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MAF Holding will set up sukuk programme this year

Group will open a Carrefour hypermarket in northern Iraq soon

Gulf News

Dubai: Majid Al Futtaim (MAF) Holding LLC, sole franchisee of hypermarket chain Carrefour in the Gulf, is planning to set up a sukuk programme this year, Daniele Vecchi, treasurer of MAF Holding, said yesterday.

Speaking to reporters on the sidelines of the International Summit on Islamic Finance, he said the initial work for the sukuk programme is underway. The group already has a $2 billion (Dh7.34 billion) conventional medium-term notes programme.

The new sukuk programme is aimed at raising money through Islamic bond programmes in the future. "We as a group are adequately liquid and are under no compulsion to go for a debt issue in the near future. But the programme is being established to tap the market to meet the future needs when the market conditions are favourable," said Vecchi.

Last July the company raised a $1 billion loan to refinance debt. The financing comprises a three-year revolving facility and a five-year term loan, was oversubscribed. Proceeds were used to refinance a $1 billion syndicated loan maturing in July 2012, as well as to provide extra liquidity for the company.

Commenting on the possibility of the company reviving its conventional bond issuance programme, Vecchi said the market is too volatile at the moment. It is not the right time for MAF Holding to test the market.

"The bond issuance window has to be reopened by sovereign issuers, then government related entities followed by corporate in that order. We will look at the opportunity when it emerges," he said.

Vecchi said the company's projects in Egypt have huge potential and said the group still has some good land banks in the country. "We need to keep our options open on these as the political situation is still very volatile," he said. As far as projects in Syria is concerned he said currently there is a minimum amount of work progressing.

"We are committed to new markets in the region. Soon we will be opening a Carrefour in northern Iraq," Vecchi said.