Dubai Parks and Resorts closes $1.5bn financing

11 November 2014

Deal forms debt portion of funding to support new theme parks

Dubai Parks & Resorts, a subsidiary of Meraas Holding, has secured an AED4.2bn ($1.15bn) debt financing with a group of international and local banks to partly fund its planned new theme parks.

The loan was secured just ahead of Meraas’ announcement on 11 November that it was set to launch an initial public offering (IPO) of Dubai Parks and Resorts. The IPO is aiming to raise AED2.5bn ($680m), representing 40 per cent of the company’s post-offer issued share capital.  

The debt financing is fully underwritten by US’ Goldman Sachs, Abu Dhabi Commercial Bank, Commercial Bank International, Emirates NBD and Noor Bank. The financing will be launched into general syndication to international and regional banks at a later date following the completion of the IPO.

The debt financing coupled with the IPO proceeds and cash contributions and expenditure funded by Meraas Holdings before the end of August this year, is expected to be sufficient to cover the project costs, according to Meraas.

The debt and equity funding combined totals AED10.54bn. Approximately AED8.7bn of this total covers construction costs.

In the event of unforeseen circumstances, Meraas Holding and Meraas Leisure & Entertainment have also guaranteed the construction risk of the project to the lenders on the debt facility.

They have also agreed to provide interest-free shareholder loans if certain project milestones are not met to enable the completion of the project.

Dubai Parks & Resorts are developing three theme parks in Dubai, based on different concepts. One will be called Motiongate, and will be themed around Hollywood films. The second park will be the Middle East’s first Legoland. The final park will have a Bollywood theme.

The company is also building a four-star hotel and a retail, dining and entertainment district to be called Riverpark.

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