Reuters/Dubai
Dubai-owned port operator DP World is in talks with lenders to triple the size of an existing $1bn loan, as well as extend the lifespan and cut the interest rate, seeking to take advantage of investors’ renewed confidence in the emirate.
The firm, part of state-owned conglomerate Dubai World, is aiming to raise the loan to $3bn, four banking sources said, speaking on condition of anonymity as the information isn’t public.
The original five-year revolving credit facility was signed in April 2012 and has already been renegotiated once, adding a year to the lifespan in June 2013.
“We undertake a regular annual review of our banking facilities as part of active financial management,” a spokesperson for DP World said when contacted by Reuters.
Discussions on the length of the new loan and the revised interest rate were ongoing, the sources said.
The existing margin on the loan is 225 basis points over the London interbank offered rate (Libor), according to Thomson Reuters data.
Lenders who funded the original loan include Barclays, Citigroup, Deutsche Bank and HSBC, the data showed.
Negotiating with banks to cut the margin on an existing loan has been a tactic employed by a number of Dubai state-linked firms in recent months.
