Dubai: Sorouh Real Estate PJSC, the Abu Dhabi-based real estate developer announced that it has signed a Dh2.35 billion four-year term loan and revolving credit facility with a consortium of four local banks.
“The facility - a combination of term loan and revolving credit, with both conventional and Islamic tranches - is secured by a portion of Sorouh’s land bank, including Shams Gate, which is part of Shams Abu Dhabi on Al Reem Island,” a company statement said.
The facility was arranged and funded by Abu Dhabi Commercial Bank, First Gulf Bank, National Bank of Abu Dhabi and Noor Islamic Bank.
It will be used for general corporate purposes, including the early redemption of the remaining outstanding balance of the asset backed Sukuk, a security that was issued in 2008.
This remaining balance amounts to approximately Dh400 million, net of the release of the dedicated infrastructure development reserve fund, resulting in incremental funds available to Sorouh of almost Dh2 billion. These funds will be used to finance the construction of Shams Gate and other developments in Abu Dhabi.
In the absence of stronger sales of properties due to dull market situation, developers are trying to secure funding from banks to be able to continue with key projects.
Sorouh’s latest move signifies developers’ increased reliance on bank funding till the market takes off.
Richard Amos, Chief Financial Officer, Sorouh, said: “This facility strengthens our liquidity, extends the Company’s debt maturity profile, and maintains our gearing at a comfortable level. The additional funds will be used to advance our major developments in Abu Dhabi. We are pleased to have such a strong group of local banks participating in this facility.”
