Dubai Holding Unit Pushes for Bigger Debt Deal - Wall Street Journal

By MIRNA SLEIMAN

DUBAI?Dubai International Capital, or DIC, the investment arm of Dubai Holding, the conglomerate owned by Dubai's ruler, is seeking to restructure as much as $2.6 billion worth of debt by Nov. 30, twice as much as the amount that matures next week, people familiar with the situation said.

The push for the larger amount comes after the emirate reached a deal with creditors in October for about $25 billion of outstanding debt owed by the government's other flagship conglomerate, Dubai World. Dubai World shocked investors a year ago Thursday when it announced that it would delay debt payments.

The Dubai World deal has buoyed sentiment in the city-state, one of seven semi-autonomous emirates that make up the United Arab Emirates. Dubai's oil-rich neighbor, Abu Dhabi, the capital of the U.A.E., has provided billions of dollars of aid to Dubai amid its property-market bubble, reinforcing among investors a sense of underlying government support for Dubai and its corporate entities.

But analysts have continued to voice worry over still-high payment obligations looming over the government and some of its related corporate entities, including Dubai Holding. Dubai Holding, owned by Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum, has interests ranging from real estate to hospitality.

DIC in May had asked local and international lenders for a three-month extension on some of its $1.25 billion in loans that would allow it to implement a "consensual longer term plan." That extension was later expanded until Nov. 30.

Now the company is attempting to restructure $2.6 billion worth of debt as part of a larger debt restructuring under way at its parent Dubai Holding. Total debt at Dubai Holding that could be restructured is estimated at as much as $12 billion, another person familiar with the situation said.

"A deal between DIC and lenders to restructure $2.6 billion has to be reached before the end of this month," a person close to the matter told Zawya Dow Jones. A $1.25 billion loan for DIC matured in June and repayment was extended until Nov. 30. The remainder of the $2.6 billion in debts matures next year, but a deal that covers the entire amount has to be negotiated by the end of this month under the terms of the June extension.

DIC hasn't missed any payments on the remaining amount and is paying interest on the debt, a company spokesman said.

Dubai's total direct borrowing stood at $28.9 billion at the end of July, according to a Dubai Department of Finance investor presentation. But if the debt of its government-affiliated companies is added in, total debt eclipses the city-state's gross domestic product.

Another Dubai Holding company, Dubai Group, said earlier this month it had established a coordinating committee of banks to discuss its debt obligations. Separately, Dubai Holding's real-estate and hospitality arm, Dubai Holding Commercial Operations Group, or DHCOG, has a $555 million revolving credit facility due on Nov. 30.

Write to Mirna Sleiman at mirna.sleiman@dowjones.com

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