Dubai's JAFZA gets consent to repay US$2 billion sukuk early
Source: BI-ME with Reuters , Author: Posted by BI-ME staff
Posted: Mon May 28, 2012 9:08 am
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UAE. Dubai's Jebel Ali Free Zone (JAFZA) said on Sunday it had received the consent from a majority of sukukholders for early redemption of a US$2 billion-equivalent Islamic bond.

The state-linked industrial free zone, part of a unit owned by Dubai World DBWLD.UL, said a majority representing 89% of certificate holders had voted in favour of the Extraordinary Resolution in a meeting on May 24 in London.

"Accordingly the consent conditions have been satisfied and the Deed of Amendment has been executed," the statement on Nasdaq Dubai said.

In order to change any terms of the certificates, the company was legally bound to seek approval from holders.

Citigroup Inc (C.N), Dubai Islamic Bank DISB.DU and Standard Chartered (STAN.L) were appointed as solicitation agents.

The 3.01%, AED7.5 billion sukuk was originally due in November. The company announced last month it was in advanced talks with financial institutions over a financing package to meet its debt obligation.

Along with a US$1.25 billion sukuk issued by another state-owned entity, DIFC Investments, due in June, the JAFZA redemption was considered crucial to assess the ability of Dubai Inc firms to meet their debt maturities.

In March, Reuters reported the company was preparing a three-pronged approach to the refinancing, consisting of a syndicated loan, another sukuk issue, and partial cash repayment. Asset sales are also an option.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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QATAR. In the end, monetary policy can be powerful in the short-term but is unlikely to change the long-term predicament of the Euro Area. The ECB may succeed in preventing prolonged deflation from taking hold, but this is a not a sufficient condition for sustainable growth.
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INTERNATIONAL. Western politicians wishing to see a genuine resolution of Iran's nuclear crisis must continue with diplomatic efforts to isolate those among the Iranian rulers who wish for the collapse of the negotiations.
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SAUDI ARABIA. Often businesses will seek to explore the market through a partner or a third party with which employees are placed and through which they seek to operate in the Kingdom.
QATAR. In the end, monetary policy can be powerful in the short-term but is unlikely to change the long-term predicament of the Euro Area. The ECB may succeed in preventing prolonged deflation from taking hold, but this is a not a sufficient condition for sustainable growth.
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