Dubai International Capital, the direct private equity investment arm of state-backed investment group Dubai Holding, has finally reached agreement with a host of lenders to restructure $2.5 billion of debt on its books.
Lenders, which include HSBC, RBS, Emirates NBD and Mashreq, have agreed to extend $2.15 billion of debt liabilities by five years, with a 2 percent cash interest coupon, it said in a statement.
Further loans amounting to $350 million have been extended by three years at an unchanged contractual rate of interest, DIC said.
The restructuring puts DIC on a sound financial footing
Ahmed Bin Byat, Dubai Holding
Ahmed Bin Byat, Dubai Holding’s chief executive, said: “This agreement is an important landmark for Dubai Holding. The successful restructuring is a result of the significant commitment demonstrated by all stakeholders and Dubai Holding acknowledges their role in achieving this agreement. The restructuring puts DIC on a sound financial footing.”
David Smoot, chief executive of DIC, added: “This will allow for the implementation of the management team’s long-term business plan to maximise the value of the portfolio for the benefit of all stakeholders. Although we are under no pressure to sell assets, we have been able to make a number of profitable exits in recent months demonstrating the quality of our investments and our ability to find buyers in current market conditions.
“Despite the challenging macroeconomic environment the portfolio is well-positioned to navigate current markets with less leverage, better liquidity and long-term financing, reflecting significant future value potential,” he added.
DIC has also decided to appoint a new board of directors following the restructuring. Fadel Al Ali, executive chairman of Dubai Holding Commercial Operations Group, will become chairman of DIC.
This debt restructuring represents another step in Dubai’s continued march in the right direction
Rick Pudner, Emirates NBD
In addition, Smoot has been proposed as a board member, along with three independent directors: Aidan Birkett, managing director in Deloitte’s corporate finance practice; former 3i Group Asia chairman Christopher Rowlands; and Abdullah Sharafi, president of Gerab National Enterprises and a former executive at Emirates Industrial Bank.
Rick Pudner, chief executive of lender Emirates NBD said: “This debt restructuring represents another step in Dubai’s continued march in the right direction. Strong fundamental economic growth story coupled with willingness and ability to address debt refinancing requirements in a timely and viable manner are strong differentiating factors for Dubai in the current global economic scenario driving investor confidence and positive sentiment around the Dubai story. This is clearly reflected in the recent tightening of Dubai CDS and we believe that it will give further traction to the growing positive momentum.”