Jebel Ali Free Zone has repaid a Dh2 billion Islamic loan four and a half years ahead of schedule.
The repayment of the loan that was set to mature in June 2020 comes amid efforts by Dubai government entities to reduce debt loads and as the emirate’s biggest free zone starts to show signs of sustained growth.
“This is perhaps the most significant milestone in the history of JAFZ,” said Sultan Ahmed bin Sulayem, the chairman of Economic Zones World, the holding company that controls JAFZ.
“Early repayment manifests the true commitment of the shareholder and government of Dubai to reduce the debt of overall Dubai World Group. The continued successful operational performance of the free zone enabled it to generate enough cash to clear its debt much ahead of the maturity date.”
The Islamic facility that was paid back was arranged in 2012 to help refinance a sukuk issued in 2007 that was maturing. The free zone company said after paying off the loan, it now owed foreign creditors US$650 million.
The announcement comes amid good times for the zone. JAFZ said in March that it added more than 650 new customers in 2014, helping to lift profit by more than 50 per cent to Dh1.06bn.
Lower finance costs, higher occupancy and a one-off gain from Dubai World helped to drive profit higher.
JAFZ has benefited from its location alongside Jebel Ali Port and the growth of air cargo passing through the nearby Dubai World Central.
The city’s improving logistics capacity is stoking demand for new warehouse space, while rising consumption in the city is also supporting the sector.
mkassem@thenational.ae
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