confirms final deal on $10 billion debt restructuring
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[January 24, 2014]
DUBAI (Reuters) — Financial services
conglomerate Dubai Group has reached a final deal with creditors on
restructuring $10 billion of debt, resolving the last major hangover
from the emirate's financial crisis, its parent company confirmed on
Lenders agreed to restructure about $6 billion of bank facilities
while a further $4 billion of debt will be repaid after bank
creditors are satisfied, Dubai Holding <DUBAH.UL>, the investment
vehicle of Dubai's ruler, said in a statement.
The statement confirmed a January 16 Reuters report, which quoted
banking sources as saying the deal had been done.
Lenders to Dubai Group agreed to extend maturity dates to the end of
2016 for secured facilities and to the end of 2024 for partially
secured and unsecured facilities. This is intended to buy time for
Dubai Group's assets to recover in value so that some can be sold to
meet its obligations.
Dubai Group was one of a number of Dubai state-linked entities which
borrowed heavily from banks to fund an acquisitions spree during the
boom years of 2006-8.
But as credit markets dried up following the global financial crisis
and a crash of Dubai's real estate market, they found themselves
unable to manage their obligations and were forced to renegotiate
tens of billions of dollars of debt.
Dubai Group's deal concluded more than three years of negotiations
over its debt pile. Its lenders include big Western banks such as
France's Natixis <CNAT.PA> and top Gulf institutions such as Dubai's
Emirates NBD <ENBD.DU>.
A number of creditors sought a remedy through the courts — a rare
occurrence in the Gulf — which resulted in some, including Royal
Bank of Scotland <RBS.L> and Commerzbank <CBKG.DE>, accepting 18.5
cents on the dollar to exit the restructuring process.
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Over the past year, Dubai's real estate market has recovered
dramatically and its economy has boomed, increasing the chances for
the restructuring plan to proceed smoothly in coming years.
Dubai Holding also announced on Thursday the appointment of a new
board of directors for Dubai Group. Ahmed Al Qassim, formerly
director of investment banking at Emirates NBD Capital, was
appointed chief executive and board member; Aidan Birkett, Michael
McLoughlin and Abdullah Sharafi were made independent non-executive
(Reporting by Andrew Torchia; editing by
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