Dubai Investments faces exports setback
Dubai, July 18, 2011
Dubai Investments has secured only a quarter so far of the 1.2-billion dirhams ($326.7 million) loan it wanted to raise, its chief executive said, and the conglomerate's manufacturing business faces setbacks due to regional unrest.
Khalid bin Kalban said political unrest in Libya, Syria and Yemen had made normal operations difficult for its manufacturing segment. 'We are facing temporary setbacks in the manufacturing side of business,' Kalban told Reuters.
'We had a good share in markets like Libya, Yemen and Syria but the markets there are going through tough times. We are now engaging in business in other markets like Saudi Arabia and Turkey,' he added.
Dubai's sovereign wealth fund owns an 11.5 percent stake in Dubai Investments. The latter derives most of its revenues from the United Arab Emirates and other Gulf countries and has been making an export push outside the region.
The conglomerate's portfolio includes property assets, a stake in Emirates District Cooling as well as investments in companies such as Glass, Dubai Investments Industries (DII), Gulf Investments Park (DIP) and DI Real Estate Company (DIRC).
In April, the firm said it was in bank talks for a 1.2 billion dirham loan to expand its operations, which was to be finalised by May. The loan was to be used for the expansion of Emirates Float Glass, its glass manufacturing unit in Abu Dhabi and to complete the last phase of its industrial development Dubai Investment Park.
Kalban said in an interview on Sunday that the conglomerate has secured a 300 million dirham loan from Dubai Islamic Bank at 350 basis points over the London Interbank Offered Rate (Libor).
He added that the company is still in talks with Emirates Islamic Bank, a unit of Emirates NBD , and HSBC Bank for another 300 million dirhams.
'The remaining 600 million dirhams we are hoping will be secured from Europe,' said Kalban. 'We have presented term sheets to banks and are waiting for a response.'
He declined to say which European banks were approached. Kalban said plans to sell 30 percent of its private equity unit Masharie through an initial public offering have also been put off for at least two months. The long-planned IPO was slated for mid-2011 but will not be before the end of September. - Reuters