DUBAI: Dubai Holding’s main unit will delay repayment on a $555 million loan until Nov. 30, the company said on Tuesday, the second time it has failed to meet a repayment deadline.
DHCOG, a unit of the conglomerate owned by the Gulf Arab emirate’s ruler, took a big hit on its exposure to Dubai’s property crash.
The company said in June it may resort to asset sales to deal with its debt after posting a $6.2 billion loss for 2009. Its assets include Jumeirah hotel group and business parks.
DHCOG was due to repay the $555 million loan on Tuesday, having already extended it for two months in July. Market participants had expected the move.
"The restructuring and rescheduling of debt is still in progress," Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments said.
Concerns about the overall debt burden of Dubai’s state-linked companies mounted after Dubai announced a standstill on repaying $26 billion in debt as it restructured conglomerate Dubai World. It unveiled a $9.5 billion rescue plan for the firm in March.
The $555 million revolving credit is the drawn part of a $1 billion loan that was agreed in 2007 via bookrunners BNP Paribas, Citi, RBS and Standard Chartered.
Dubai Holding, one of the emirate’s three state-owned firms along with troubled conglomerate Dubai World and Investment Corporation of Dubai, has debt obligations estimated at $14.8 billion out of a total $109 billion owed by the government of Dubai and its related entities.
Additional reporting by Nicolas Parasie