Dubai property fund Emirates REIT already claims majority support for $400m Sukuk conversion

Emirates REIT
Emirates REIT’s assets include the Index Tower in DIFC, Trident Grand Mall, the 3 Loft Offices buildings. Winning the majority approval from bondholders will be a big win for the fund’s manager. Image Credit: Gulf News Archive

Dubai: After a tough few days of intense negotiations, the Dubai real estate fund Emirates REIT might have got enough investors to side with it on a change of status for its $400 million bond offering from 2017.

The fund manager of Emirates REIT, Equitativa, has set 3pm on June 7 as the deadline for the investors to agree to its Consent Solicitation Memorandum.

This was for a plan to convert the current Sukuk certificates – from the $400 million debt offering – with new ones that would mature in a further two years. Emirates REIT had maintained the profit rate on the new issue. An ‘ad hoc’ grouping of investors had earlier this week said they are opposed to such a move, saying they wanted more clarity on the fund manager’s operations and the reasons for the plan to issue new certificates.

But in a statement issued on Thursday afternoon, Emirates REI said that “Close to 60 per cent of the Sukuk holders cast their vote before the early document review fee deadline with more than 75 per cent of those votes in favour of the consent solicitation presented by the company.”

What’s the proposal?

The company proposed to maintain the “existing profit rate” for the new secured sukuk (the earlier one was unsecured). “The company believes that the enhanced security will lead to the Sukuk trading on more favourable terms,” it said in a statement. “Since the launch of the CSM, the Sukuk has traded up 11 per cent to 69 points (as of 27 May 2021) vs 62 points (as of 17 May 2021). We are pleased to see the CSM proposal has been a catalyst for the improved trading price for the benefit of our Sukuk holders.”