Monday, Mar 26, 2012
--MAF hopes to raise seven-year and ten-year debt, after selling first five-year bond in January
--Revenues in 2011 climbed 10.4% on year
--Wrote down the value of some assets in Bahrain and Egypt as unrest put a damper on commerce
--Committed to about AED500 million in capital expenditures in 2012
--Expects to open 13 new hypermarkets this year, looking at possible mall projects in Abu Dhabi and Riyadh
--MAF in final stages of securing the local-currency equivalent of $500 million in financing for a major mall project in Egypt
By Asa Fitch
Of ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Majid Al Futtaim Holding aims to raise longer-dated debt to finance its ambitious regional growth plans after issuing an inaugural five-year Islamic bond earlier this year, the Dubai-based property, hospitality and retail group's top executive said Monday.
"Our first issue is for five years, and we would hope that over time we will be able to do seven years and ten years," Iyad Malas, the company's chief executive, said at a press conference. "That's really our objective in the long term."
Majid Al Futtaim, or MAF, in January sold $400 million of Islamic bonds that mature in five years. Many companies in the Arab Gulf are looking to raise longer-dated debt in order to streamline their capital structures and manage liquidity more carefully after the global financial crisis.
MAF's debt maturity profile has improved recently to an average of four years, according to a recent report from Fitch Ratings. The company had almost 4 billion U.A.E dirhams ($1.09 billion) of debt maturing or amortizing in the coming two years, Fitch said, and had about AED7.7 billion of liquidity on hand in the form of cash and available lines of credit.
"Post the financial crisis globally, accessing long-term financing from the banking sector has become more difficult and will probably continue going forward to be more difficult," Malas said. "For us we took a strategic decision last year that we wanted to diversify our sources of funding and we wanted at the same time to extend the maturity profile of our debt in line with the nature of our asset base, which is shopping malls, which tend to be a long-term asset."
MAF on Monday said revenues climbed 10.4% last year as its businesses thrived despite political turmoil in the region. Revenues reached AED19.59 billion in 2011, the company said in an emailed statement, up from AED17.74 billion a year earlier.
Earnings before interest, taxes, depreciation and amortization were AED2.81 billion last year, up 18.8% on the year before, the company said.
MAF operates shopping malls in Oman, Egypt and across the U.A.E., including the Mall of the Emirates. It also has a variety of hotels and mixed-use projects in its portfolio, and operates Carrefour hypermarkets in the region.
While the company's businesses booked strong revenues last year, it was forced to write down some of its assets in Bahrain and Egypt as unrest put a damper on commerce. The company took a write-down of about AED300 million on its hotel assets in Bahrain last year, Malas said, and a further AED250 million on assets in Egypt, although overall asset values rose.
Total assets were AED36.1 billion at the end of last year, up 4.5% from the year before.
This year, Malas said MAF had committed to about AED500 million in capital expenditures, but may spend as much as AED3 billion as it develops projects in Fujairah, Beirut, Egypt and elsewhere. The company expects to open 13 new hypermarkets this year, and is looking at possible mall projects in Abu Dhabi and Riyadh, he said.
MAF is also forging ahead this year with a major mall project in Egypt that was postponed last year because of political turmoil and a delay in getting necessary permits. The company is in the final stages of securing the local-currency equivalent of $500 million in financing for the project from Egyptian banks, Malas said, and is hoping to start construction in September.
-By Asa Fitch, Dow Jones Newswires, +971 4 446-1685, asa.fitch@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
26-03-12 1313GMT
