Ezdan Holding Group is planning to raise $2bn sukuk to finance “mega projects” in the real estate sector as part of its strategy in investment diversification, chief executive officer Ali al-Obaidli has said.
Ezdan received the green light during its ordinary and extraordinary general assembly, which approved the issuance of Shariah-complaint bonds worth $2bn, and endorsed the board’s recommendation to distribute 5% cash dividends to shareholders at the rate of Dh50 per share.
“This is a new venture for Ezdan because usually we get funding from the banks but this time we are going to international markets to raise $2bn for our development projects.
We have now received the approval from the board and we plan to raise the funds in stages. The first stage will involve $500mn, which we plan to raise by May or June this year,” al-Obaidli told Gulf Times on the sidelines of the meeting.
He added: “The use of the remaining funds will depend on our spending. Maybe by the end of 2016 we may use part of it and the rest will depend on the progress of our projects. The $500mn will be used to finance Ezdan’s current real estate development projects.”
Ezdan’s chairman Sheikh Dr Khalid bin Thani bin Abdullah al-Thani said the board was satisfied with the solid financial position of the group, which, he said, has witnessed “tremendous growth in the pace of our record profitability.”
“We are working to develop a realistic new investment operation to emphasise our presence in the various investment sectors, using several mechanisms, including the issuance of Islamic Shariah-complaint bonds worth $2bn.
“Such vision came after we have meticulous study and our participation in a number of local and international conferences dealing with Islamic finance industry in the contemporary world. In addition to all that, we are been keen to focus on using the best Islamic financing practices, including Islamic bond,” Sheikh Dr Khalid said.
Sheikh Dr Khalid also pointed out that investing in sukuk “would minimise risk rates and raise cash flow within the group.”
According to al-Obaidli, one of the mega projects under construction involves 8,500 villas and apartments, 700 shops, one hypermarket, and two schools at Al Wukair City.
“The first stage of the project will be completed by end of December 2016 or by January 2017, first phase is almost 25% complete.
“Our model is the same and our land is around 1.6mn square metres of different sizes and in various locations in Qatar, and we plan finish the construction of all residential projects by 2020,” he explained.
Asked about the progress of the construction of new malls in Al Wakrah and Al Wukair, al-Obaidli said both projects are expected to open this year, including a hotel in front of Four Seasons Hotel in West Bay.
He also said there is a huge demand from commercial entities, whose services will cater to the almost 150,000 residents from both areas.
Sheikh Dr Khalid also said Ezdan “will remain committed to its promises” towards the community in the allocation of a permanent fund to support the charitable work out of its profits, through the endowment of up to 22.8% of the group shares by Sheikh Thani bin Abdullah al-Thani. “Such initiative is regarding the first of its kind in Qatar,” he stressed.
Sheikh Dr Khalid (left) and al-Obaidli: Keen to focus on using the best Islamic financing practices. PICTURE: Nasser TK
