Dubai World unit seeks $1.25b loan for Gazeley

Dubai World's ports and free zones unit hired Citigroup Inc and Deutsche Bank AG to arrange loans for $1.25 billion to pay for its acquisition of UK warehouse development company Gazeley from Wal-Mart Stores.

Ports & Free Zones World plans to start meetings with other potential lenders in Dubai and London this week to get a three-year loan, said a banker with direct knowledge of the deal, who asked not to be identified as the transaction is private.

The loan will pay 1.5 percentage points to two percentage points more than the London interbank offered rate, the banker said.

Dubai World, which manages more than $100 billion of assets for the emirate's government, on June 10 said it agreed to buy Leeds-based Gazeley from Wal-Mart to gain a business that develops warehouses for companies including Procter & Gamble and DHL.

The company's presence in the UK, Europe and China complements the Dubai group's operations in the Middle East and India, Ports & Free Zones CEO Jamal Majid bin Thaniah said at the time.

Dubai World Group Chief Financial Officer Maryam Sharaf couldn't be reached at her Dubai office yesterday.