Sorouh to raise $136m loan

25 August 2010

Deal will be in addition to $640m raised earlier in the year

Abu Dhabi’s Sorouh Real Estate is planning to approach banks for an additional AED500m ($136m) in new loans before the end of August.

The deal is intended to bring a AED2.35bn loan raised in July up to around AED3bn.

That deal was arranged in July by UAE-based bookrunners Abu Dhabi Commercial Bank (ADCB), First Gulf Bank, National Bank of Abu Dhabi (NBAD) and Noor Islamic Bank (NIB). Those banks will also be managing the syndication of the additional AED500m.

The syndication will be launched before the end of August, with banks expected to be asked to submit financing offers by the end of September. The final size of the deal may be increased depending on market appetite.

Sorouh said in July that it had secured the four-year loan from a group of local banks. The loan was secured on a portion of the firms’ land bank, including Shams Gate on Reem Island.

Proceeds from the deal will be used to repay existing debt and fund the development of projects in the emirate.

The loan will be a test of how much interest banks have in investing in Abu Dhabi real estate companies, given that property prices in the emirate have under pressure.

Sorouh said in July that profit for the second quarter of the year fell by 87 per cent, to AED20m, with the majority of its income coming from rental properties as a result of a slowdown in land sales.

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