Jebel Ali Free Zone, a business park operator in Dubai, will seek approval from holders of its AED7.5bn (US$2bn) Islamic bonds to redeem the trust certificates ahead of their maturity in November.
Jebel Ali “is in advanced discussions with a group of financial institutions in relation to a financing package,” the company said in a statement to Nasdaq Dubai. “The use of proceeds will be solely for the redemption of the certificates ahead of the scheduled redemption date.”
Investors have been concerned about Jebel Ali Free Zone’s ability to repay the sukuk. The state-owned company plans to seek a US$900m syndicated loan, sell US$500m of Islamic bonds, raise at least US$200m from the sale of its UK-based Gazeley unit and pay the remaining with its own cash, a banker familiar with the plan said March 28.
“The trustee is proposing the introduction of a call option to provide JAFZ with enhanced flexibility to implement the new financing in a timely and efficient manner and to allow the timing of the dissolution of the underlying trust to be coordinated with the new financing,” the company said.
Jebel Ali Free Zone plans to repay the sukuk at par and will redeem all the certificates, it said. A meeting of sukuk holders will be held in London on May 24 and investors must turn in their voting instructions by 4pm London time on May 22.
The floating-rate Islamic notes were trading at 97.16 fils to the dirham at 4:22pm. Dubai, according to data compiled by Bloomberg. The securities have gained 4.9 percent this year.
