Abu Dhabi's Aabar Investments enters $800m loan agreement

23 May 2010

Loan to be used for general corporate purposes

Abu Dhabi’s Aabar Investments has entered into a AED2.9bn ($800m) loan agreement with a number of international and local lenders.

The loan has a three year term and will be used for general corporate purposes, according to a statement posted by the firm on the Abu Dhabi Securities Exchange (ADX) on 23 May.

National Bank of Abu Dhabi (NBAD) is the lead arranger of the loan according to a banker involved in the transaction, reported Reuters.

Analysts speculate that the loan could be used to refinance debt that is maturing in the near future. Aabar has a AED5.968bn loan from banks maturing this month, while its total borrowings, all term loans, stood at AED15bn at the end of 2009.   

Aabar recorded a surge in net profit in the first quarter of this year to AED1.58bn driven by gains from derivatives income and currency transactions.   

The company also revised its earnings for the first quarter of last year to a loss of AED1.045bn from a previously reported profit of AED177m, stating it had “identified errors in the classification of an investment, arising from the misinterpretation of fundamental facts.” (MEED 19:05:10)

In April this year Aabar cancelled a AED6.2bn takeover agreement for Dubai-based Arabtec.

In mid-May, Aaabar said it will sell AED1.5bn of convertible bonds to International Petroleum Investment Company (IPIC), at a price of AED2.50 per share. IPIC owns a 71 per cent share in Aabar.  

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