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PADICO to sell $70 million of bonds in March

2011-02-17

RAMALLAH, West Bank, Feb 16 (Reuters) - Palestine Development and Investment Inc plans to sell $70 million of five-year bonds in March, its chief executive said on Wednesday. Chief Executive Samir Hulileh told Reuters that the bonds, which will pay interest of 4.5 to 5 percent, are aimed at financing long term investments and cut higher banks interest loan costs. "It helps in financing long term investments. Commercial loans do not help in building projects for six or seven years," Hulileh said at the sidelines of a news conference in Ramallah to announce 2010 financial results. Net profit of PADICO -- the biggest privately owned company in the Palestinian territories -- slipped one percent in 2010 to $38.1 million from $41.9 million in 2009, a year in which it recorded $21.8 million non-recurring profit, Hulileh said. PADICO has interests in everything from poultry farming to five-star hotels and has planned investments including a five-star hotel in the Hamas-run Gaza Strip, a power plant in the West Bank, and a multi-million tourism centre in the Jordan valley. Last year, the Western-backed Palestinian Authority said it plans to issue its first government bonds this spring, denominated in U.S. dollar. The aid-dependent Palestinian Authority"s economy is forecast to grow 7 percent in 2011 after an 8 percent pace last year. In the West Bank, improved law and order and an easing of movement restrictions imposed by Israel during the Palestinian uprising, or Intifada, that broke out in 2000 are among factors economists say have helped to fuel growth. The economy of the Gaza Strip, by contrast, has suffered under the weight of a tight blockade imposed by Israel since the Hamas Islamist group seized control of the territory in 2007.