MAF eyes sukuk, expansion

Dubai's Majid Al Futtaim Holding, sole franchisee of hypermarket chain Carrefour in the Gulf, is to set up a sukuk programme as market volatility continues to thwart its plans for a conventional issue, an executive told reporters today.

MAF completed roadshows for an offering from its $2 billion medium term notes programme in June but chose not to issue a bond because of unfavourable market conditions.

"The next building block is to add a sukuk programme, the sukuk market is more stable," Daniele Vecchi, senior vice president, group treasury, at MAF, said on the sidelines of an Islamic finance conference.
"We will start working on it fairly soon," he added.

Vecchi also confirmed the company still planned to tap the conventional market when conditions permitted.

"We are ready if the market is ready. Right now the liquidity position of the company is strong and there's no pressure to issue bonds. Markets are still volatile."

MAF raised a $1 billion loan in July to help repay debt and provide the company with additional funds after its bond issue was abandoned.

MAF is planning to expand its Carrefour franchise to Iraq and Lebanon in the next year, taking the total number of MENA states in which it operates to 13.

"We are planning Carrefour openings in northern Iraq this year and Lebanon next year," Vecchi said.

However, MAF's development activity in Syria and Egypt had been curtailed by the political unrest in the two countries this year.

"The country is recovering but not fully recovered," Vecchi said of Egypt. "Business is quite strong and we are assessing our options."

In a supplement to its MTN programme, filed on 29 September with the London Stock Exchange, MAF said that it had slowed down the pace of investment in both countries during 2011.

"The progress of these projects will be determined on the basis of political developments as well as on the basis of the projects' ability to meet the Group's own risk management policy and investment criteria," it said. 

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