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UAE's Union Properties in final stages of Emicool stake sale

Emicool, jointly formed in 2003 by Union Properties and Dubai Investments, will be sold as the Motor City developer looks to diversify and expand its operations

UAE developer UP has announced plans to sell its stake in Emicool, a district cooling service provider [image: emicool.net].
UAE developer UP has announced plans to sell its stake in Emicool, a district cooling service provider [image: emicool.net].

UAE-headquartered real estate developer, Union Properties (UP), announced it would sell its stake in Emirates District Cooling (Emicool), a district cooling service provider. 

UP, the master developer of Dubai Motor City, confirmed that it was in the final stages of selling all of its stake in Emicool, for which it had received "several offers" from UAE-based companies. 

READ: UP downsizes contracting unit to 'closure level'

In a statement, UP revealed that it was finalising the legal formalities associated with the sale, and that it would announce the buyer shortly. 

Emicool was jointly formed in 2003 by UP and Dubai Investments, with its services delivered to Dubai neighbourhoods such as Motor City, Mirdiff Hills, and Sports City. 

The sale of Emicool's stake comes as UP works to diversify its operations and expand into new markets. 

"The sale of UP’s stake in Emicool is another important milestone for us, and will contribute to our new strategy to enhance our investments, diversify our revenue streams, expand our business, and venture into new markets," Ahmed Yousef Khouri, group chief executive officer of UP, said. 

READ: UP to IPO FM subsidiary ServeU in 2018

"UP will be focussing on developing its business further in other key sectors, and we are confident Emicool will continue its successful journey in the future." 

Emicool's future plans include the expansion of its operational capacity to 500,000 tonnes. 

Upon completion, Emicool's sale would mark the latest in a series of efforts announced by UP to consolidate its activities and prioritise its core operations. 

Last month, UP revealed plans to raise capital through an initial public offering (IPO) for its facilities management (FM) subsidiary, ServeU.

READ: UAE's Union Properties to launch maiden Abu Dhabi project

The group will list ServeU's shares on Dubai Financial Market (DFM) in H2 2018, and invest the proceeds from the IPO to enhance its operations and develop its investment portfolio.

Commenting on the decision, Khouri said: "ServeU is one of UP's leading companies and it occupies a very prominent position in the FM sector.

"We believe that ServeU is ready to be publicly listed at a time when UP is heading towards a new era of growth and expansion." 

READ: Mall, hospitality subsidiaries formed by UP

In November 2017, UP announced that it would downsize its contracting business "to a closure level". 

Thermo LLC is a subsidiary of the Dubai-listed developer that provides mechanical, electrical, and plumbing (MEP) services. 

In its financial statement for Q3 2017, UP said that Thermo "faced significant issues, and is still facing them through [its] current business of MEP work". 

UP added that the group recorded "significant provisions" on the MEP company's contracts, but the company's board of directors "decided to downsize Thermo [...] to a closure level". 

The statement continued: "As claims which were not recognised in the books are still arising, the [board...] continues to review and assess the risk associated with the group's contracting business.

"Accordingly, based on the historical claims arising, management [has] recorded provisions [...] against [Thermo's] work in progress, and on certain contract and retention receivables." 


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Construction Week - Issue 733
Mar 14, 2019