The Board of Directors at Al Mazaya Holding have approved the plan to buy the remaining stake of subsidiaries, First Dubai and Waterfront, 36 percent and 21 percent respectively. Mazaya believes that keeping the current economic conditions in mind, it could be the right time for the company to think of adding to their assets and acquiring additional real estate assets. This low-risk strategy can be achieved through acquiring additional stakes in assets that the company already owns and manages. Eng. Khalid Esbaitah, CEO and managing director of Al Mazaya Holding, said: “Since the start of the economic crisis Al Mazaya have been trying to consolidate their operations. It was the need of the hour for us as a company to invest into new projects, move out from certain other projects and their operational and functional structure needed to be streamlined as well. A part of this overall plan was acquiring the minorities in First Dubai and Waterfront. Last year, when we were considering this deal, we saw that we had a number of other operational priorities relating to our ongoing projects that needed primary focus. The advantages of executing this acquisition at that point in time, as compared to the efforts and costs required did not seem appropriate. However, today after we have achieved our internal targets, we feel we can step right ahead with the acquisition to benefit greatly from it.” He further said “the acquisition will increase mazaya capital and total equity and thus result in increasing the company's capital adequacy, through reducing company's debt to capital ratio and company's debt to equity ratio. Soon, we shall be able to utilize more of common resources in between the three companies and thus reducing the group's overall operating expenses. Although First Dubai and Waterfront assets are resulting in low returns in the short term, we firmly believe that in the long term these assets have the potential for high returns.” Speaking on the payback from this deal for current First Dubai shareholders and Waterfront shareholders, Esbaitah said: “The major benefits are: Mazaya shall have higher potential than First Dubai and Waterfront, in terms of profitability, market price performance and dividends distribution. Other major benefits include share liquidation; since the volume of shares at Mazaya is much higher than the shares of First Dubai, and Waterfront is unlisted. The current shareholders at First Dubai and Waterfront shall continue to benefit from any future potential of these companies.”
