Union Properties reaches settlement with ex-chairman

Creative Commons/Anaajibicho

• UP launched claims against Khalifa Al Hammadi in 2021
• $163m to be repaid to developer over next year

Dubai developer Union Properties has settled a long-running dispute with former chairman Khalifa Al Hammadi and members of his family, according to an announcement on the Dubai bourse.

Details of the agreement were not revealed but the posting said it would be “executed once the custodian and escrow agents are appointed”.

UP, one of Dubai’s oldest developers, launched claims against former members of its board of directors in 2021 following investigations by federal authorities into allegations of financial wrongdoing.

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UP’s chief legal officer Fadi Saba said 13 crimes were identified amounting to more than AED600 million ($163 million).

At the company’s annual general meeting in April, shareholders voted to approve a settlement which would see AED620 million repaid to UP over the next year.

Saba said at the time it had taken nine months to reach the deal and revealed the total amount would be paid in two components.

“First, AED300 million cash will be paid in six monthly installments of AED50 million each,” Saba said.

“The remaining amount, which is AED320 million, will be received after one year of signing the agreement.

“We worked hard to achieve the [settlement] result.”

Best known for its Motor City development in Dubai, UP has turned around its fortunes, transforming a AED966 million net loss in 2021 to a AED30 million net profit last year.

The company also saw revenues from customer contracts increase by 5 percent year on year to AED419.2 million in 2022 as its subsidiaries delivered “performance improvements supported by positive momentum in the UAE’s real estate sector”.

During 2022 UP completed AED595 million worth of debt restructuring, marking a milestone by resolving legacy liabilities with the majority of its lenders.

In April the developer’s managing director Amer Khansaheb revealed it is seeking to offload AED1 billion worth of assets in the next two years as part of its ongoing recovery plan.