ENBD secures $75m financing for RE fund

Dubai-based Emirates NBD real estate investment trust (ENBD REIT) has agreed a three-year $75 million Islamic financing scheme with Standard Chartered.

According to the fund, which is listed on Nasdaq Dubai, $40 million will be used to repay existing debt while as much as $30 million of the remainder may be used to finance acquisitions.

In a statement to Nasdaq Dubai, the fund also disclosed that there is the option of increasing the financing to $100 million.

The arrangement, known as Murabaha or cost plus financing, follows what has been a difficult year for the real estate fund.

Its share price has fallen by 35% in the year to date reducing its market capitalisation to $163.5 million. Meanwhile the fund’s net asset value fell by 3.7% for the first six months of the year, as decline it has attributed to the soft market conditions of the local real estate market.

In addition to the financing arrangement, a meeting has also been convened for November 27 to propose cutting the fund’s share capital from $288 to $203.5 million by cancelling $84.5 million worth of shares and using the money to create a distributable reserve.

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