By Shane McGinley
Luxury operator Jumeirah Group said the unsecured syndicated loan due in 2019 to help fund its wider expansion plans
Dubai's Jumeirah Group, the luxury hotel company which operates the iconic Burj al Arab hotel, has raised a $1.4 billion unsecured syndicated loan due in 2019 to help fund its expansion, the company said on Wednesday.
The loan was priced at 2.75 percent above the London Interbank Offered Rate and lead-arranged by Abu Dhabi Commercial Bank, Dubai Islamic Bank, Emirates NBD, HSBC, Mashreq and Standard Chartered. Jumeirah was advised on the deal by Rothschild, Reuters said.
Jumeirah Group is part of Dubai Holding Commercial Operations Group (DHCOG), which is the main unit of Dubai Holding, an investment vehicle owned by Sheikh Mohammed Bin Rashid Al Maktoum. Jumeirah will use part of the loan for the general corporate purposes of the DHCOG, it said.
In April, DHCOG reported more than a sixfold increase in its 2012 net profit on the back of lower costs, an increase in revenue and decline in expenses. DHCOG said net profit last year surged to AED1.2b (US$327m) from a profit of AED204m in 2011, according to an emailed statement. Revenues increased 4.5 percent to AED9.2bn in the period from AED 8.8bn. Debt fell by AED1.1bn to AED 11.7bn, with current liabilities declining by about 20 percent, the company said.
"Our turnaround strategy has made considerable strides in 2012 and our businesses across the commercial operations group are increasingly well positioned," DHCOG chairman Mohammad Al Gergawi said. "This, together with the strengthening of Dubai as the region’s financial, business and tourism hub, gives me confidence that we are set for the next phase of future growth.”
Besides Jumeirah Group, other DHCOG units include TECOM Investments and Dubai Properties Group.
Jumeirah currently operates 20 luxury hotels and serviced apartments, including ten in the UAE, seven in Europe, two in the Maldives and one in China. A further 15 hotels are currently under development and the company plans to have more than 30 hotels under operation within the next four years.