You are not going to believe thisJuly 1, 2015 9:22
Dubai holding’s DIC agrees $2.4 bln debt restructuring
Co to repay $2 bln after 5 years, $400 mln after 3 years; Restructuring talks had been ongoing for over 1 year; Dubai Group, another Dubai Holding unit, still locked in talks
November 26, 2011 11:32 by Reuters
Dubai International Capital (DIC), a unit of Dubai Holding, the conglomerate owned by the emirate’s ruler, has reached an agreement with creditors for its $2.4 billion debt restructuring, the company said on Thursday.
“I can confirm that the DIC restructuring has been agreed,” a spokeswoman for DIC said, declining to give further details.
Two sources familiar with the situation said the company had agreed to repay $2 billion of the debt being restructured after 5 years at an interest rate of 2 percent. A further $400 million is to be repaid after three years, at current rates.
The sources declined to be identified.
Negotiations between DIC and banks have been ongoing for over a year, with earlier proposals including the option to sell assets.
In October, DIC sold hotel operator Ishraq Dubai to diversified firm Almulla Group, but the company did not disclose how much it made from the deal. Earlier in the year, it sold its 45-percent stake in valve maker KEF Holdings Inc for $178 million.
DIC’s existing assets include UK hotel chain Travelodge, Doncasters and European aluminium maker Almatis Holdings BV.
Dubai Holding’s other units, including Dubai Group and Dubai Holding Commercial Operations Group (DHCOG), are at various stages of addressing debt obligations.
DHCOG said in December it had converted a $555 million revolving credit facility into a five-year term loan, following three payment extensions to allow for negotiations with banks to take place.
Dubai Group, the conglomerate’s financial services arm, is still in talks with creditors to restructure about $10 billion in debt. The company has not paid interest on the debts for over a year.
The Gulf Arab emirate is working to rebuild its credibility among investors who fled after state-owned conglomerate Dubai World said in 2009 that it would restructure about $25 billion in debt.
The crisis left the tiny desert city state with grand ambitions coping with a burst property bubble and a debt pile estimated at over $100 billion at its state-owned companies. (Reporting by David French and Mirna Sleiman; Editing by Rachna Uppal and Reed Stevenson)