Bloomberg News

Du Obtains Loan to Part-Finance $817 Million Debt Repayment

June 07, 2011

(Adds today’s share price in last paragraph.)

June 7 (Bloomberg) -- Du, the second-biggest phone company in the United Arab Emirates, obtained a three-year loan to finance part of 3 billion dirhams ($817 million) of debt due this month.

The $220 million club loan facility will pay annual interest of 1.45 percent over Libor, the company also known as Emirates Integrated Telecommunications Co. said in a statement to the Dubai bourse today. “The remaining balance of the existing facility will be settled using the company’s existing resources,” according to the statement.

Du, which competes with Emirates Telecommunications Corp., had a cash balance of 2.9 billion dirhams at the end of March, according to the company’s financial statement posted on Bloomberg. The Dubai-based company will use part of its cash reserves to repay the debt, it said in an e-mailed response to questions today.

Du plans to spend as much as 1.7 billion dirhams this year on infrastructure, Chief Executive Officer Osman Sultan said April 25. The company’s first-quarter profit more than doubled to 205.8 million dirhams as the number of mobile and fixed-line subscribers grew. The net income was after the company set aside 50 percent of profit as royalty payment to the government.

The lead arrangers for the club loan were National Bank of Abu Dhabi PJSC, Emirates NBD PJSC and Samba Financial Group. Mashreq Bank PSC was the co-arranger.

Du shares have gained 10 percent this year. They fell 0.3 percent to 3.15 dirhams in Dubai trading, giving the company a market value of 14.4 billion dirhams.

--Editors: Shaji Mathew, Claudia Maedler

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story:


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