Dubai duty free to raise $1.1bn

Airport retailer Dubai Duty Free has mandated banks for a $1.1 billion (Dh4 billion) multi-tranche loan facility to help fund the expansion of Dubai's international airport, the company said in a statement on Monday. Citibank along with Dubai Islamic, HSBC and Emirates NBD have been hired to arrange and coordinate the debut international transaction, the company said in an emailed statement. DDF, which is owned by Investment Corporation of Dubai, said the facility includes Islamic and conventional tranches. Dubai was looking to raise at least $500 million by selling debt based on future revenues at DDF, sources told Reuters last month. "The purpose of the facilities is to optimise DDF's capital structure in order to support the further development at Dubai International Airport," DDF said in the statement. Dubai’s existing airport serves over 50 million passengers a year as the emirate attempts to leverage its position at the crossroads of air corridors between continents. DDF said the syndication was launched on April 5 and banks have been invited to commit in US dollars and UAE dirhams. Presentations would be held in Dubai during the week. Sales at Dubai Duty Free, which covers a sprawling 18,000 square metres of retail space at Dubai International Airport, rose 15.7 per cent to $1.46 billion in 2011. The operator, which sponsors high-profile sports events such as the Dubai tennis championship and is famous for lavish giveaways, has seen business boom on the back of sales of branded perfumes, watches and designer clothes. Duty Free is expected to add an additional 8,000 square metres by the end of 2012.