A day after it bought the remaining stake it did not already own in Carrefour in the region for more than €500 million (Dh2.36 billion), one of the UAE’s leading retail groups is reportedly planning a bond sale.
Majid Al Futtaim Holding will hold investor meetings in the United Arab Emirates, Asia and Europe from Sunday and a sale of dollar-denominated, perpetual securities may follow subject to market conditions, according to three people familiar with the plans who asked not to be identified because the information is private.
Meanwhile, National Bank of Abu Dhabi began the sale of US$350 million of convertible bonds. The country's largest lender, which has the option to increase the offer by as much as $35m, will sell the senior unsecured bonds due 2018 that will be convertible into ordinary shares, it said yesterday.
The offering may be raised by a further $35m if the bookrunners choose to invest. The sale will help diversify its funding sources and investor base and proceeds will be used for general corporate purposes.
NBAD’s bonds will be issued at par and are likely to carry a coupon of between 1 per cent and 1.5 per cent a year payable semi-annually in arrears, it said. The initial conversion price is expected to be set at premium of 30 per cent above the volume-weighted average of NBAD shares between the launch and the pricing.
Majid Al Futtaim (MAF), rated the second-lowest investment grade by Standard & Poor’s at BBB, last sold bonds in June last year when it raised $500m from the sale of seven-year notes.
The company, which plans to expand into countries including Lebanon and Egypt, said on Wednesday that it bought Carrefour’s 25 per cent minority stake in MAF Hypermarkets for €530m.
MAF also expects to complete talks for the acquisition of its Metro supermarket chain with Egypt’s Mansour Group in a “few weeks”, the MAF Group treasurer Daniele Vecchi said this month.
MAF revenue rose 10 per cent to Dh21.6bn last year as it opened seven Carrefour stores and a shopping mall.
Established in 1992, MAF operates 50 hypermarkets and 44 supermarkets under the Carrefour brand in the Middle East, North Africa and Central Asia.
It operates 18 of the French hypermarkets in the UAE, including one at Dubai’s Mall of the Emirates, which had 20 million visitors in the first half of last year.
Standard & Poor's Ratings Services said yesterday that it had assigned its BB+ issue rating to the proposed debt issuance.
Debt sales from the GCC region soared to a record $42.8bn last year, almost 90 per cent of total Middle East and North Africa offerings, according to data compiled by Bloomberg.
* with Bloomberg News