The Dubai Metals & Commodities Centre (DMCC) has announced an innovative, gold related, Islamic financing with an intended principal amount of at least US$200mn. DMCC has appointed Dubai Islamic Bank (DIB) as mandated lead arranger and joint lead manager, and Standard Bank as joint lead manager to create the sharia-compliant financing, a first for the region.
The proceeds will be used to fund the development of market infrastructure for the DMCC free zone, which caters to commodity-related businesses in Dubai. The planned infrastructure includes construction of three towers.
Istithmar, an investment holding company based in the UAE that coordinates the appraisal and implementation of entrepreneurial ventures and investment proposals, has played an advisory role in the development of DMCC’s gold financing.
The tenor of the DMCC financing is intended to be three-to-five years and has an anticipated financial close by the end of April 2005, subject to market conditions. It is intended that applications will be made for listings on the appropriate exchanges in Dubai and overseas.
Explaining the benefits of the financing, Colin Griffith, executive director of the gold and precious metals sector for DMCC states: