JAFZA To Repay $2bn Sukuk Early

Dubai’s Jebel Ali Free Zone (JAFZA) said on Sunday it had received the consent from a majority of Sukukholders for early redemption of a $2 billion-equivalent Islamic bond.

The state-linked industrial free zone, part of a unit owned by Dubai World, said a majority representing 89 percent of certificate holders had voted in favour of the Extraordinary Resolution in a meeting on May 24 in London.

“Accordingly the consent conditions have been satisfied and the Deed of Amendment has been executed,” the statement on Nasdaq Dubai said.

In order to change any terms of the certificates, the company was legally bound to seek approval from holders.

Citigroup Inc, Dubai Islamic Bank and Standard Chartered were appointed as solicitation agents.

The 3.01 per cent, Dhs7.5 billion Sukuk was originally due in November.

The company announced last month it was in advanced talks with financial institutions over a financing package to meet its debt obligation.

Along with a $1.25 billion Sukuk issued by another state-owned entity, DIFC Investments, due in June, the JAFZA redemption was considered crucial to assess the ability of Dubai Inc firms to meet their debt maturities.

In March, Reuters reported the company was preparing a three-pronged approach to the refinancing, consisting of a syndicated loan, another Sukuk issue, and partial cash repayment. Asset sales are also an option.