JAFZ Sukuk Holders Approve Early Redemption of $2 Billion

(Corrects to show Jebel Ali received approval for early repayment in first paragraph of story first published May 27.)

Jebel Ali Free Zone FZE, a business park operator in Dubai, received approval from holders of its 7.5 billion-dirhams ($2 billion) Islamic bonds to redeem the trust certificates ahead of their maturity in November.

The majority of sukuk investors who voted for the plan will be “entitled to receive the consent fee of 100 dirhams per 100,000 dirhams in principal amount of the certificates” on or about May 29, Jebel Ali said in a statement to Nasdaq Dubai today. The floating-rate notes that comply with Islam’s ban on paying interest are due in November.

The approval comes after Dubai Holding Commercial Operations Group LLC paid a $500 million bond that matured in February days ahead of schedule. State-run utility Dubai Electricity and Water Authority also said in March it paid 1.2 billion dirhams in borrowings on March 15, about eight months early, while Dubai International Capital LLC, the private equity unit owned by the Dubai’s ruler, reached a $2.5 billion restructuring agreement last month.

Dubai, home to the world’s tallest skyscraper, incurred $113 billion of debt seeking to transform itself into a tourism and commercial hub, with $15 billion maturing this year, according to International Monetary Fund estimates. State-owned companies won’t need state help to refinance debt in 2012, Mohammed Al Shaibani, director general of Dubai ruler’s court, said in February.

Jebel Ali reported a 73 percent surge in 2011 profit to 241.6 million dirhams as revenue rose. Its sukuk traded at 98.48 fils to the dirham on May 25, according to data compiled by Bloomberg.

DIFC Investments LLC, which owns properties in Dubai’s financial center, has almost completed raising a $1 billion loan to help repay a $1.25 billion sukuk due in June, three bankers familiar with the matter said last week.

To contact the reporters on this story: Shaji Mathew in Dubai at shajimathew@bloomberg.net; Dana El Baltaji in Dubai at delbaltaji@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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