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Tue 11 Oct 2011 10:18 AM

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Dubai's MAF eyes expansion into Iraq, Lebanon

Carrefour franchisee plans to set up sukuk as market turmoil thwarts conventional issue

Dubai's MAF eyes expansion into Iraq, Lebanon
Majid Al Futtaim Properties is the developer behind three of Dubais largest malls

Dubai's Majid Al Futtaim Holding, sole franchisee of
hypermarket chain Carrefour in the Gulf, is to set up a sukuk programme as
market volatility continues to thwart its plans for a conventional issue, an executive
told reporters today.

MAF completed roadshows for an offering from its $2bn medium
term notes programme in June but chose not to issue a bond because of unfavourable
market conditions.

"The next building block is to add a sukuk programme,
the sukuk market is more stable," Daniele Vecchi, senior vice president,
group treasury, at MAF, said on the sidelines of an Islamic finance conference.

"We will start working on it fairly soon," he
added.

Vecchi also confirmed the company still planned to tap the
conventional market when conditions permitted.

"We are ready if the market is ready. Right now the
liquidity position of the company is strong and there's no pressure to issue
bonds. Markets are still volatile."

MAF raised a $1bn loan in July to help repay debt and
provide the company with additional funds after its bond issue was abandoned.

MAF is planning to expand its Carrefour franchise to Iraq
and Lebanon in the next year, taking the total number of MENA states in which
it operates to 13.

"We are planning Carrefour openings in northern Iraq
this year and Lebanon next year," Vecchi said.

However, MAF's development activity in Syria and Egypt had
been curtailed by the political unrest in the two countries this year.

"The country is recovering but not fully
recovered," Vecchi said of Egypt. "Business is quite strong and we
are assessing our options."

In a supplement to its MTN programme, filed on 29 Sept with
the London Stock Exchange, MAF said that it had slowed down the pace of
investment in both countries during 2011.

"The progress of these projects will be determined on
the basis of political developments as well as on the basis of the projects'
ability to meet the Group's own risk management policy and investment
criteria," it said.

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