Dubai: The Dubai developer Deyaar will not continue an investment reduction- a proposal it had raised after clocking accumulated losses of Dh1.53 billion by the end of 2019.
Shareholders have now sided with the board of directors’ suggestion that an investment reduction will not be needed after all. The developer, that is adding new phases to its Midtown Dubai development, has not provided any choices so far for the change.
Investment reduction has been a plan that listed companies in the UAE have positioned to take on losses in their books. The previous year, Gulf Pharmaceutical Industries (or Julphar as it’s more known) went through the cycle as a component of a more extensive capital restructures. The Dh503 million capital cut was followed by a Dh500 million rights issue.
It was in February 2020 that Deyaar proposed an investment cut after total losses crossed Dh1.5 billion. For 2020, the developer slipped into losses, of Dh216.9 million, after getting impairment charges.
“Companies usually seek it for ease of business and cleaner records – the accumulated loss situation does not get solved,” said Vijay Valecha, Chief Investment Officer at Century Financial.