Gems Education plans to raise about US$500 million from a debut sale of perpetual Islamic bonds as the world's biggest privately owned operator of schools seeks to fund expansion.
Morgan Stanley, Abu Dhabi Islamic Bank and Credit Suisse will help the Dubai-based Gems manage the sale of the bonds without a maturity date, said the chief financial officer Nicholas Guest.
The company will begin meetings with fixed-income investors this week, he said.
Gems is raising money as part of a plan to build 21 schools, including in the United States and the United Kingdom, over the next three years and boost capacity at 10 existing institutions, said the chief operating officer Dino Varkey earlier this year.
Some 130,000 students attend the company’s network of 100 schools in 11 countries.
The planned sukuk is “off the back of very strong underlying education demand in the UAE” and the Arabian Gulf and part of Gems’ long-term investment plan, Mr Guest said. “In the current market conditions there is good demand in the property and real estate sector for education assets,” he said.
Other Dubai-based companies have sold perpetual bonds this year. Majid Al Futtaim Holding, the operator of Carrefour stores in the Middle East, last week raised $500m from such a sale. The securities were priced to yield 7.125 per cent and received more than $4 billion in orders, according to data compiled by Bloomberg.
Gems repaid a loan to Abraaj Capital, the Middle East’s biggest private equity company, this month, Mr Guest said.
