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Potential for mezzanine financing huge.

Dubai The Gulf region, with a large number of small and medium enterprises and family-owned businesses, has huge potential for mezzanine structures in financing, according to experts at a Standard Chartered workshop.

Mezzanine financing is capital investment that bridges the gap between debt and equity. It is a hybrid instrument with both a debt component and an equity component.

"It makes a lot of sense for companies in the region to consider mezzanine financing as an alternative and innovative financing option: it is ideal for family businesses that need capital but want to avoid equity investments and the dilution of their shareholding," said Taimoor Labib, regional head of Private Equity in the Mena region for Standard Chartered.

"It also makes sense for companies that are relatively highly leveraged and/or that want to restructure their balance sheet. Companies that have good cash flows are ideal candidates for mezzanine financing, even if they do not have a big asset base."

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Publication:Gulf News (United Arab Emirates)
Date:Oct 31, 2011
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