We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Mon 18 Apr 2011 03:56 PM

Font Size

- Aa +

Dubai's JAFZA '10 profit halves; bond to be refinanced

Jebel Ali Free Zone makes profit of AED139.7m ($38.04m) in 2010, versus AED286.7m in previous year

Dubai's JAFZA '10 profit halves; bond to be refinanced
Full-year profit at Jebel Ali Free Zone (JAFZA), a unit of state-owned conglomerate Dubai World more than halved (Getty Images)

Full-year profit at Jebel Ali

Free Zone (JAFZA), a unit of state-owned conglomerate Dubai

World more than halved, and the firm said it was

eyeing options to refinance an Islamic bond due in 2012.

In a statement accompanying its financial results, JAFZA's

chairman said the company was considering refinancing options

for its AED7.5bn ($2.04bn) Islamic bond, or

sukuk, its only outstanding debt.

"The establishment commenced work on the liability

management and is currently exploring various refinancing

options," Chairman Hisham Abdullah Al Shirawi said in a

statement, referring to the sukuk.

The dirham-denominated sukuk is not guaranteed by the

government of Dubai and bondholders are predominately local

banks.

The free zone, located on the outskirts of Dubai along the

main highway which connects the city with neighbouring Abu

Dhabi, is owned by Dubai World, which earlier this year

finalised an agreement with its lenders to restructure some $25

billion in debt.

Part of the agreement includes asset sales.

JAFZA made a profit of AED139.7m ($38.04m) in 2010, its financial statements showed, compared with

AED286.7m in the previous year.

Impairments of investment properties hit AED198.3m, weighing on profitability, against AED28.4m in 2009, the statement said.

Total impairments stood at AED247m.

The need to refinance debts among Dubai's state-linked

entities is expected with upcoming maturities totalling about

$30bn to 2012.

The emirate overstretched itself building palm-shaped

islands and other large-scale projects financed with short-term

loans.

But recent political instability across the region and

returning investor confidence in Dubai has attracted buyers into

Dubai bonds.

Yields on Dubai names, including the Jafza sukuk, have

narrowed in the last few weeks, with growing buying interest in

the bond. One Dubai-based fixed income trader said the market

has already priced in the refinancing of the sukuk.

Arabian Business digital magazine: read the latest edition online