Gems Education, the biggest school operator in Dubai, obtained a Dh2 billion loan to refinance investments and provide funds for expansion in the Middle East and North Africa.
The six-year facility with Islamic and conventional parts was arranged by Abu Dhabi Islamic Bank, Mashreqbank, Dubai Islamic Bank, and Noor Islamic Bank, the privately owned company said. United Arab Bank participated in the facility.
Gems Education's fundraising comes as a rebound in Middle East economic growth prompts companies to return to the debt market after the global financial crisis cut access. Companies in the Middle East and North Africa have raised US$26 billion via syndicated loans and bonds so far this year compared with $18bn in the same period in 2011, according to data compiled by Bloomberg.
"Recently we announced our intention to build 10 new schools in the UAE over the next two years to meet growing demand," Gems Education's chief operating officer Dino Varkey said in the statement. "This new bank facility supports this expansion plan."
Gems Education has seized upon growing demand for private education since 1980, when Dino's father and current Gems chairman, Sunny Varkey, took over the business his parents established in 1959 and started opening new schools. At the time, Gems operated one school with 300 students.
Now it employs 11,000 people and offers a variety of curricula – including American, British, Indian and International Baccalaureate – charging fees ranging from $750 a year to $40,000 a year to serve different income segments. Gems Education makes about $500 million in revenue a year, Mr Varkey said last month.
* Bloomberg News
