Al Jaber Group, an Abu Dhabi-based holding company with interests in construction, asked about 30 creditor banks to delay payments by one year on around AED6bn ($1.6bn) of debt, two bankers familiar with the situation said.
The group, which has AED16bn of projects in hand, hired KPMG as a financial adviser to help change the terms of its debt, said the two bankers, who declined to be identified because the discussions are private.
Property prices dropped by more than half in Dubai and by 30 percent in larger neighbour Abu Dhabi as banks tightened mortgage lending and speculators fled the market during the global financial crisis.
State-owned developer Nakheel, which spearheaded Dubai’s building boom, is seeking to change terms on more than $10bn of debt and contractor claims.
Al Jaber, which has assets of more than $5bn, said yesterday that it’s talking to banks to alter terms on its debt and that it expects to reach an agreement next year. The group “found it difficult to raise the appropriate finance to secure additional work and maintain its expansion in the region” because of the credit crisis, the company said in an emailed statement.
An Al Jaber spokeman, who declined to be identified because of company policy, wouldn’t comment on the specific terms when called and emailed on Monday.
The borrower, whose Al Jaber LEGT Engineering & Contracting (ALEC) unit worked on Dubai’s Mina A’Salam hotel and the Kempinski hotel in the city state’s Mall of the Emirates, has arranged at least $1.1bn of loans that come due by 2014.
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