Dubai’s Majid Al Futtaim (MAF), the operators of Carrefour stores in the Middle East which is buying out the French company’s 25 per cent stake in their joint venture, is raising an extra $500 million through a revolving credit facility, a source familiar with the deal said on Tuesday.
The mall operator, which delayed plans in June to raise at least $500 million from what would have been the Gulf’s first hybrid bond from a corporate borrower, will use the $1.5 billion facility to replace revolving loans totalling $1 billion.
The current borrowings are made up of a revolving loan expiring in 2014 and a term loan expiring in 2016, said the source, who asked not to be identified as the matter is not public.
The new loan would be priced at around 200 basis points (bps) above the London interbank offered rate (Libor), the source said.
The existing debt is priced at 250 bps and 275 bps above Libor on the three and five-year portions respectively, according to Thomson Reuters data.
MAF declined to comment.
MAF, sole franchisee of Carrefour hypermarkets in the Middle East, said in May that it was buying out Carrefour’s 25 per cent stake in the joint venture for $680 million.
The hybrid bond was expected to help pay for the purchase.
The unlisted firm is keen to expand its operations and is said to be in talks to buy Egypt’s largest supermarket chain from family-owned Mansour Group.