Tuesday, May 22, 2012
DUBAI (Zawya Dow Jones)--Dubai Duty Free, the state-owned company that operates tax-free shops at the Dubai International Airport, is raising $1.5 billion in loans, more than previously planned after receiving strong interest from the banks, to fund its expansion at the global air transport hub, a senior executive said Tuesday.
DDF last month announced its intension to borrow $1.1 billion to fund its expansion plans.
"At first we started at $1.1 billion that we wanted to raise to spend on airport development and we did it jointly with Investment Corporation of Dubai, we presented it to the banks and got a fantastic response and we raised [it to] $1.5 billion," Colm McLoughlin, vice chairman at DDF, told reporters on the sidelines of an industry event here.
"There are four banks in Dubai and two banks in Abu Dhabi and we have commitments from other banks. We will raise money in the future but not for some years. So far I think the $1.5 billion is enough," he added.
DDF is fully owned by the Investment Corporation of Dubai, the Dubai government's main investment arm.
In April, the company said it mandated Citibank, Dubai Islamic Bank, Emirates NBD Capital and HSBC Bank Middle East to arrange and coordinate the company's first international financing transaction. Abu Dhabi Commercial Bank made an early commitment to the facilities and is a mandated lead arranger and bookrunner, DDF said at the time.
The purpose of the deal was to "optimize DDF's capital structure in order to support the further development at Dubai International Airport," the company said last month, adding the financing consists of a conventional term loan and Islamic facilities but didn't elaborate on how those tranches would be divided.
DDF currently has about 18,000 square meters of retail space and 4,000 staff. It processes an average of 61,400 transactions per day. Revenues at the company reached $1.45 billion last year. McLoughlin expects DDF sales to be about $1.63 billion in 2012.
DDF claims to be the biggest airport retailer in the world, accounting for 5% of airport shop sales.
-By Leila Hatoum, Dow Jones Newswires; +971-4-446-1686; leila.hatoum@dowjones.com; Twitter: @ZDJnews
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
22-05-12 0919GMT
