* Bonds converted at 1.75 dirhams/share
* Mubadala to be largest shareholder in merged entity
* Sorouh says working hard to meet EGM quorum on Feb. 21
(Recasts, adds details)
DUBAI, Feb 19 (Reuters) - Abu Dhabi's Aldar Properties
, which plans to merge with smaller rival Sorouh Real
Estate, on Tuesday said its largest shareholder
Mubadala converted bonds in the company to shares, boosting its
capital by nearly 10 percent.
State-owned investment fund Mubadala converted the bonds at
a price of 1.75 dirhams per share, Aldar said in a bourse
statement, resulting in an increase in capital to 4.48 billion
dirhams ($1.22 billion) from 4.085 billion dirhams earlier.
Shares in Aldar, which has been bailed out by the Abu Dhabi
government over the past two years with around $10 billion in
funding, closed at 1.54 dirhams on the Abu Dhabi bourse Monday.
The stock has fallen 5.5 percent since a state-backed merger
with Sorouh was agreed on January 21.
Abu Dhabi's two biggest property firms agreed on an
all-share merger in January, aimed at reviving the emirate's
battered real estate sector, creating a business with $13
billion in assets.
Both companies will hold an extraordinary general meeting of
shareholders to vote on the proposed merger on Feb. 21. The
effective date of the merger has been set for June 30.
However, questions have been raised on the ability of Sorouh
to reach the necessary quorum for approving the merger on Jan.
21.
"We are working hard to encourage all of our 35,000 plus
shareholders to attend the EGM this Thursday either by proxy or
in person. However, it is not unusual for companies to obtain a
quorum only at the second EGM meeting," a Sorouh spokesman said
in an emailed statement late on Monday.
"We remain confident of a successful vote in favour of a
merger as we believe it is in the best interest of all
stakeholders."
The Abu Dhabi government will own a 37-percent stake in the
new firm and will also pay Sorouh 3.2 billion dirhams in
exchange for some infrastructure assets and units in its The
Gate development.
Mubadala will be the single largest shareholder in the
combined entity with a holding of 19.15 percent.
($1 = 3.6730 UAE dirhams)
(Reporting by Dinesh Nair and Praveen Menon; Editing by Matt
Driskill)