Dubai Group lenders said to seek early exit option
Source: BI-ME with Bloomberg , Author: Posted by BI-ME staff
Posted: Mon July 30, 2012 5:20 pm

UAE. Dubai Group LLC's creditors are seeking an option to be repaid early as the investment company controlled by Dubai’s ruler reorganizes US$6 billion of bank debt, according to three people familiar with the talks.

Under the early exit proposal for the 10-year debt restructuring, banks can choose to be repaid the market value of their loans after five years, said two of the people, who asked not to be identified because the information is private.

Banks opting for the exit clause are also seeking a guarantee that Dubai Group will have the cash to repay in case it can’t raise funds by selling assets, some of which are considered indivisible, one of the people said. A Dubai Group spokeswoman, who asked not to be identified because of company policy, declined to comment.

Dubai Group, controlled by Dubai Holding LLC, is one of several companies in the emirate reorganizing debt after the global credit crisis eroded the value of its assets. Royal Bank of Scotland Group Plc (RBS), Commerzbank AG and Standard Bank Group Ltd. (SBK) abandoned 18 months of restructuring talks with the investment company after failing to reach an agreement, two people familiar with the matter said on July 10.

Dubai Group invests in financial services industry and owns property in the U.S., according to its website. It holds stakes in companies including Dubai-based investment bank Shuaa Capital PSC, Cairo-based investment bank EFG-Hermes Holding SAE and BankMuscat SAOG (BKMB) in Oman, the country’s biggest lender. 

Dubai Group appointed eight banks to represent creditors in 2011 to negotiate the terms on US$10 billion of liabilities, of which it owed $4 billion to shareholders.

Emirates NBD PJSC (EMIRATES), the United Arab Emirates’ biggest bank by assets, said July 23 it had set aside 32 percent of the value of Dubai Group’s loans, or 1.47 billion dirhams ($400 million), to cover for losses as a result of the debt restructuring.

In April, Dubai Group proposed paying interest of 1 percent to 2.5 percent in a $6 billion debt restructuring, three people familiar with the plan. Under the proposal, secured creditors would be repaid in three years, while partially secured and unsecured loans will mature in 12 years with additional interest paid at the end of the term, they said.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: February 11, 2016
INTERNATIONAL. "Although we anticipate some strain on Gulf banks' funding and liquidity this year, good asset quality and strong capitalization remain positive factors."
date:Posted: February 10, 2016
UAE. Low oil prices will constrain the amount of funding available to Gulf sovereigns and banks to support the region's substantial infrastructure bill in coming years; S&P projects a gap as large as $270 billion through 2019 between capital spending for projects and project contracts awarded.
date:Posted: February 10, 2016
UAE. Across the Middle East, educational institutions and providers face a myriad of challenges and opportunities; "Educational organizations are increasingly being asked to demonstrate their wider impact and contribution to goals around employability, social mobility and inclusion."
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