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Qatar's Barwa takes $175m refinancing loan

Barwa Real Estate Co. has taken out a sharia-compliant loan with International Bank of Qatar to refinance its existing debt

Barwa Real Estate Company has taken out a loan to refinance its debt.
Barwa Real Estate Company has taken out a loan to refinance its debt.

Qatari firm Barwa Real Estate Company, has raised $175m through an Islamic loan from International Bank of Qatar to refinance its existing debt.

Around 45% of Barwa Real estate’s shares are owned by Qatari Diar – the real estate developer owned by Qatar's sovereign wealth fund.

Barwa Real estate is listed on the Qatar Stock Exchange.

The sharia-compliant loan will last for seven years from the date that the company draws down on the facility, the firm said in a stock exchange filing.

In an effort to refinance its current debt obligations, Barwa Real Estate intends to increase the lifespan of the maturities on the best available terms, as part of its five-year business plan running between 2016 and 2020.

As Qatar’s largest listed developer, Barwa Real Estate reported more than doubling its fourth quarter net profit in March this year, as well as an improved dividend payout for the full year.

The road to profit has not been without challenges.

Back in November 2013, Barwa Real Estate Company signed a Memorandum of Understanding (MoU) with Qatari Diar, to sell it $5.49bn (QAR20bn) worth of assets.

The MoU formed part of Barwa's plans to restructure its finances in order to pay down its debt, after it reported a drop in net profit due to delays in finalising some deals, despie managing to cut general and operating costs by 9%.

In January 2014, Qatari Diar agreed to buy Barwa Real Estate’s 37.34% stake in Barwa Bank for $659m (QAR2.4bn).

In May the same year, the group also sold its Barwa City project, a planned affordable housing development to Labregah Real Estate Co for $2.08bn (QAR7.57bn). 

In June 2014 it sold its 95% stake in Barwa Commerical Avenue, a huge retail development near the Industrial Area, for $2.45bn (QAR9.02bn) to Labregah Real Estate Co, a wholly-owned subsidiary of the Qatari Diar Real Estate Investment Co.

Moreover, earlier that same month, Barwa Real Estate dropped plans to build its proposed $5.5bn Oryx Island, a pedestrian-centric tourist island off the Doha coastline that was due to contain a water park, villas and several hotels, including five floating hotels to house fans attending the FIFA World Cup 2022. 

It had also previously announced plans for a 250ha Gulf Resort in Abu Samra overlooking Salwa Bay containing three hotels, a shopping mall, a corniche waterfront area and a large marina, as well as a new residential scheme known as Dara covering 17.6ha of land at the new Lusail City project, overseen by Qatari Diar.

By October last year however, Barwa Real Estate had sold its plot of land in Lusail City to the government for $700m (QAR2.54bn), amid continued financial challenges owing to over-expansion.

January 2015 then saw Barwa Real Estate completing its purchase of the remaining 50% share of the Lusail Golf Development Company that it did not already own, for around $682m (QAR2.5bn).
 

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