Exclusive: Dubai Group signs $10 bln debt restructuring deal - sources

Thu Jan 16, 2014 7:43am EST
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By David French

DUBAI (Reuters) - Dubai Group has signed a $10 billion debt restructuring deal, two sources with knowledge of the matter told Reuters on Thursday, bringing an end to the last major hangover from the emirate's 2009 financial crisis.

Dubai state-linked entities borrowed heavily from banks to fund a spree of acquisitions during the boom years of 2006-08.

But as credit markets dried up following the global financial crisis and a local real estate bubble burst, they found themselves unable to manage their obligations and were forced to renegotiate tens of billions of dollars of debt.

Dubai Group, the investment vehicle owned by the emirate's ruler, signed the restructuring deal on Wednesday, the sources said, speaking on condition of anonymity as the information is not public.

Lenders to the unit of Dubai Holding DUBAH.UL, which include France's Natixis (CNAT.PA: Quote) and Dubai's Emirates NBD ENBD.DU, still have to sign and return the last piece of documentation and this should happen in the next few days, bringing a formal conclusion to the long-awaited deal, the sources added.

"It's not perfect but it's a major milestone for both the emirate and the banks who were exposed to the Dubai government-related entities," said one of the sources at a creditor bank.

Dubai Group declined to comment.

Dubai Group had been in negotiations with creditors since late 2010 after it missed payments on two debt facilities.   Continued...

The Emirates Towers, which house the headquarters of Dubai Group, are seen on Sheikh Zayed road in Dubai May 9, 2013.REUTERS/Ahmed Jadallah