Aldar recovers after Moody’s upgrade review

Moody’s have said it placed Aldar Properties under review for an upgrade after a merger agreement with Sorouh Real Estate. (Reuters)

Abu Dhabi’s real estate firms rise in early trade after Moody’s said it placed Aldar Properties under review for an upgrade after a merger agreement with Sorouh Real Estate.

Shares in Aldar gain 2.2 percent, up from Tuesday’s near-three-week low. Aldar shares tumbled in the two previous sessions after a share swap ratio, part of the merger deal with Sorouh, was seen by most analysts as unfavorable for Aldar shareholders.

Once the merger is approved by shareholders, Sorouh will delist from the market and shareholders will be paid 1.288 Aldar shares for every Sorouh share.

Sorouh also gains, up 3.6 percent.

“The decision to place the ratings on review for upgrade reflects our assessment that the Aldar-Sorouh merger will be credit positive with the combined group having a stronger and more conservatively positioned financial profile than the current B2 rating suggests,” Moody’s said in a report.

“Aldar is expected to benefit from Sorouh’s lower balance sheet leverage and going forward will be able to gain from a stronger market position as well as cost synergies.”

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Last Update: Sunday, 31 March 2013 KSA 16:10 - GMT 13:10
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