Diplomatic crisis sinks refinancing deal

THE REFINANCING of a $1 billion (R13bn) loan by Doha Festival City, a retail and hospitality complex in Qatar, has been indefinitely postponed as a diplomatic crisis deters regional banks from doing new Qatari business, bankers said.

The refinancing, co-ordinated by Doha-based investment bank QInvest, was marketed earlier this year to both Qatari and regional banks, including institutions in the United Arab Emirates.

It was to have been larger in size than the original loan – perhaps around $1.2bn, bankers said.

But Saudi Arabia, the UAE, Egypt and Bahrain cut diplomatic and transport ties with Qatar on June 5, accusing it of supporting terrorism, and the proposed deal has been put on hold, the sources said. Two Qatari bankers involved in the deal said that the diplomatic crisis was the main reason for the deal being postponed, as it had reduced banks’ appetite for the transaction.