Abu Dhabi: The Tourism Development and Investment Corporation (TDIC) is tapping the private equity market for two new projects, including a retail development on Saadiyat Island.

Shaun O'Connor, chief financial officer (CFO) at TDIC, told Gulf News that he had already sourced two-thirds of the capital for a $150 million (Dh550.76 million) Saadiyat Island retail project, which will be built alongside the Louvre and Zayed National Museums.

TDIC is also pursuing an infrastructure development valued at $75 million and has around $50 million soft-circled — meaning investors are interested but have not yet signed up — he said, declining to comment further on the details of either project.

Testing investor appetite

"They're small from a capitalisation point of view, (but) we're really testing the market to see if we have done enough to build projects that make sense to third party equity investors, that they are willing to put their money behind," O'Connor said.

"We're set up as a company that doesn't rely on government funding. We're supposed to be able to operate in capital markets and on our own. This is a great way to test how far we have come."

O'Connor was speaking ahead of the release of TDIC's first-ever financial results, due to be published at the end of March or early April.

He claimed that 2011 had been a "spectacular" year for TDIC and one which was buoyed by the announcement by the Abu Dhabi government that the Louvre, Guggenheim and Zayed National Museums would go ahead.

"If you look at the government projects, I don't worry about funding. The government of Abu Dhabi does not have a capital problem. They have set aside the money to build the three museums," O'Connor said.

"If you look at the rest of the projects, those are the ones we have to look forward on and try and figure out what the capital structure will be. I will close 2011 with something to the tune of Dh2 billion in cash on our balance sheet, which is a pretty good place to be."

Bonds maturing in 2014

TDIC's total debt stands at Dh13 billion at the end of 2011, O'Connor revealed, with $2 billion in bonds due to mature in 2014 and $1.2 billion in bank debt. The CFO did not rule out extending the bonds due in two year's time, but he stressed that the upcoming handover of major projects in 2012 took some pressure off the company.

"We'll be handing over most of our villas in Saadiyat in 2012. We'll be leasing all the apartments at St. Regis and we will start leasing Eastern Mangroves and Saadiyat Beach Apartments, which is going to provide a tremendous cash-flow boost to the company," he said.

"That takes a lot of the pressure of 2014 off the table because of the amount of capital we have coming in. It's a tremendous delivery year for TDIC on projects that provide long-term stable operating cash."

O'Connor also said that the company's long-term outlook had improved, with the expectation that 2011 would mark TDIC's last Ebita (earnings before interest, tax and amortisation) loss.

"I won't guarantee Ebita positive for the next five years, but we are very closer to being Ebita positive already, without sale on properties," he said.

"That is a pretty substantial turnaround for the company in a very short period of time. We had originally projected five years from last year on 2016 to be Ebita neutral to positive, I think we're going to be well ahead of that."

Louvre museum

New tenders for the Louvre Abu Dhabi will be launched before the end of March, Abu Dhabi's Tourism Development and Investment Corporation (TDIC) revealed on Sunday.

Shaun O'Connor, chief financial officer at TDIC, said that the project was at the final stages of design and would be moving forward with tendering before the end of first quarter 2012.

"The three museums are green-lighted, and the government has set aside the funding to build them. We have to finish the design, which is an ongoing project, we then go through the tendering process, get it out onto the market place and issue a series of sub tenders," he said.

Commenting on the cancellation of a tender for the project last year, O'Connor said it was in order for the developer to take advantage of a better economic environment.

"Prices around the world are looking better than they did in 2007 and 2008 when we first went out in the market. (This) will give us the property to get the best price possible for Abu Dhabi and build these museums," he said.