Sorouh Real Estate to raise Dh4bn debt this year

Sorouh Real Estate, an ADX-listed property company, may raise debt to the tune of Dh4 billion during the current year. The company, which has an equity base of Dh6.026bn and a debt of Dh2.073bn, has plans to increase the gearing ratio to close 100 per cent, meaning that the debt will be raised to around Dh6bn.

In an e-mailed response to Emirates Business, the Sorouh spokesperson said:"Sorouh expects to increase its gearing closer to 100 per cent but please note that it won't necessarily increase it to 100 per cent."

The spokesperson said the company will raise funding as and when it needs it. "We are talking to banks on our funding needs."

Many companies, including banks, have put on hold their debt issue plans due to unfavourable market conditions. Though Aldar Properties managed to raise funds in mid-2009 through a bond issue, most property firms may rely on bank borrowings in the short term.

While the current gearing ratio of Sorouh is 34.39 per cent, the ratio as of 2008 end was 64.37 per cent when it had a total debt of Dh3.830bn and a total equity of Dh5.949bn.