Abu Dhabi’s TDIC Secures Financing To Repay $2bn Bonds In 2014

Abu Dhabi’s Tourism Development & Investment Co (TDIC), which reported on Monday that its losses had narrowed in 2013, has secured full financing to repay $2 billion in maturing bonds this year, the state-owned firm said.

TDIC, which is building iconic museums such as the Louvre and Guggenheim in Abu Dhabi, has a $1 billion conventional bond repayable on July 2 and a $1 billion sukuk (Islamic bond) due for payment in October.

“We have completed 100 per cent of our refinancing activities to ensure there is no risk to TDIC or our shareholders in regards to maturing debt,” TDIC said in a statement to Reuters.

The refinancing has allowed TDIC to extend the duration of its debt considerably while capitalising on financing rates that are near historic lows, it added without giving details.

Many United Arab Emirates firms are refinancing debt to take advantage of a low interest rate environment and an improvement in UAE business confidence since the global credit crisis.

TDIC has secured a loan from a local bank to repay the bond maturing in July, the company’s financial report for 2013 said.

The report also said it was in the process of finalising two separate financing agreements in 2014 “aiming to have all documents in execution form in order to comfortably close before the maturity dates of the $1 billion sukuk”. It did not provide details of the banks or the terms.

TDIC has begun negotiations to sell some of its assets at an agreed price of Dhs1.24 billion ($338 million), its report said. The assets include a five-star hotel, residential apartments, villas and a retail district as well as a beach plot on Abu Dhabi’s Saadiyat Island.

It took a Dhs658.4 million write-down on the five-star hotel, residential apartments and villas that was booked in 2013.

On Monday TDIC reported a net loss of Dhs1.13 billion for 2013 compared to a loss of Dhs2.15 billion in the previous year.

Depreciation, impairments and amortisation in 2013 totalled Dhs1.18 billion, against Dhs1.49 billion in 2012, it said. Its revenue for 2013 increased to Dhs3.58 billion from Dhs1.27 billion.

Development work-in-progress totalled Dhs3.67 billion, the statement said, while TDIC’s total assets grew to Dhs43.4 billion from Dhs41.4 billion.