibility. The successful completion of the debt restructuring process represents an important step in Union Properties’ strategic recovery plan, as it contributes to building a strong foundation that enhances growth and value for shareholders.”
He added: “The strong performance and future expectations of the real estate market in the UAE provide great opportunities for Union Properties, including the possibility of launching new real estate development projects in the near future.”