Dubai’s Jebel Ali Free Zone (Jafza) has proposed a refinancing plan for a AED7.5bn ($2bn) sukuk (Islamic bond) maturing in November.

According to sources present at a meeting between Jafza and bankers held in Dubai earlier this week, the company proposed to reduce the debt level by AED700m, while also raising a new bank loan expected to be about AED4bn and a new sukuk of about AED2.4bn.

The new financing is expected to be put in place by July, with the loan raised first, in order to make sure that the new funds are in place before Ramadan when activity in the region typically slows down. Commenting on the situation, one banker who was present at the meeting, says: “Jafza doesn’t want to get to the summer before having this in place.”

Jafza’s sukuk, maturing in November, is one of two debts at Dubai government-owned companies that has been identified by ratings agency Moody’s as potentially requiring state support. The second is DIFC Investments, the investment arm of the Dubai International Financial Centre, which has a $1.25bn sukuk maturing in June.

The US’ Citigroup, the UK’s Standard Chartered, and the local Dubai Islamic Bank (DIB) are all expected to play significant roles in the new financing. “Jafza presented the deal as something it is arranging itself, but Citigroup, Standard Chartered and DIB will be heavily involved,” says another banker at the meeting last week. DIB was one of the arranger of the company’s existing sukuk.

So far the refinancing plan has been presented to a small group of less than 10 banks, but Jafza is expected to approach a wider group of potential lenders in the coming weeks.

“The company is exploring all options for the November sukuk refinancing and anything further at this stage is only speculation,” says Jafza, which operates an industrial free zone in the south of Dubai.

The company has been holding talks with banks about refinancing the November sukuk since late last year.