DIFC Investments' (DIFCI) sukuk obligation has been highlighted by analysts as one of the most challenging refinancings in the Gulf Arab region this year, given the size of the maturity and the firm's limited cash position.  

The firm is "committed" to the repayment of its $1.25 billion Islamic bond, or sukuk, Chairman Abdulla Mohammed Saleh said in a statement to Nasdaq Dubai. 

"The Group is in final discussions with banks and management is confident that signed agreements are imminent, to finalize the bank financing of the sukuk," the company's financial statements said.  

The 0.849 percent sukuk maturing on June 13 was last bid at just over 98 levels, to yield about 18.2 percent. The price is slightly shy of 98.290 levels hit on Monday.

"There is an element of execution risk involved here which continues to hold the name from trading at tighter spreads," said Ahmad Alanani, senior executive officer at Exotix Limited.  

"A deeper discount may be warranted in the coming weeks if there is no further clarity on the sukuk refinancing. That said, when all is said and done I expect the Dubai government to step in and plug any gap or funding shortfalls, although the precise mechanisms of such support is not clear." 

The company swung to a profit in 2011, and sold Despec International, an IT distribution firm during the year.  

DIFC Investments made a net profit of $130.5 million last year compared to a net loss of $272 million in the previous year, after the impact of discontinued operations.  

Profit from continuing operations totaled $185.4 million compared to a loss of $286 million in 2010.   

Rental income increased last year by 1.8 percent over 2010 and total rental income generated from investment properties was $128 million. 

During 2011, DIFC Investments sold Despec International, an IT distribution firm, for $27 million, with payment to be received in three installments by Dec. 31 2013. The company received an amount of $15 million in 2011, in line with the installment plan, it said.