Abu Dhabi announced its biggest ever corporate bailoutout last week, and while it did much to reassure creditors the company will make good on its debts, shareholders and analysts still question its prospects as a growth business. Today, Breakingviews columnist Una Galani makes the important point that even after a massive asset writedown - mandated as part of the bailout - the market still doesn't think Aldar's assets would sell for that:
The company's gross asset value will also fall dramatically to $8.5 billion -- partly because of the sales and partly as a result of a $2.9 billion impairment charge on its remaining assets to reflect falling land values and scrapped projects. The net asset value will be $6.3 billion. With a pro forma market capitalisation of only $2.4 billion, investors clearly don't believe even the reduced book values.
(Aldar's current market cap is about $1.47bn, Galani is factoring in the value of outstanding convertible bonds into the pro forma figure)
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