Sunday 16 January 2011

MIDEAST STOCKS-Dilution, valuation fears send Aldar to 5-mth low | News by Country | Reuters

Abu Dhabi's Aldar Properties (ALDR.AD: Quote) tumbled to a five-month low on Sunday after the indebted developer said it planned to take $2.9 billion in impairments and issue a $760 million convertible bond.

These are part of a restructuring plan for the state-linked firm, which has made losses for four straight quarters and faces an estimated $3 billion funding gap in 2011. Abu Dhabi's government will pay Aldar $4.5 billion for various assets. [ID:nLDE70F01C]

'Equity holders suffer immediate equity impairment and future dilution, but solvency is now assured,' Nomura wrote in a research note. 'The stock now looks expensive relative to its peers and that will likely take some time to correct.'


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