Dubai construction firm UNEC plans to raise Dhs1bn loan

Dubai-based United Engineering Construction (UNEC) plans to raise around Dhs1bn ($272m) in debt to finance its building work on a major shopping mall project, banking sources familiar with the matter said.

The company is building the Deira Mall in Dubai for United Arab Emirates property developer Nakheel, a project which is to involve total investment of Dhs6.1bn.

UNEC is raising the money through a loan arranged by Emirates NBD, said the sources, who spoke on condition of anonymity because the information is private.

Reuters made repeated calls to UNEC asking for comment and was eventually referred to a UNEC manager, who said the information was confidential and declined to confirm or deny it. A spokeswoman for ENBD, contacted by email and telephone, declined to comment.

The UAE’s loan market has been slowed by low oil prices and weaker economic growth, and the UNEC loan could help to stimulate activity in the market, affecting prices and liquidity conditions.

Nakheel awarded a Dhs4.2bn construction contract to UNEC last April. Construction was due to start in the third quarter of this year with completion expected in 2020, Nakheel said at the time.

The project is located on a 4 million square foot site on Deira Islands, a waterfront area being developed by Nakheel. When complete, it is to be home to over 250,000 people and add 40 kms to Dubai’s coastline.

UNEC is headquartered in Dubai and has branches in the UAE and Saudi Arabia. It builds projects including office buildings, industrial buildings, villas, hospitals and schools.