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ICD reveals crucial numbers in bond prospectus

dubai landscape|By TAP Staff|The Investment Corporation of Dubai (ICD), owner of many of Dubai’s corporate jewels, such as the Emirates airline and the airport duty-free business, said its revenues grew 18 percent to $24.8 billion in the second half of 2013.

The numbers were revealed in the prospectus released in connection with the plan to raise about $750m in its first Islamic bond issue.

The latest full-year revenue figure for 2012 stood at $43.8 billion, the equivalent of around half of Dubai’s gross domestic product that year.

However, ICD’s net profits fell 4.7 per cent to $2.2 billion in the second half of last year, dragged down by higher oil prices and financing costs. The holding company, which is run by Mohammed al-Shaibani, controls assets of $160 billion.

Bankers said ICD, which also owns stakes in several UAE-based banks, is raising the money to give the Dubai government greater financial leeway to help the Dubai World conglomerate meet its first repayment of $4.5 billion to creditors in 2015.

Dubai World, which controls ports operator DP World, one of the world’s largest, has been through painful restriction after running into difficulties during the financial crisis.

In another sign of ICD’s crucial role in the emirate’s finances, in December it bought the landmark Atlantis hotel, on the city’s Palm Island, from Dubai World’s investment arm.

The prospectus also showed that ICD continued to support other Dubai entities, boosting its shareholding in Borse Dubai to 90 per cent from 79 per cent after paying off a loan of a related entity. Borse Dubai, the holding company of Dubai’s two stock exch­anges, owns a 20.6 per cent stake in the London Stock Exchange.

ICD acted as “lender of last resort” during the financial crisis, when Dubai staved off a near sovereign default with the help of more than $20bn in loans from Abu Dhabi, its oil-rich neighbour.

The emirate, while still saddled with debts of more than $120bn, has persuaded international partners such as the International Monetary Fund that growth can sustain such high debt ­levels.

Dubai’s government is eyeing another round of state spending ahead of the 2020 hosting of the World Expo, exploring options to finance infrastructure expansion. One of these is to develop and lease properties surrounding the city’s metro to finance further extensions to the 75km network.

The push to raise new finance coincides with a revival in Dubai’s tourism and trade driven economy. This has boosted its stock market and sparked a new property boom.

The prospectus also showed that the government “from time to time” intervenes in ICD’s operations to achieve “strategic objectives”.