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Dubai: Al Wa'ab City Management on Wednesday said it had concluded the initial closing of its capital raising exercise that fetched 4.75 billion Qatari riyals ($1.3 billion) of capital from debt, mezzanine and equity funding sources for the 11.5 billion riyals ($3.2 billion) Al Wa'ab City project.
This financing stands out because of the capital raised in such challenging times for the financial markets. The innovation stems from a unique mezzanine financing element that has been used in the Middle East for the first time.
The company has raised 3.6 billion riyals ($1 billion) in senior debt on a fully underwritten basis, which represents almost a third of the total value of the project. The remaining two-thirds are coming from a mixture of equity and mezzanine finance.
The debt has been arranged by a combination of international banks (HSBC); regional banks (Abu Dhabi Commercial Bank, Ahli United Bank and Mashreq); and local Qatari banks (Qatar National Bank, Al Khaliji Bank and Doha Bank). The mezzanine is being raised through an investment vehicle in which Amwal, Shuaa Capital, Kaupthing and Q-Invest are the sponsors and an initial closing of 730 million riyals ($200 million) has been achieved with other investors also participating. In addition 4.4 billion riyals ($1.2 billion) of equity has also been injected from the promoters Nasser Bin Khalid Holding and other investors.
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