DOHA: Qatar stepped in with QR26bn ($7.1bn) of financial support for its ailing property firm Barwa Real Estate yesterday, buying some key assets to help the company reduce its debt pile.
Qatari Diar, the real estate arm of the state’s sovereign wealth fund, owns 45 percent of Barwa, according to Reuters data and is stepping in after Barwa notched up liabilities of about QR37bn ($10.16bn) at the end of 2012 due to overexpansion.
“The sale proceeds will be directed towards extinguishing the company’s debts, reducing financing costs and improving the company’s financial position,” Barwa said in a bourse statement yesterday.
Qatar, the world’s largest exporter of liquified natural gas, is investing billions of dollars to bolster its infrastructure ahead of hosting the 2022 World Cup.
Last month, Barwa unveiled plans to build a $5.5bn island off the coast of Doha, featuring luxury villas, a water park, and five floating hotels to house soccer fans expected to flock to Qatar for the World Cup in 2022.
At the same time it has been been cutting staff and selling assets to pay down its debts. Last October it announced plans to sell assets worth QR16bn ($4.4bn) in Qatar and Egypt to pay down loans.
Among the assets being sold to Diar will be the Barwa Commercial Avenue, an 8km-long development of road, as well as commercial complexes, showrooms and residential units in Doha. Other assets include Barwa Al Sadd, a project which includes three office towers and a five star hotel and Barwa City projects, a residential project.
Barwa will also sell an undisclosed part of its investment portfolio in the deal which it expects to complete by year-end.
The company has properties in France, Switzerland and Britain, focusing on retail, office, hospitality and residential developments.
The Qatari government has stepped in to assist local companies in the past. In 2008, it bought up the real estate assets on local banks’ balance sheets, in effort to shield them from the global economic crisis.
In UAE, Abu Dhabi developer Aldar Properties was given a $10bn lifeline by the emirate to help it repay a massive debt pile. The firm is merging with local player Sorouh Real Estate in a state-backed deal. Reuters
