Deyaar to issue $1.3bn sukuk for expansion plan

EXPANSION PLAN: Deyaar will tap debt markets to fund a massive expansion. (ITP Images)

Dubai-based developer Deyaar will launch a 5 billion dirham ($1.36bn) sukuk (Islamic bond) programme to fund an aggressive local and international expansion, the firm's chairman has revealed.

Nasser Al-Shaikh told Arabian Business the fund-raising is part of a major shift in the developer’s business model towards the development of ‘communities’ instead of towers.

“So far we are not leveraged as a company. Because we went public a year ago and the company’s paid up capital is about 5.77 billion dirhams, we had enough funds for our existing business. However, we are expanding our business locally and internationally and that will require additional funding, so we will be hitting the debt market.

“We do have a sukuk programme that depending on the need, we will either initiate in Q4 2008 or Q1 next year. Over the next six months we are expanding aggressively in the region. Expansion comes with a price tag, for our current sukuk programme, the overall size is 5 billion dirhams and we don’t think we will face any challenges (raising that),” he said.

Al-Shaikh has been chairman of Deyaar since March, and said the financials of the firm remain unaffected by the arrest in April of two Deyaar executives as part of the anti-corruption probe currently sweeping Dubai.

Two Deyaar suppliers have also been detained by the public prosecution as part of the investigation which so far involves Tamweel, Nakheel and Sama Dubai.

Dubai Islamic Bank, which partly owns Deyaar is also part of the investigation.

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