Dubai Holding refinanced a 30 billion dirham ($8.2 billion) loan to replace older facilities at the two state-backed developers it absorbed last month, better positioning itself to capitalize on a boom in the city’s real estate market.
The funding will refinance debt held by the firms — Nakheel and Meydan — according to people familiar with the matter, who asked not to be identified because the information is private. The deal helped secure more favorable terms for the debt, with Emirates NBD Bank PJSC and Mashreqbank PSC underwriting the loan, they said.
Nakheel is best known as the developer of Dubai’s artificial palm-shaped islands, while Meydan owns one of the world’s most opulent horse racecourses. The companies were merged and brought under Dubai Holding — an investment firm owned by the emirate’s ruler — to better take advantage of the strength in the real estate market.
The recent moves, orchestrated by Dubai Holding Chief Executive Officer Amit Kaushal, could potentially be a precursor to an eventual listing of some of the conglomerate’s units over the next few years, according to two of the people. Kaushal, who took over as CEO in 2018 after stints at global banks including Goldman Sachs Group Inc. and UBS Group AG, is looking to cut costs at the combined entity and streamline operations, the people said.
A representative for Dubai Holding didn’t immediately respond to comment.
The deal in March created a real estate behemoth with a large land bank and assets worth billions of dollars — better equipped to cope with fluctuations in a property market known for its boom and bust cycles.
Nakheel and Meydan’s parent company is among the top shareholders in Dubai’s biggest listed property firm, and has been able to capitalize on the surge in demand for homes via a joint venture with Abu Dhabi’s largest developer.
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