The Jebel Ali Free Zone Authority is preparing to request bondholder consent in a move that could result in an early repayment of Dh7.5bn (US$2.04 billion) in sukuk, allowing it to negotiate a debt deadline that had been viewed as challenging.
The port operator, known as Jafza, must repay the Islamic bonds in November this year. The company is in the advanced stage of talks with banks over the refinancing of this debt. In an exchange filing, Jafza said it was seeking to introduce a call option to repay the debts six months ahead of schedule, providing itself "with enhanced flexibility to implement the new financing in a timely and efficient manner" and to ensure coordination with the banks providing new financing.
It plans to use this financing solely for the repayment of its upcoming debts. The company, fully owned by Dubai World, generated net income of Dh241.6 million last year, an increase of 72.9 per cent compared with the previous year, it announced on Monday.
Jafza has hired Citigroup, Standard Chartered and Dubai Islamic Bank as solicitation agents for the deal. Alongside Dubai Holding Commercial Operations Group (DHCOG) and DIFC Investments, Jafza's ability to repay its debts had been closely watched by investors worried about the financial health of Dubai's government-related holding companies.
DHCOG repaid a $500m bond due in February this year.
On Tuesday, DIFC Investments said it was in talks to refinance its $1.25bn sukuk, due for repayment in June.
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