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Arabtec will not reverse provisions

DUBAI - Dubai builder Arabtec will not reverse provisions in 2011 and has no immediate plans to issue a shelved $150 million convertible bond, its chief financial officer said.

The emirate’s largest builder by market value is looking to eventually more-than-double its workforce to 25,000 in Saudi Arabia as it continues to shift its focus to other markets.

“We had to take provisions as some developers were facing difficulties. Most of these developers are paying us back, but we’re not doing reverse provisions yet,” Ziad Makhzoumi told the Reuters Global Real Estate and Infrastructure Summit in Dubai.

“With the market going the way it is, I think it is prudent to wait until possibly the end of the year,” he said on Monday, adding the builder would unlikely book further provisions this year.

“We have to be conservatively cautious now. There are lots of things that we are hopeful will happen soon, but the timing is not in our hands.” The builder expects to maintain its current backlog of projects worth around Dh15 billion ($4.08 billion) in all of its markets by the end of the year, he said.

“We look to build capacity up to 25,000 eventually.”

Saudi Arabia, the biggest Arab economy, is facing a massive housing problem due to rapid population growth and an inflow of expatriate workers coming to the kingdom which is rolling out a $400 billion infrastructure 
spending plan.