UDC plans $400m convertible bond sale

The bond sale should be complete by the end of this year.

RELATED ARTICLES: Pearl Qatar can learn from Dubai's Palm Jumeirah | Barwa City enters deal with Qatari Diar Finance | Qatar leading GCC infrastructure spend to 2014

United Development Company is to sell around US$400 million of convertible bonds by the end of this year to fund its projects and new business lines, including facilities management, a senior finance executive revealed today.

Abdullah Araj, executive vice president of finance of the Qatari investment company, told Bloomberg that the money raising would fund its FM ventures, including that which is looking after Pearl Qatar, its mixed-use mega-project off the coast of the gas-rich state.

Convertible bonds allow the holder to 'convert' their debt into an equity stake in the issuer's company. It is less popular as a method of money raising that initial public offerings as it is a newer concept in the GCC, analysts say. The move is part of a wider move for real estate companies and the country at large to diversify its economy.

Story continues below

Advertisement

FEATURED COMMENT Might be of interest.   1 Comments Read more comments »

Last week, it was reported that Barwa Real Estate Company received the first US$3.5 billion tranche for one of its units as the first stage of a financing deal with Qatari Diar Finance, the money management arm of developer Qatari Diar.

UDC, which works over four main business sectors, posted a net operating profit of QR353.25 million for the first half of 2010. Pearl Qatar, as a work in progress, was valued at QR3.59 billion in the company’s last financial statement. The value of its assets that are considered work-in-progress increased from QR2.764 million to QR3.593 million.