Barwa to raise $800mn Islamic loan

by Reuters Wednesday, 24 October 2007

Qatar's Barwa Real Estate is raising an $800 million Islamic loan to fund general corporate activities, a banker familiar with the deal told Reuters.

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The one-year loan was structured as a murabaha facility, said the source, who declined to be identified.
In August, Barwa took a $600 million Islamic loan arranged by Bahrain's Gulf International Bank to fund real estate projects. The source said the latest $800 million loan was in addition to its previous borrowing.

Islam bans lending on interest, and in a murabaha deal a lender buys a commodity and sells it to customer at a higher price, locking in profit.

Government-owned Qatari Diar Real Estate & Investment Co, which bought the Chelsea Barracks in London last April, owns 45% of Barwa.

In October, Barwa agreed to buy and refurbish the Royal Monceau hotel in Paris. In June, it said it was considering investing in Sudan as part of a strategy to expand abroad.

It also announced plans to launch a bank by the first quarter of 2008 to tap growth in the Gulf Arab country's property and construction sector.

Barwa officials were not immediately available for comment.



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