UAE’s GEMS Education seeking $500 million loan: banking sources

 13 Nov 2016 - 17:37

UAE’s GEMS Education seeking $500 million loan: banking sources
Mr Sunny Varkey of GEMS Education (Courtesy: gemseducation.com)

By Davide Barbuscia and Tom Arnold / Reuters

DUBAI: GEMS Education, a Dubai-headquartered international education company, is raising $500 million through a loan facility, banking sources familiar with the transaction said on Sunday.

The loan will be used partly to refinance existing U.S.  dollar-denominated debt, as well as to back payments which the company needs to make in the currency, added one of the bankers, who spoke on condition of anonymity.

GEMS was not immediately available for comment.

The loan has a lifespan of three years but will have a clause allowing it to be extended twice for a further one-year period. It was unclear if this extension was at the discretion of the borrower or the banks.

Emirates NBD has a leading role in the transaction, bankers said, with the first banker adding a European bank will co-lead the deal.

The loan is likely to be initially funded by the leading banks, and could potentially be sold down to other lenders at a later stage, the same banking source noted.

The deal is likely to reach completion by the end of the year.

GEMS raised a $250 million three-year loan earlier this year and completed an additional loan of 3 billion dirham ($817 million) in 2015. That loan had a seven-year maturity and was provided by local banks, as reported by Reuters.

GEMS Education offers private education services in 14 countries, according to its website. In 2014, a consortium of Dubai-based Fajr Capital, Bahraini state investment fund Mumtalakat and private equity giant Blackstone bought a stake in its emerging markets business.

(Editing by Andrew Bolton)