Dubai/New Delhi: In the backdrop of the debt crisis in the region, Gulf real estate firm Emaar Properties has called off its proposed merger with state-owned Dubai Holding, citing the deal is not “economically viable”.
The move comes in the midst of realty firm Emaar-MGF, the Dubai entity’s joint venture with domestic company MGF Development, preparing an initial public offering (IPO) for over Rs3,800 crore.
Emaar Properties has said the decision to cancel the proposed merger with Dubai Holding was taken after intensive feasibility studies that were undertaken by a group of international experts and economic analysts.
In a statement on late Wednesday, Emaar noted the results of “these studies proved that the proposed consolidation (with Dubai Holding entities) discussed earlier was not economically viable in the current economic climate.”
Last month, Dubai government shocked world markets after the government-owned conglomerate Dubai World sought six more months to repay debts worth $59 billion. The announcement not only dented investors’ confidence but also sparked fears of another financial turmoil.
Emaar Properties is the developer of the world’s tallest building Burj Dubai.