Dar Al-Arkan confident of repaying $1bn sukuk

Saudi builder Dar Al-Arkan  is able to repay a $1 billion Islamic bond due this year and will not seek government aid, a top executive said, rejecting allegations that the company may struggle to pay its debts. Dar, the kingdom\'s largest property developer, will use cash on hand and proceeds from land sales to repay the bond, or sukuk, maturing in July, chief financial officer Andy Raheja, told Reuters in an interview on Monday. It is also in talks with lenders to refinance a smaller 700 million Saudi riyal ($190 million) loan facility with an asset-backed Islamic facility using its Al Qasr Mall in Riyadh as collateral.     Last week a website questioned Dar\'s ability to repay upcoming debt, including the sukuk. The website \"Dar Al Arkan Crisis\" published documents alleging corporate malpractice, regulatory breaches and fraud. Raheja dismissed all the allegations. \"We do not need to rely on any external help from the government or from our equity investors to achieve our sukuk repayment neither are we seeking it,\" he said at the company headquarters in Riyadh. Raheja said Dar will repay the sukuk with 2.5 billion riyals in cash and the rest coming from land sales. He said the funds would be raised over the next four months. Dar sold 1 million sq m of land in the fourth quarter, earning 800 million riyals. \"We expect to sell similar levels in the first two quarters (of 2012), which will be adequate to support the sukuk repayment,\" Raheja said. The developer has about 35 million sq m of land and could offload more in the future if needed. \"Our land bank can be liquidated at very short notice to achieve any liquidity objectives we have, but naturally we don\'t want to sell everything or anything before it is mature,\" he said. Dar said on Monday that a sample of its real estate portfolio was revalued at a 53 percent premium to its book value of 9.7 billion riyals ($2.59 billion) by third-party firms hired by the developer. This sample of assets is now valued at 14.8 billion riyals. Shares of the firm ended unchanged on Tuesday. The stock plunged last week after the website accused the company of financial misconduct but has gained 9.8 percent since the start of this week on Saturday. In October, the Public Investment Fund (PIF) approved a 4 billion riyal facility to finance one of Dar\'s biggest projects, the Qasr Khozam development in Jeddah, estimated to cost 12 billion riyals. Raheja said the company is in talks with banks to secure another 2 billion riyals for the project. \"We would like to believe that within the course of two to three quarters, we should be able to gather up the remaining funds to finance the full land acquisition program,\" he said.