Borse Dubai earns $672m in NASDAQ share sales

Transactions ease market operator's debt as funds from divestment plus new loan facility allow payment on obligation due in February

Shares in NASDAQ OMX rallied to their highest price since March last year after the deal was finalised on Thursday.

Borse Dubai, the company controlling Dubai's two stock exchanges, has sold more than half of its stake in NASDAQ OMX, giving itself breathing room over its debt.

The sale by Borse Dubai of NASDAQ OMX shares in two transactions raised a total of US$672 million (Dh2.46 billion), and the company also announced a new three-year loan facility for $428m arranged by Nomura and Emirates NBD. The total amount raised was $1.1bn.

The funds were used by Borse Dubai to make a partial repayment of a $2.45bn term loan facility that was due in February and extended by three years the term of the remainder owed.

Mohammed al Shaibani, the chief executive of the Investment Corporation of Dubai, the government holding company that controls Borse Dubai, said: "We are very pleased to have completed this refinancing and to have partially de-leveraged and partially extended the term of Borse Dubai's facility for a further three years."

The sale of 22.78 million shares back to NASDAQ OMX raised $497m, and $175m was raised from the sale of 8 million NASDAQ OMX shares to the Japanese investment bank Nomura Holdings, Borse Dubai said.

Nomura will in turn sell those shares to Investor AB, the listed investment vehicle for Sweden's Wallenberg family, subject to regulatory approval. The transaction will raise Investor AB's stake to 9.7 per cent from 4.6 per cent, but Borse Dubai will remain NASDAQ OMX's largest shareholder, with a 15 per cent stake.

Analysts welcomed the debt repayment plan. Mohammed Ali Yasin, the chief investment officer at CAPM Investment, said: "What is important is that Dubai Borse needed to refinance the loan. It's a well-designed financial transaction and achieves the goals by lowering leverage, giving them a longer period to repay loan, plus they continue to be a majority shareholder."

NASDAQ OMX, owner of the US's second-largest equity exchange, will pay $21.82 per share and plans to raise $370m in the bond market to finance the transaction. The purchase is part of a lengthy share buyback effort.

Shares in NASDAQ OMX rallied to their highest price since March last year after the deal was finalised on Thursday. Bob Greifeld, chief executive of NASDAQ OMX Group, called the deal "an excellent transaction for both parties".

Borse Dubai received its stake in NASDAQ OMX in 2008 in a swap deal after battling with the New York company for control of the Swedish exchange operator OMX AB. Borse Dubai agreed to give NASDAQ control of OMX, while it got a stake in both bourses and a holding in the London Stock Exchange, in which it has about a 20 per cent stake.

NASDAQ OMX operates bourses in Stockholm, Helsinki, Copenhagen, Reykjavik, Tallinn, Riga and Vilnius.

Borse Dubai operates the emirate's two exchanges: the dollar-denominated NASDAQ Dubai and the more-active Dubai Financial Market, where stocks are listed in UAE dirhams. The company was set up in 2007 to accelerate the UAE's drive to become a leading financial centre between Europe and the Far East.