DUBAI – Dubai’s Emirates Airline said Thursday it raised $1.13 billion to finance new A380 aircraft as the sheikdom struggles to restructure part of its corporate debt with banks.
“Emirates remains in a secure financial position despite the global financial crisis,” Tim Clark, the airline’s president, said in an emailed statement. “We have never encountered difficulties in obtaining finance for our aircraft acquisition program, with both international and regional banks comfortable with our financial stability.”
Citigroup Inc. and Doric Asset Finance helped arrange the funding for six new A380 superjumbos, which form part of the airline’s 53 plane order from European Aeronautic Defence & Space Co.’s Airbus unit.
The airline continues to load up on debt while Dubai’s government, its owner, struggles to deal with more than $80 billion worth of public and corporate borrowing. The sheikdom has asked banks to freeze $26 billion in debt for one of its biggest conglomerates, Dubai World.
Emirates currently operates a fleet of 139 aircraft and order-book stands at 156 aircraft, with a total value of about $50 billion. It’s the largest customer for the giant Airbus A380 passenger plane.
According to Standard & Poor’s Ratings Services, the company before Thursday’s announcement had 10 loans and bonds maturing by 2013 valued at almost $1.7 billion.
The airline is part of Investment Corporation of Dubai, a giant government-owned holding company set up to house the sheikdom’s best assets.
A downturn in global tourism has so far failed to hit the company’s profits. Emirates said last month that first-half earnings almost tripled to 752 million U.A.E. dirhams ($205 million). The airline is a key customer of Boeing Co. and Airbus. It has orders valued at about $34.8 billion with the European manufacturer.