Dubai Investments said it plans to launch a Dh1 billion (US$272.26 million) debt issue this year to pay down bank debt and plans for a number of acquisitions.
The company, which owns stakes in more than 40 other companies, will begin appointing financial advisers in the next three weeks, said Khalid bin Kalban, the chief executive at Dubai Investments.
The Islamic bond, which will be in the name of Dubai Investments Park, will roadshow during the next three months amid hopes to close subscriptions by the end of April.
About Dh600m will be used to pay down financial instalments, after the company paid Dh200m in interest last year.
“We will have liquidity,” Mr bin Kalban said. “It will reduce our cost of borrowing.” Dubai Investments last year exited three companies, which included Al Arif Contracting and Anchor Allied Factory, that have generated returns worth Dh200m.
It plans to exit two companies this year, one of which is already in the valuation process that could bring returns of Dh500m to Dh550m for the company. The deals, expected to be finalised in the next two months, could triple Dubai Investments’ bottom line to Dh800m to Dh900m this year. The company is also making “six studies” over potential acquisitions.
Dubai Investments, which once considered the public listing of Masharie, one of its businesses, said a series of regulatory changes along with the capital market environment have been unfavourable for exits through initial public offerings.
“There’s a lot of complications with the markets, with new rules and regulations,” Mr Kalban said. “They keep changing. So we said let’s really put an end. Either IPO, or exit through a trade sale. We did the latter.”
Mr Kalban, who is also the chairman of Union Properties, said a window of opportunity now lies for property developers to get liquidity amid a tightening of bank lending to property developers in the emirate. “There are many projects planned in the pipeline, but the main question is: where is the money going to come from?”