Sunday, January 26, 2014

Dubai Group Completes $6 Billion Debt Restructuring


Fri., January 24, 2014
Dubai Group LLC, an investment company owned by the emirate’s ruler, said it reached a final agreement with lenders on $6 billion in debt restructuring after three years of talks, Bloomberg News reported. Lenders agreed to extend the maturity for secured debt to December 2016, and for partially secured and unsecured loans to December 2024, Dubai Group said in an e-mailed statement today. A further $4 billion of “related party debt has been subordinated to the claims of the bank creditors,” it said. The company also announced management changes, with Ahmed Al Qassim appointed as chief executive officer, succeeding Fadel Al-Ali, who becomes chairman. The deal is a further milestone in Dubai’s recovery from the 2009 debt crisis, which roiled global markets. Several state-owned companies in the Persian Gulf tourism and business hub, including palm island developer Nakheel PJSC, were forced to delay repayments after credit markets froze. Dubai Group, which owns stakes in Oman’s biggest lender Bank Muscat SAOG and local investment bank Shuaa Capital PSC (SHUAA), agreed on the main terms with a group representing lenders last year. “It’s another step in Dubai ticking off the issues that lingered from the financial crisis,” Abdul Kadir Hussain, who oversees about $700 million as CEO at Mashreq Capital DIFC Ltd., said today by telephone. “This is yet more good news for Dubai’s credit.”

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