Emaar to split from its Indian JV partner-MGF
India-based real estate company MGF Development Ltd. and Dubai-based real estate developer Emaar properties have announced their division on Wednesday. The process has already started.
Emaar, known for constructing Burj Khalifa, has begun the demerger procedure with its 11-year old Indian joint venture partner, and will finish a decade-long bond with the Indian real estate giant.
“In order to lend greater focus on its Indian operations and for the purpose of developing the potential for further growth and expansion of the business, Emaar properties agreed to take steps for the reorganisation of Emaar MGF Land Ltd. by way of scheme of arrangement (demerger),” Emaar said in its official statement.
“This reorganisation will enable Emaar to implement focused strategy for its real estate business in India and will allow the business to undertake future expansion strategies. It will also enable Emaar to drive the development of ongoing projects in India,” it added.
Emaar-MGF has built the commonwealth village in Delhi.
For the last few years, the joint-venture has faced struggles comprising a failed stock market flotation and delay of various projects.
Earlier in 2007, the two companies had planned to increase almost $1.5 billion. But in February 2008, they had to cancel all the plans due to stock market crash and the global economic crisis.
The project distribution under the two parts may become clear after the separation procedure is completed, and accordingly the fate of home owners will be understood.
Emaar made a foray into India a decade ago with an investment of more than Rs.7,500 crore in Emaar MGF JV to construct shopping centers, homes, and offices. The companies have announced the decision of their separation as they are not interested in joint venture now.
