Dubai Investments pursues loan, sukuk

DUBAI – Dubai Investments said it may secure a $180 million loan next week from Italian export credit agency SACE and that it plans to sell Islamic bonds.
The Dubai-based company with stakes in 40 businesses from real estate to glass production will use loan proceeds to fund a second production line at its Emirates Float Glass factory in Abu Dhabi, said chief executive officer Khalid bin Kalban. It also plans to sell bonds this year to raise Dh1 billion ($272 million), he said.

“The company will continue to benefit from an improvement in Dubai’s economy,” Samer Mardini, Dubai-based vice-president of fixed-income and Islamic finance products at SJS Markets, said by e-mail. The yield on Dubai’s 5.591 per cent dollar-denominated bonds due June 2021 have tumbled 74 basis points, or 0.74 percentage point, this year to 5.24 per cent on Thursday.

That outpaced a 14 basis-point decline to 4.77 per cent in the HSBC/Nasdaq Dubai Middle East Conventional Sovereign US Dollar Bond Index. Economic growth in the city that’s home to the world’s tallest tower and islands shaped like the fronds of a palm tree is accelerating as developers announce new projects and tourist visits climb. Dubai’s $82 billion economy will grow as much as five per cent in 2012, up from three per cent last year, according to government forecasts.
Dubai Investments posted a six per cent increase in first-quarter profit. Al Arif Contracting, a unit of Dubai Investments ‘ private equity arm Masharie, in April won a Dh176.7 million building contract in Dubai. Masharie’s Emirates Extrusion factory unit said it acquired an aluminum production facility in Dubai. Loan talks “will be concluded by next Thursday and I am positive as there is nothing to forbid it from going through,” bin Kalban said. “I anticipate earnings to grow quarter-on- quarter.”

The company had slowed its divestment plan after 2008 and sold 40 percent of Masharie that year. “Demand is strong, maybe because of the political cloud surrounding the region, people find Dubai and the UAE a stable environment.”

25 May 2012,Zahra Hankir