Finance

Union Properties issues final notice to former chairman

February 14, 2024, 10:49 AM

Union Properties' projects include Dubai MotorCity

Total due AED620m
Khalifa Al Hammadi ‘continued to default’
UP returned to profit in 2022

Dubai developer Union Properties has issued a final notice to former chairman Khalifa Al Hammadi, his family members and another unnamed person. It accuses them of defaulting on a multi-million dollar settlement agreement.

The settlement deal was announced at the company’s annual general meeting last year and involved payments totalling AED620 million ($163 million).

Under the agreement, which came following extensive investigations into Al Hammadi’s time in charge of UP, AED300 million cash was to be paid in six monthly instalments of AED50 million each. The remaining AED320 million was to be settled a year after the signing of the deal.

“We worked hard to achieve the [settlement] result,” UP’s chief legal officer Fadi Saba said at the time.

However, in a note to the Dubai bourse on Wednesday, the developer said Al Hammadi and the other parties had “continued to default on paying the agreed monthly payments despite being notified several times”.

As a result, UP will “implement all the procedures stipulated in the settlement agreement, including the sale of real estate assets of Mr Khalifa Al Hammadi, his family members and other”, the statement added.

UP has already taken possession of a car owned by Al Hammadi, while Dubai Court of Appeal issued a ruling terminating a sale and purchase agreement on a building owned by UP, which was reached during the former chairman’s time at the helm of the company.

Best known for its Motor City development in Dubai, UP transformed a AED966 million net loss in 2021 to a AED30 million net profit the following year.

The resurgence continued into 2023, with reported profits of AED20 million for the first nine months of the year.

In December, the developer announced it had repaid debts worth up to AED875 million to a “national bank”.