Lebanon Real Estate: Who Owns Solidere?

Real estate giant Solidere has been experiencing a three-year decline in profits which raised the ire of small shareholders in the company. Al-Akhbar looks at the big fish that call the shots at the company and the size of their stake.

Lebanese real estate developer Solidere’s general assembly held a meeting last Monday and decided to distribute profits to shareholders as follows: 25 cents per share in cash and one share for every 50 shares in kind.

The decision triggered discontent among a wide range of shareholders who see investment in the shares of the company as no longer desirable in foreign markets and as not corresponding with the aspirations of investment funds, after dividends distributed in 2011 fell to $79 million, compared to $125 million in 2010 and $175.2 million in 2009.

This downward spiral of Solidere’s earnings over the past three years is expected to continue in the coming years in light of the data available on the real estate market.

The 28 percent drop in sales in 2011 will continue due to the crisis in Syria and Lebanon, with no imminent solution on the horizon.

The company management in the general assembly made it clear that it has $165 million in liquidity. The liquidity that the company claims to have is equivalent to 30 percent of the short-term debt. That in itself is enough to raise questions, especially since management announced it will finish new projects in 2012 estimated to cost around US$ 205 million – that is, the equivalent of 125 percent of the liquidity.

Where will the discontent of shareholders dissatisfied with company conditions lead? In principle, nowhere.

Solidere’s board of directors was formed from the outset to have the first and last word irrespective of shareholder objections that might arise in the general assembly. The course of last Monday’s general assembly is a model for all the assemblies held by Solidere.

Over the course of 26 years since the company was launched, shareholders have not been able to introduce any changes, however minor, to the decisions of the board of directors, which has always included major shareholders from the company.

These large stakeholders are the ones who receive political and sectarian support, and represent an intersection of interests between certain political figures and leaders.

The small shareholders tend to be those whose property was taken over by the company through the power and influence of Solidere’s founders – in exchange for a handful of stocks.

Some of them have lived on the hope and promises made by those same fat cats, which turned out to be false, while others were skeptical from the beginning. So they came together in the Downtown Rights Holders Committee to struggle against Solidere and those who own and run it.

This raises many questions about the identity of the major shareholders and decision-makers at Solidere. The tables below summarize who the main investors are based on the last verified document from 2011. (The number of shares owned by shareholders may have changed due to the sale and purchase of shares.)

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[1] National Deposit Guarantee Institution

[1] Nasser Chammaa acts upon 6.7 million shares on behalf of their original owners, which include Saad Hariri, Marwan Hamadeh, Nader Hariri, and companies that belong to the same political group.

[2] Fouad al-Khazen has 126,000 shares in his personal capacity and 565,000 on behalf of the Maronite Archdiocese of Beirut, the Estate for the Poor of Saint George Maronite Church, the Maronite Diocese of Antelias, Shammas Economic Foundation, Bank of Industry and Labor, the Financial and Real Estate Company of the Port of Beirut, the Maronite Patriarchate - Ecclesiastical Court, and United Group Holding.

[3] Rafael Sabbagha, a board member of Solidere, has 450,000 shares on behalf of the Estate of the Antiochian Orthodox Charitable Organization, the Antiochian Orthodox Estate, St. George Antiochian Orthodox Church Estate, and the Estate for the Poor of the St. George Antiochian Orthodox Church.

[4] Sarkis Demirjian, also a board member of Solidere, acts upon 303,000 shares mostly on behalf of the Armenian Public Charitable Association, and has 50,000 shares in his personal capacity.

[5] Camille Abou Farhat acts mostly on behalf of the Shouair Order of Basilian Monks.

This article is an edited translation from the Arabic Edition.