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Capital Markets

Restructuring threat in Dubai

Dubai’s debt troubles show no sign of easing, with some investors believing that a restructuring of Dubai Holding, a private investment company for Sheikh Mohammed, is inevitable.

The conglomerate, whose business interests include hospitality, healthcare, energy, tourism, finance and real estate, is in the spotlight after one of its subsidiaries announced that it was delaying until September repayment of $1.25 billion of debt due last month. Dubai International Capital (DIC), an alternative investment fund, reached agreement with its bank creditors to the three-month delay. Some sources believe it will eventually be wound up because of poor performance. DIC’s assets include UK hotel chain Travelodge, which posted pre-tax losses of £102 million ($151.6 million) last year, and engineer Doncasters, which lost £125 million. DIC has debts of $2.9 billion, all through bank loans, and accounts for just over one-fifth of Dubai Holdings’ total obligations of $10.5 billion, according to bankers.

Heavy losses at DHCOG

The conglomerate’s main unit, Dubai Holding Commercial Operations Group (DHCOG), is also under pressure after it announced losses of $6.2 billion for 2009. The company’s revenue fell to Dh9.5 billion ($2.6 billion) from Dh13.2 billion the previous year, while its assets shrank to Dh124.5

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