UAE: Union Properties Shares Plummet 25 Percent in The Past One Month

UAE: Union Properties Shares Plummet 25 Percent in The Past One Month

Published July 16th, 2020 - 09:30 GMT











Highlights





Exchange filings indicate that the company is in the last stage of debt restructuring







Union Properties (UP) shares have fallen 25 per cent in the past one month owing to financial troubles, legal disputes and impact of oversupply in the local property market.

Its share price has lost 25 per cent from Dh0.385 on June 15 to Dh0.285 on July 15. Analysts expect that the outcome of its Dh1.5 billion legal arbitration case and successful debt restructuring of its debt are key for the movement of the company's share price going forward.

"The accumulated loss of the company had crossed billions with write off in the value of the assets. Its financial situation is very precarious. The debt on the balance sheet stands at Dh1.8 billion when compared to cash in hand of Dh260 million. The fundamental reason behind the huge losses was the demand-supply imbalance in the Dubai property market," said Vijay Valecha, chief investment officer at Century Financial.

Even before the outbreak of the Coronavirus pandemic, Union Properties was in deep trouble. For 2019, its revenue declined to Dh423 million from Dh501 million in the previous