Rakia looking to raise $1.8bn to fund projects

The Ras Al Khaimah Investment Authority (Rakia) said on Wednesday it would raise at least $1.8 billion in bonds and loans this year to build islands off the UAE coast and an aluminium plant in India.

Rakia, which manages funds of Ras Al Khaimah's government, would raise some of the money in accordance with Islamic law, which bans lending on interest, Chief Executive Khater Massaad told Reuters.

Rakia is talking to banks for a loan to finance a $2 billion aluminium smelter and alumina refinery in the Indian state of Andhra Pradesh, Massaad said.

Ras Al Khaimah and Andhra Pradesh agreed in February to build the plant. Massaad said the first stage of the project would have the capacity to produce 1.5 million tonnes of alumina and 300,000 tonnes of aluminium a year.

"We are talking to several big international banks to underwrite the deal," Massaad said, declining to name the lenders.

The loan would be at least $1.4 billion and may comply with Islamic law. Syndication would begin after feasibility studies on the project are completed next month, he said.

Rakia will also begin a roadshow next month to sell at least $400 million of Islamic bonds to finance Al Marjan Island, a $1.8 billion develelopments of five man-made islands off the coast of Ras Al Khaimah, Massaad said.

Rakia will sell the debut senior US dollar Islamic bonds in November, banks managing the sale said in a statement last month. Credit Suisse, HSBC and NBD Investment Bank are bookrunners for the benchmark sale.

Rakia is not rated, and the bonds will be guaranteed by the government of Ras Al Khaimah, the banks said at the time.

Sukuk are typically based on assets that pay a dividend or rent to bondholders rather than interest, which Islam equates with usury.

The five man-made islands of Al-Marjan in the Gulf will cover four square kilometres with hotels and houses.

The project is one of several by Rakia's property developer Rakeen. Set up in December, the firm is also working on projects in Italy, India and Ukraine, according to its website. - Reuters

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM