Dubai Duty Free secures $1.75bn loan for expansion

10 July 2012 (Last Updated July 10th, 2012 02:00)

Airport retailer Dubai Duty Free has secured $1.75bn loan facility, which will be used to fund the expansion of its international airport.

Airport retailer Dubai Duty Free has secured $1.75bn loan facility, which will be used to fund the expansion of its international airport.

The company annouced that the six-year senior, unsecured syndicated credit facility will encompass a conventional term loan facility and Islamic facilities.

In a move to fund the expansion of emirate's airport, the company had earlier mandated banks for a $1.1bn financing facility.

However, the amount of the loan has gradually increased following high interest from local and international lenders.

Dubai Duty Free said that financing was oversubscribed with support from a syndicate of 26 international, regional and local banks.

Initially, the interest rate for the deal was 25 basis points lower than the original proposed, but specific terms of pricing were not made available.

Dubai Duty Free has reported a rise in its H1 2012 sales by 11% to AED2.81bn ($761.18m), compared to the same period in fiscal 2011.

The group's perfumes business posted a strong growth with a sales rise of 16% to AED420m ($114.3m) year to date, while the sales of Confectionery was AED224m ($61m), up 18%, compared to H1 2011.

The sales of Electronics electronics and cosmetics increased by 13% and 18% respectively.

Dubai Duty Free executive vice chairman Colm McLoughlin said that the company is expecting the similar performance in the second half.

"Plans are very much in place for the opening of Concourse 3 in early 2013 and we are busy working towards the final fit-out of the new retail area and ensuring our recruitment plans are in line with our expanded retail area which will reach 26,000 square metres with the opening of Concourse 3," McLoughlin said.