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Mon 18 Jul 2011 12:30 PM

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Dubai Investments gets quarter of loan, faces setbacks

State-backed firm says Arab Spring unrest has hurt business, delays Masharie IPO

Dubai Investments gets quarter of loan, faces setbacks
Qatari investor stock exchange

Dubai Investments
has secured only a quarter so far of the AED1.2bn ($326.7m) loan it wanted to
raise, its chief executive said, and the conglomerate's manufacturing business
faces setbacks due to regional unrest.

Khalid bin Kalban
said political unrest in Libya, Syria and Yemen had made normal operations
difficult for its manufacturing segment.

"We are facing
temporary setbacks in the manufacturing side of business," said Kalban.

"We had a good
share in markets like Libya, Yemen and Syria but the markets there are going
through tough times. We are now engaging in business in other markets like Saudi
Arabia and Turkey," he added.

Dubai's sovereign
wealth fund owns an 11.5 percent stake in Dubai Investments. The latter derives
most of its revenues from the UAE and other Gulf Arab countries and has been
making an export push outside the region.

The conglomerate's
portfolio includes property assets, a stake in Emirates District Cooling as
well as investments in companies such as Glass, Dubai Investments Industries
(DII), Gulf Investments Park (DIP) and DI Real Estate Company (DIRC).

In April, the firm
said it was in bank talks for a AED1.2bn loan to expand its operations, which
was to be finalised by May. The loan was to be used for the expansion of
Emirates Float Glass, its glass manufacturing unit in Abu Dhabi and to complete
the last phase of its industrial development Dubai Investment Park.

Kalban said in an
interview on Sunday that the conglomerate has secured a AED300m loan from Dubai
Islamic Bank at 350 basis points over the London Interbank Offered Rate
(LIBOR).

UAE mall developer
Majid Al Futtaim is planning to raise a $1bn loan at 275 basis points above
LIBOR.

He added that the
company is still in talks with Emirates Islamic Bank, a unit of Emirates NBD ,
and HSBC Bank for another AED300m.

"The remaining AED600m
we are hoping will be secured from Europe," said Kalban. "We have
presented term sheets to banks and are waiting for a response."

He declined to say
which European banks were approached.

Kalban said plans to
sell 30 percent of its private equity unit Masharie through an initial public
offering have also been put off for at least two months.

The long-planned IPO
was slated for mid-2011 but will not be before the end of September.

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