UAE’s GEMS Education seeking $500m loan – sources

GEMS Education, a Dubai-headquartered international education company, is raising $500m through a loan facility, banking sources familiar with the transaction said on Sunday.

The loan will be used partly to refinance existing US dollar-denominated debt, as well as to back payments which the company needs to make in the currency, added one of the bankers, who spoke on condition of anonymity.

GEMS was not immediately available for comment.

The loan has a lifespan of three years but will have a clause allowing it to be extended twice for a further one-year period. It was unclear if this extension was at the discretion of the borrower or the banks.

Emirates NBD has a leading role in the transaction, bankers said, with the first banker adding a European bank will co-lead the deal.

The loan is likely to be initially funded by the leading banks, and could potentially be sold down to other lenders at a later stage, the same banking source noted.

The deal is likely to reach completion by the end of the year.

GEMS raised a $250m three-year loan earlier this year and completed an additional loan of Dhs3bn ($817m) in 2015. That loan had a seven-year maturity and was provided by local banks, as reported by Reuters.

GEMS Education offers private education services in 14 countries, according to its website. In 2014, a consortium of Dubai-based Fajr Capital, Bahraini state investment fund Mumtalakat and private equity giant Blackstone bought a stake in its emerging markets business.