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Tue 3 Jun 2014 12:12 PM

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Louvre Abu Dhabi developer secures $2bn new financing

TDIC said new money was to finance conventional bond, sukuk due for payment in second half of 2014

Louvre Abu Dhabi developer secures $2bn new financing
Louvre Abu Dhabi

Abu Dhabi's Tourism Development & Investment Co (TDIC), which reported on Monday that its losses had narrowed in 2013, has secured full financing to repay $2bn in maturing bonds this year, the state-owned firm said.

TDIC, which is building iconic museums such as the Louvre and Guggenheim in Abu Dhabi, has a $1bn conventional bond repayable on July 2 and a $1bn sukuk (Islamic bond) due for payment in October.

"We have completed 100 percent of our refinancing activities to ensure there is no risk to TDIC or our shareholders in regards to maturing debt," TDIC said in a statement to Reuters.

The refinancing has allowed TDIC to extend the duration of its debt considerably while capitalising on financing rates that are near historic lows, it added without giving details.

Many United Arab Emirates firms are refinancing debt to take advantage of a low interest rate environment and an improvement in UAE business confidence since the global credit crisis.

TDIC has secured a loan from a local bank to repay the bond maturing in July, the company's financial report for 2013 said.

The report also said it was in the process of finalising two separate financing agreements in 2014 "aiming to have all documents in execution form in order to comfortably close before the maturity dates of the $1bn sukuk". It did not provide details of the banks or the terms.

TDIC has begun negotiations to sell some of its assets at an agreed price of AED1.24bn ($338m), its report said. The assets include a five-star hotel, residential apartments, villas and a retail district as well as a beach plot on Abu Dhabi's Saadiyat Island.

It took a AED658.4m write-down on the five-star hotel, residential apartments and villas that was booked in 2013.

On Monday TDIC reported a net loss of AED1.13bn for 2013 compared to a loss of AED2.15bn in the previous year.

Depreciation, impairments and amortisation in 2013 totalled AED1.18bn, against AED1.49bn in 2012, it said. Its revenue for 2013 increased to AED3.58bn from AED1.27bn.

Development work-in-progress totalled AED3.67bn, the statement said, while TDIC's total assets grew to AED43.4bn from AED41.4bn.

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