Posted inBanking & Finance

Dubai Group said to repay $300m to creditors

Sources say investment firm could reach agreement with other creditors as early as next week

Dubai Group is a unit of Dubai Holding, the investment arm of the ruler Sheikh Mohammed bin Rashid al-Maktoum
Dubai Group is a unit of Dubai Holding, the investment arm of the ruler Sheikh Mohammed bin Rashid al-Maktoum

Dubai Group, the investment company that has been seeking payment relief on loans for the past three years, has reportedly repaid a $300 million syndicated facility led by Citigroup Inc.

Two people with knowledge of the matter told Bloomberg that some of the lenders will exit talks on Dubai Group’s $6 billion debt pile.

The repayment follows Dubai Group’s sale of Dubai First to Abu Dhabi-based First Gulf Bank PJSC six months ago.

Bloomberg reported that final documentation for a deal between Dubai Group and its remaining creditors is being prepared and could be signed as early as next week.

A spokeswoman for Dubai Group declined to comment, as did a spokesman for Citigroup, Bloomberg added.

A unit of Dubai Holding, the investment arm of the ruler Sheikh Mohammed bin Rashid al-Maktoum, Dubai Group has been in talks with bank creditors for nearly three years, since the global credit crunch savaged its portfolio of assets.

Dubai boomed in the early part of the last decade as a banking and business centre, building the world’s tallest skyscraper, an indoor ski slope in the desert and other symbols of conspicuous wealth.

But the global credit crisis halved the emirate’s real estate prices, forcing state-linked companies such as Dubai Group to restructure tens of billions of dollars in debt. In 2009, the emirate needed $20 billion of emergency loans from neighbouring Abu Dhabi to avoid defaulting on its debt.

Dubai Group owes about $6 billion to banks, mostly from the Gulf and Egypt, including Dubai’s own Emirates NBD and Mashreq, it has previously been reported.

Follow us on

For all the latest business news from the UAE and Gulf countries, follow us on Twitter and LinkedIn, like us on Facebook and subscribe to our YouTube page, which is updated daily.