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Mon 5 Oct 2009 01:23 PM

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Mubadala unit eyes debt market to fund mega project

Mudabala Real Estate and Hospitality chief outlines funding plan for Sowwah Square.

Mubadala unit eyes debt market to fund mega project
ISLAND FUNDING: Mubadala will seek

Mudabala Real Estate and Hospitality said on Monday it would raise debt through syndicated loans to fund construction of its multi billion dollar Sowwah Square project in Abu Dhabi.

“We will look at traditional project financing,” said John Thomas, executive director of MREH, while adding that the company would look to fund between 75 percent and 80 percent of construction costs through debt raising.

Located between the shores of the Beach Rotana hotel and Reem Island, Sowwah Island is to be the centre of Abu Dhabi’s new business district and will house the new headquarters of the Abu Dhabi Securities Market and a hospital, the Cleveland Clinic.

“We try to maximise leverage. As a financing strategy for Sowwah Square, we are going to look at a combination of debt and equity,” he added.

MREH, which specialises in large commercial, residential and leisure developments, is a division of Mubadala, the investment company, owned by the Abu Dhabi government.

Its projects also includes Mina Zayed Waterfront in Abu Dhabi.

It also owns a 50 percent stake in luxury hotel operator Viceroy Hotel Group.

Last month Mubadala posted $196.1m profit in the first half of 2009, down 39 percent compared to the same period a year earlier. It put smaller profits down to lower oil prices.

In May Mubadala launched a $1.75bn two tranche bond issue.

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