Dubai Duty Free raises loan to $1.5b

Mumbai : Airport retailer Dubai Duty Free has increased the size of a multi-tranche loan facility it is currently raising to $1.5 billion (Dh5.5 billion), driven by high interest from local and international lenders, a senior Dubai government official said yesterday.

"We are raising $1.5 billion and we are getting almost close to double that in terms of interest but hasn't been concluded yet," Mohammad Al Shaibani, the chief executive officer of Investment Corporation of Dubai (ICD), said in an interview.

"There is an opportunity and commercial banks know exactly what to go for," Al Shaibani added.

Multi-tranche facility

Dubai Duty Free had said in April it mandated banks for a $1.1 billion financing facility to help fund an expansion at Dubai International Airport. The facility includes Islamic and conventional tranches.

Citibank along with Dubai Islamic Bank, HSBC and Emirates NBD have been hired to arrange and coordinate the debut international transaction.

Abu Dhabi Commercial Bank has committed to contribute to the loan, but will not be involved in arranging it.

Expanding infrastructure

Dubai has been examining ways of raising finances to expand its existing aviation infrastructure. The government raised a $1.25 billion earlier this month through an Islamic bond.

Al Shaibani also said that DIFC Investments and Jebel Ali Free Zone, which have $3.25 billion of debt maturing before the end of this year, may sell some of their "strategic assets" to other state-owned entities instead to other investors. "Most of these entities are asset-rich, but we are also very cautious not to divest some of these assets below value. If they need to, most likely, we will use or have some other government entities who are liquid or cash-rich to be able to acquire some of these assets instead of selling them cheap to somebody else."

ICD, which has invested in some Indian firms including the mobile towers arm of top carrier Bharti Airtel, will continue to explore opportunities in sectors like infrastructure and logistics in India but there some roadblocks, Al Shaibani said.

"For us to tap further investments, we need to have more clarity in terms of policies and we need to have hopefully some kind of stable outlook for the rupee and some of the taxation issues that keep coming out."