DUBAI, Oct 3 (Reuters) – Dubai-based Emaar Properties, the largest Arab real estate company by market value, is seeking to raise $1 billion in a syndicated Islamic loan to finance projects, the company said on Tuesday.
Emaar is working on a series of major property developments across the Arab world and South Asia, including the Burj Dubai, which it says will be the world’s tallest building when it is completed in 2008.
The company is seeking a five-year loan to fund projects in the United Arab Emirates and abroad, Emaar said in a statement.
It has not previously borrowed for longer than three months.
“This is our first borrowing on a longer-term basis,” a senior company official, who asked not to be named, told Reuters. “Basically we don’t have any significant debt on our balance sheet and we plan to utilise that strength.”
Emaar is leading a consortium building a $26 billion dollar development Saudi Arabia’s Red Sea coast, the single biggest private investment in the kingdom, and last week announced it had secured a $43 billion dollar project in Pakistan.
The company did not name the banks arranging the loan that will comply with Islamic, or sharia law, which bans lending on interest.
“The banks are a mix of foreign and local banks,” the official said, without giving details.
Emaar said the loan would take the form of a Musharaka contract which is essentially a profit-sharing arrangement.