Dubai's Union Properties expects to sell its Ritz Carlton hotel in the Gulf emirate by the end of July, and will use the cash to finish projects and reduce its debt, its chairman said on Monday.

The company, which has put the hotel on the market for Dh1.6 billion ($435.7 million), has received two offers from investors in Saudi Arabia and the United Arab Emirates, chairman Khalid bin Kalban told Reuters in an interview.

'Now we have two offers very close to our target price,' he said. 'We expect to announce the sale by the end of the month.'

He declined to give the target price for the hotel, which is located at a prime site in the Dubai International Financial Centre (DIFC). The third largest developer in Dubai would be willing to sell any of its projects if it receives a fair price, Kalban said in March as it seeks to reduce its debts.

Union Properties, almost half-owned by the Dubai government, has around 6 billion dirhams in liabilities, Kalban said on Monday.

The developer, which is building a multi-billion dollar MotorCity project in Dubai, has also received interest from an investor in taking a majority ownership of its subsidiary, Emirates District Cooling (Emicool), he said, declining to give further details.

Union Properties and UAE-based conglomerate Dubai Investments both hold 50 per cent stakes in Emicool. Kalban, who is also managing director and chief executive of Dubai Investments, said any decision to sell a majority stake in Emicool would be subject to Dubai Investments' board approval.

He said Union Properties' priority was to finish those of its projects that are close to completion. it plans the handover next month of its Index Tower project, an 80 storey multi-purpose tower, and its Limestone House project in the DIFC during the next couple of months.

The developer would then focus on the completion of two hotels in Dubai - the Marriott Courtyard and Renaissance - which Kalban expects to take 10 to 12 months, after the retendering of building contracts.

Union Properties is aiming to set up a hospitality and leisure division this year to manage its portfolio of five hotels and a suspended Formula One theme park.

'It's still on the table, but there are projects that will give us immediate returns like the hotels,' Kalban said, referring to the theme park.
   
The developer, which was founded in 1987 and sold shares to the public in 1993, would likely be restructured into separate divisions by the end of the year to manage its hospitality and leisure component, its portfolio of small and medium-sized projects and its bigger projects like Index Tower, he said.

Union Properties is also looking to set up a property management unit. The company reported a net profit of Dh50.3 million in the first quarter, returning to profit after three consecutive quarters of losses.

In January, Credit Suisse slashed its price target for the stock to 0.03 dirhams from 0.80 dirhams and said even if Union Properties overcame its liquidity squeeze, there would not be much equity left after meeting its debt obligations.

Union Properties' shares closed 0.3 percent higher at 0.4 dirhams a share earlier on Monday, in line with Dubai's benchmark which also rose 0.3 per cent.-Reuters