Company owned by Dubai ruler confirms redundancies as part of cost review process
Dubai Group, part of the ruler of Dubai's personal empire, has cut half its staff of about 30 people as part of cost-cutting measures in its $10 billion restructuring, three sources told Reuters on Monday.
Among those to leave the firm is Chief Investment Officer Trevor Regan, who joined the company in December 2011, one of the sources said, speaking on condition of anonymity as the information is not public.
"We can confirm that a number of staff have been made redundant as part of the constant cost review process, this will not impact the management of our investment portfolio," a Dubai Group spokesman said in an emailed statement.
Most of the cuts are in back office roles such as IT and are part of a plan to reduce costs at the firm to make it more attractive to lenders considering a restructuring proposal.
"The company has been very aggressively paring back costs to a bare minimum," a second source aware of the move said.
"There were always going to be some changes to make the company more efficient going forward," a third source added.
Dubai Group, part of Dubai Holding, the investment firm owned by Sheikh Mohammed bin Rashid al-Maktoum, was hit hard by the global financial crisis in 2008 due to excessive use of leverage in its investments and a sharp decline in asset values.
It has been in negotiations with creditor banks, which are owed $6 billion of the total, since missing interest payments on two loan facilities in 2010. The remaining $4 billion is owed to shareholders and classified as internal lending.
Dubai Group wants time for asset values to recover before making sales in order to pay back its debts and has proposed extending maturities for between 3.5 and 12 years.
However, three international banks began unprecedented legal action in September to secure repayment of debts after running out of patience with the negotiations.