MIDEAST STOCKS-Abu Dhabi's Aldar slides after record loss

Wed Feb 9, 2011 2:13pm GMT

By Matt Smith

DUBAI Feb 9 (Reuters) - Shares in Abu Dhabi's Aldar Properties (ALDR.AD: Quote) slid on Wednesday after the indebted developer reported a record quarterly loss.

Trading in Middle East markets slumped, with little reason for traders to open new positions as the weekend neared and regional benchmarks almost unchanged.

Aldar dropped 3.2 percent to 1.82 dirhams after it made a fourth-quarter loss of 11.14 billion dirhams ($3 billion), having taken writedowns of 11.3 billion dirhams in 2010, most of which were booked in the final quarter.

Aldar has made losses for five straight quarters and its shares have fallen 55 percent over the past 12 months. [ID:nLDE70T0AZ]

Aldar announced the writedowns in January as part of a rescue package that includes selling various assets totalling $4.5 billion to Abu Dhabi's government, while state investment vehicle Mubadala will also buy a $763 million) convertible bond.

"The money it will get from the asset sales and convertible bond will be used to repay debt and for development capital expenditure," said Ahmed Badr, Credit Suisse research analyst. "We think the recurring income from investment property won't be enough to derive equity value."

Credit Suisse has an underperform rating on Aldar and a fair value price of 1.59 dirhams.

"We don't see an imminent turnaround in Aldar unless the property market recovers and that seems unlikely," Badr said. "The capital structure of Aldar was significantly over-leveraged and it was then hit by the property downturn."   Continued...

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