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Emaar Confirms Mulling Fresh Indian IPO.

Summary: DUBAI/NEW DELHI u Emaar Properties confirmed on Sunday that its Indian joint-venture Emaar MGF is pondering a second attempt at going public almost 18 months after abandoning a $1.6 billion initial public offering bid.

A spokeswoman for the Dubai-based property developer said Emaar MGF was evaluating several fund-raising options including an IPO. "Further details will be disclosed as and when these are finalised and available," she said in a statement e-mailed to Khaleej Times .

The statement, which came just days after Emaar reported a Dh.1.29 billion loss in the second-quarter, represented a glimmer of optimism from a company and an industry that are struggling at home with a collapse in demand, a surfeit of supply and a dearth of credit.

Emaar-MGF, a venture with Delhi-based MGF Development Limited, is developing several residential and commercial projects across India, one of the Emaar's key growth markets, the statement said. An Indian TV channel reported on Friday that Emaar's subsidiary was in preliminary talks with an investment bank to raise $800 million by going public.

As Emaar was mulling an Indian share sale, Reuters news agency reported from Saudi Arabia that the company had received a court ruling there that would enable it to appeal within 30 days an unfavorable decision in its $1.2 billion compensation lawsuit with a Saudi firm, Jadawel International.

Quoting Al Riyadh newspaper, Reuters said the Board of Grievances, a Saudi arbitration authority that rules on commercial disputes, gave Emaar and Jadawel the verdict.

"This step gives Emaar and Jadawel 30 days to oppose the ruling," the newspaper was quoted as saying. Emaar has said it would appeal the Saudi court ruling that reversed an earlier judgment in its favour in the lawsuit.

Emaar's aborted its first attempt to raise funds for its Indian joint venture in February 2008, as the IPO could draw only lukewarm interest even after Emaar twice slashed the offer price.

The Emaar spokesperson declined to confirm whether the joint-venture had appointed advisers for the share issue. For the first IPO attempt, Enam Securities and DSP Merrill Lynch advised Emaar MGF as global coordinators. Citigroup Global Markets India, Kotak Mahindra Capital, HSBC Securities and Capital Markets (India), JP Morgan India, Goldman Sachs Securities and ICICI Securities also advised on the issue.

Emaar MGF's potential bid comes against a backdrop of a resurgence on Indian bourses. Along with Emaar MGF, other cash-strapped developers that are expected to tap the Indian capital market this year include Sahara Prime City, Godrej Properties, Lodha Developers, Nitesh Estates and Sriram Properties. According to market research firm Prime Database, five companies have raised Rs 31.6 billion from the capital markets so far this financial year.

An Emaar spokesman told Khaleej Times in Delhi that the Delhi Development Authority, Emaar's partner for building the Commonwealth Games Village in the national capital, had already agreed to acquire 333 apartments at a cost of Rs7 billion, which would help the venture meet its immediate funding needs.

Emaar MGF and the DDA are developing the village, Aa which will house 1,100 apartments in 34 towers and house participants at next year's Commonwealth Games.

The slowdown in the Indian real estate sector had resulted in a cash crunch and delay in executing the project. Environmentalists had also filed a case in the court, challenging the development. The Indian Supreme court, however, recently gave the go-ahead for the project.

On Sunday, Emaar's share price dropped 1.1 per cent to Dh2.71 on the UAE bourses.

AaAaAa issacjohn@khaleejtimes.com

Aa nithin@khaleejtimes.com

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Publication:Khaleej Times (Dubai, United Arab Emirates)
Geographic Code:9INDI
Date:Aug 4, 2009
Words:610
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