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Emaar Properties To Split With India JV Partner

The demerger will help Emaar to focus on its realty business in the country and simultaneously help it to undertake expansion strategies in the future

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Dubai based real estate developer Emaar Properties has kickstarted the process to split from with its Indian joint venture partner MGF Development Limited, it announced on Wednesday. The demerger process has already begun which will end a decade-long relationship between the two that was operating under the Emaar MGF joint venture.

Over the last few years, the JV has witnessed a lot of struggles that include a failed stock market flotation and delay of several projects.
During the boom period of 2007, Emaar MGF had planned to hit the capital market to raise about $1.5 billion. However, soon after, it was forced to shelve its plan in February 2008 owing to the stock market crash and the global economic crisis.

As per a statement issued on the bourses, the demerger will help Emaar focus on its realty business in the country and simultaneously help the business to undertake expansion strategies in the future. Besides, it will also help drive its ongoing projects. "

However, it is not clear the time frame required to complete the demerger process. It is understood that going forward, the JV will be split into two parts that will be owned by two partners - Emaar Properties and MGF Development. But, the final allocation of the projects under the two parts will be clear only after the demerger process is completed and accordingly the fate of home owners will be understood.

Emaar forayed into India about a decade back with an investment of over Rs 7,500 crore in Emaar MGF JV to construct homes, offices and shopping centres. As per reports in media, Shravan Gupta, head of MGF Development is planning to move out the country as he is no longer interested to participate in the management of the JV. In fact, this is reportedly one of the key reasons behind the separation.

The Dubai-based builder is known for constricting the world's tallest building in Dubai, the Burj Khalifa.

The real estate sector which has been facing a slowdown in the country is not out of the woods yet. As per rating agency Crisil, in 2015, as many as 25 real estate companies were staring at a debt of Rs 30,000 crore. It was the stagnating collections due to low sales velocity that had resulted in the debt amassed for residential projects by these developers.


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emaar mgf real estate emaar properties