DDF in $1.1b loan deal to fund expansion

Dubai Duty Free, or DDF, said on Monday that it was making its maiden foray into the global financing market to raise $1.1 billion to support the ongoing Dh28 billion expansions at Dubai International Airport. DDF said it has mandated a number of institutions to broker the loan made up of Islamic and conventional finance. The institutions that will arrange and coordinate its debut international transaction include Citibank, Dubai Islamic Bank, Emirates NBD and HSBC. Abu Dhabi Commercial Bank has pre-committed as a mandated lead arranger and bookrunner. In a statement, DDF, the world’s leading airport retailer, said the financing drive was to optimise its capital structure in order “to support the further development at Dubai International Airport.” DDF, a division of the Investment Corporation of Dubai, is the exclusive operator of duty free shops and seller of goods exempt from duty at the airports in Dubai. The syndication was launched on April 5 with banks invited to commit in US dollars and/or UAE dirhams. DDF is hosting a management presentation in Dubai during the week. DDF, the sole duty free operator at the departure and arrival areas of all terminals at Dubai International Airport, or DIA, which is the fourth busiest airport globally in terms of international traffic, has grown to become the largest single airport travel retailer in the world, accounting for five per cent of airport shop sales and 3.2 per cent of the wider duty free and retail global business (which includes airports, airlines, ferries, border shops and other outlets) in 2010. For 2011, DDF generated revenues of Dh5.3 billion. DDF, as part of its expansion, will add a further 8,200 square metres of retail space in the new Concourse 3 at Dubai International Airport, which is forecasting passenger traffic in 2012 of 56.5 million, far ahead of the 51 million recorded in 2011. Currently, DDF operates across 18,000 square meters of retail space and sells to around 47 per cent of all DIA passengers and on average, handles 61,400 transactions per day. In the first quarter of 2012, DDF posted 14 per cent surge in sales to Dh1.42 billion, signalling a positive year ahead for the retailer, which is on track to achieve a full year sales target of Dh6 billion. “We have had a very good start to the year and are very much on track for our sales forecast of Dh6 billion. Terminal 3 continues to be the biggest in terms of accumulative sales and accounts for almost 58 per cent of our total turnover. However, the average spend of passengers in Terminal 1, which accounts for 35 per cent of sales, is higher,” Colm McLoughlin, executive vice-chairman of Dubai Duty Free, had said in a statement.