The chairman of Leighton Holdings, Australia's biggest builder, believes the company should never have gone into a joint venture with Al Habtoor Group in Dubai, having faced severe challenges in the region.
The Habtoor Leighton Group venture was established in 2007, before the global financial crisis took its toll on the UAE's property sector.
"With hindsight, no, we're not happy with [the joint venture]," Stephen Johns, the chairman of Leighton Holdings told The Australian Financial Review. "We should never have gone into it."
Leighton has written down the value of the joint venture sharply. Habtoor Leighton Group, which is based in the UAE, has struggled to collect payments, which resulted in Leighton suffering an A$153.9 million (Dh556.7m) loss in the Middle East and Africa in the six months to the end of December.
"Are we happy where it is post-GFC [global financial crisis] and what's happening in Dubai? No. Are we going to work our way out of it? Certainly we'll give it a very good shot … but it's not going to happen overnight," Mr Johns told the Australian publication.
Habtoor Leighton and Al Habtoor Group declined to comment on the matter. Habtoor Leighton had also requested Dh500 million (US$136.1m) of additional funding, Leighton said in February. It is also expecting to collect only half of its unpaid legacy receivables over the next two years.
"This is what keeps me awake," Hamish Tyrwhitt, the chief executive of Leighton Holdings, said at the time. "Not all of it is in our control." Still, Habtoor Leighton later that month announced it had won a Dh480m deal to build part of the Dh3 billion Jewel of the Creek marina development on Dubai Creek. Habtoor Leighton is hoping it may also be able to generate more business from infrastructure projects in Abu Dhabi and it is diversifying away from Dubai into other emirates, other countries in the region and North Africa.
It is also increasingly focusing on a broader base of projects including civil, rail, water, oil and gas, and services, rather than simply building and property development.
In February, Leighton also revealed it was facing a possible breach of its ethics code surrounding payments connected to work at a project related to oil exports in Iraq.
The possible ethics breach was related to Leighton's subsidiary company, Leighton Offshore, "in connection with work to expand offshore loading facilities for Iraq's crude oil exports", the company said.
rbundhun@thenational.ae
twitter: Follow and share our breaking business news. Follow us
iPad users can follow our twitterfeed via Flipboard - just search for Ind_Insights on the app.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Company: Instabug
Founded: 2013
Based: Egypt, Cairo
Sector: IT
Employees: 100
Stage: Series A
Investors: Flat6Labs, Accel, Y Combinator and angel investors
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
Points about the fast fashion industry Celine Hajjar wants everyone to know
- Fast fashion is responsible for up to 10 per cent of global carbon emissions
- Fast fashion is responsible for 24 per cent of the world's insecticides
- Synthetic fibres that make up the average garment can take hundreds of years to biodegrade
- Fast fashion labour workers make 80 per cent less than the required salary to live
- 27 million fast fashion workers worldwide suffer from work-related illnesses and diseases
- Hundreds of thousands of fast fashion labourers work without rights or protection and 80 per cent of them are women