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Mon 18 Apr 2011 03:29 PM

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Dubai Group said to restructure $10bn of liabilities

The $10bn includes $6bn of bank debt and $4bn owed to other investors, sources say

Dubai Group said to restructure $10bn of liabilities
Dubai Group, an investment company owned by the emirate’s ruler, is restructuring $10bn of liabilities, up from an original estimate of $6bn, two people with knowledge of the discussions said (Getty Images)
Dubai Group said to restructure $10bn of liabilities
Dubai, Dubai skyline, Burj Khalifa
Dubai Group said to restructure $10bn of liabilities

Dubai
Group, an investment company owned by the emirate’s ruler, is restructuring $10bn
of liabilities, up from an original estimate of $6bn, two people with knowledge
of the discussions said.

The
$10bn includes $6bn of bank debt and $4bn owed to other investors, according to
the people, who declined to be identified because the information is private.
Discussions are at an early stage and an agreement is several months away, one
of the people said.

A
spokesman for Dubai Group declined to comment.

Dubai
Group, controlled by Dubai Holding, is one of several companies in the emirate
seeking to restructure loans after property prices and asset values slumped and
credit markets froze. Dubai World, one of the emirate’s three main state-owned
holding companies, reached a deal in March with about 80 banks to delay
payments on $25bn of debt.

Dubai
Group appointed eight banks to represent creditors in two committees in January
to help speed up agreement on the debt restructuring. Paris-based Natixis SA’s
Nexgen unit and Dubai-based Mashreqbank make up the committee of secured
lenders, whose loans are backed by assets. Royal Bank of Scotland Group and
Emirates NBD, the UAE’s biggest bank, lead the group of partially secured and
unsecured lenders.

Dubai
Group invests in the financial-services industry and owns real-estate assets in
the US, according to its website. It holds stakes in firms including Shuaa
Capital, the UAE’s largest investment bank, and EFG-Hermes Holding, Egypt’s
biggest publicly traded investment bank.

Banks
are prepared to accept an extension of loan maturities of up to seven years to
allow the price of Dubai Group’s assets to recover from the credit crisis, one
of the people, a banker, said. The maturity extensions will allow the banks to
avoid losses, the banker said.

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