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Mon 3 Jun 2013 08:17 AM

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Dubai mall developer delays $500m bond sale

Majid Al Futtaim cites weak market as reason to delay bid to fund buyout of Carrefour JV

Dubai mall developer delays $500m bond sale
MAF aimed to raise at least $500m from a hybrid bond sale to fund its recent buyout of Carrefours stake in a joint venture.

Dubai mall developer Majid Al Futtaim (MAF), has delayed plans to raise at least $500m from a hybrid bond sale to fund its recent buyout of Carrefour's stake in a joint venture.

"There's volatility in the market. We will wait until the pricing improves," Daniele Vecchi, MAF group treasurer, said on Sunday.

He did not specify a timeframe for issuance of the bond.

MAF hired banks to partly finance the $683m acquisition of Carrefour's stake through a hybrid bond, which combines elements of both debt and equity.

Financing an acquisition through the issuance of a hybrid bond would be the first such transaction in the region. So far only banks have tested markets with such structures.

Global credit markets took a battering last week after robust US economic data fanned speculation that the Federal Reserve may soon begin reining in its bond-buying programme.

In an investor presentation seen by Reuters last week, MAF had said that it had enough liquidity on hand to finance the purchase but wanted to issue a hybrid bond to ensure no risk to its credit rating.

Vecchi said the firm will continue to monitor the market and revisit the hybrid sale plan once volatility had subsided.

Family-owned MAF has picked Goldman Sachs and HSBC Holdings as "joint structuring advisers" on the planned sale, together with BofA Merrill Lynch, JP Morgan and Standard Chartered Bank as joint bookrunners.

Unlisted MAF, which reported a 10 percent rise in 2012 revenue to AED21.6bn ($5.9bn), is on an acquisition drive in the region.

Chief Executive Iyad Malas has forecast capital investments of up to $1bn this year, excluding the Carrefour deal.

The company is in talks to purchase the Egyptian supermarket chain Metro and discount grocery store Kheir Zaman, in a deal valued at around $200m. The discussions are ongoing and the deal is expected to be signed this year.

It has also entered discussions to acquire a part of the supermarket franchise Spinneys from private equity firm Abraaj, according to industry sources.

The deal, worth less than $100m, includes Spinneys supermarkets outside of the United Arab Emirates.

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felix 6 years ago

Dubai mall is developed by Emaar and not by MAF. MAF did the City Centers and MoE

HERBET 6 years ago

Felix,

Yes but "mall" does not have a capital m. This clearly refers to Dubai (based) mall developer.

keenobzerver 6 years ago

I agree with Herbert.
AB is referring to (a) Dubai mall. not (The) Dubai Mall.