“These discussions are making good progress and Dubai Group
is confident of a positive outcome that is beneficial to all stakeholders.”
Dubai Group has a $1.5 billion murabaha facility due in
August 2011 in which 24 banks have participated. The arrangers included Al
Hilal Bank, First Gulf Bank, Noor Islamic Bank, Al Khaliji Commercial, Royal
Bank of Scotland, and Standard Bank.
A banking source, speaking on condition of anonymity, said
the bulk of the exposure still lay with the top eight banks on the deal. “We
knew they were in difficulty, in significant financial trouble,” the source
said.
Another source said Al Hilal, National Bank of Abu Dhabi,
Noor Islamic, and RBS, were among the creditor coordinating committee.
Dubai Group, which focuses on banking, insurance and
investments, has stakes in Dubai-based investment bank Shuaa Capital, Greek
group Marfin Investment Group, and Australian company Citigold Corp.
Dubai Group’s announcement came on the heels of a raft of
restructuring in the Gulf Arab emirate after a property collapse combined with
the global downturn
Flagship conglomerate Dubai World reached a $25 billion
restructuring deal with creditors in September.
The state-linked firm shocked global markets last November
when saying it was unable to meet almost $25 billion in debt obligations. Dubai
World’s Nakheel property unit narrowly avoided default on an Islamic bond last
year after a last-minute cash injection from neighboring emirate Abu Dhabi.
“For the last year, everybody has been in the dark and
struggling to figure out what is going on,” a Dubai-based banker said. “It is
useful to know that steps are being taken to address debt issues because it
gives a little more comfort to the market.”
Dubai Holding’s other units, including Dubai International
Capital (DIC) and Dubai Holding Commercial Operations Group (DHCOG) raised
concerns with investors earlier this year when they sought delays for credit
obligations.
DHCOG, Dubai Holding’s main unit, delayed repayment on a
$555 million loan until Nov. 30 while DIC also requested a repayment extension
on a $1.25 billion loan.
