Dubai: The Dubai Duty Free said it will raise up to Dh4 billion ($1.1 billion) to partly finance the expansion of Dubai International Airport.
It has mandated Citibank, N.A., London Branch, Dubai Islamic Bank PJSC, Emirates NBD Capital Limited and HSBC Bank Middle East Limited and each of their respective affiliates to coordinate the loan facilities. Abu Dhabi Commercial Bank PJSC has pre-committed to the facilities alongside the Coordinators as a Mandated Lead Arranger and Bookrunner.
Colm McLoughlin, Executive Vice-Chairman of Dubai Duty Free, earlier told Gulf News, that his organisation will partly finance the development of a new concourse and terminal, which is part of the Dh28 billion expansion of Dubai International Airport, the world's fourth biggest international passenger hub.
"I am glad to say that Dubai Duty Free and Dubai Airports will mainly finance the development of Concourse 4 at Dubai International Airport," McLoughlin said.
This would be the first major investment by Dubai Duty Free in a large infrastructure project following the construction of its Dh500 million headquarters and central storage at Al Ramool and the new five-star 293-room luxury hotel at the Aviation Club.
Dubai Duty Free is a decree company established in December 1983 as the sole duty free operator at the departure and arrival areas of all terminals at Dubai International Airport.
According to Generation Research, an independent industry specialist, the company has grown to become the largest single airport travel retailer in the world, accounting for 5 per cent of airport shop sales and 3.2 per cent of the wider duty free and retail global business (which includes airports, airlines, ferries, border shops and other outlets) in 2010. For 2011, DDF generated revenues of Dh5.3 billion ($1.45 billion).
DDF will remain as obligor to the funding.
"The facilities will comprise of a conventional term loan facility and Islamic facilities. The purpose of the facilities is to optimise DDF's capital structure in order to support the further development at Dubai International Airport," Dubai Duty Free said in a statement.
Dubai Duty Free is the exclusive operator of retail duty free shops and seller of goods exempt from duty at the airports in Dubai.
The syndication was launched on April 5, with banks invited to commit in US dollars and/or UAE dirhams. Dubai Duty Free will be hosting a management presentation in Dubai during the week commencing April 9.
Dubai Duty Free operates across 18,000 square meters of retail space with approximately 4,000 staff. The company sells to around 47 per cent of all Dubai International Airport passengers and on average, handles 61,400 transactions per day.
In addition to its 89 outlets across the departures and arrivals sections of DIA, through which the company conducts the bulk of its business, Dubai Duty Free also operates "duty paid" kiosk shops in the public areas of Dubai International Airport, Cargo Village, Airport Free Zone, The Aviation Club and also operates an online internet service.
The company also operates foreign exchange bureaus at Dubai International Airport and as part of its Leisure Division will shortly be opening its first standalone hotel at The Aviation Club, with management to be provided by the Jumeirah Group. The Leisure Division also includes the Dubai Tennis Stadium, The Irish Village, and the Century Village group of restaurants.
Given Dubai Duty Free's alignment of strategy and business activities with that of Dubai International Airport, it is maximising its retail business at this major aviation hub.
In 2009, 100 per cent ownership of Dubai Duty Free was transferred to Investment Corporation of Dubai (ICD). ICD is the investment arm of the Government of Dubai, with ownership of the Government of Dubai's portfolio of companies and investments.
